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Speculation is not investment. The difference is that investments pay dividends, and buy and hold is a viable strategy. A speculator is relying on appreciation
by prodigal_erik 13y ago
Speculation is not investment. The difference is that investments pay dividends, and buy and hold is a viable strategy. A speculator is relying on appreciation to make flipping the asset pay off, and is screwed if they eventually need a greater fool and can't find one.
- twelvechairs 13y agoinvest. "1. To commit (money or capital) in order to gain a financial return". nothing about dividends or buy and hold here. your definition seems very narrow by comparison.
- prodigal_erik 13y agoI wouldn't take a definition seriously that failed to exclude lottery tickets. Ever since Rich Dad, Poor Dad I've been careful to distinguish assets that bring income, and other forms of property and equity whose price is purely an illusion supported by speculators' predictions about other speculators' whims.