Know Thyself

What is the difference between investment and speculation?

Many practitioners have considered this question. Is it the time frame? The instruments? The actors? In our experience, the line is clear: the difference between investment and speculation is internal versus external orientation. Investment is a reflective exercise, and begins by asking yourself what your goals and limits are. Speculation is an external activity, and begins with a search for profits.

So an investor begins by formulating a plan. A speculator looks for a hot tip. An investor can often handle a setback in stride. A speculator frequently gets discouraged if things go wrong and wants to bail out. Investors are usually in things for the long haul. Speculators are here one day and gone the next.

The ancient Greeks knew that wisdom begins with self-understanding. Call it the ant and the grasshopper, the tortoise and the hare, or whatever. In the long run, investors usually end up with what they need-because they’ve taken the time to know what they need.

Douglas R. Tengdin, CFA
Chief Investment Officer
Hit reply if you have any questions—I read them all!

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By |2014-09-05T13:07:54+00:00May 29th, 2009|Global Market Update|0 Comments

About the Author:

Mr. Tengdin is the Chief Investment Officer at Charter Trust Company and author of “The Global Market Update”. The audio version of each post can be heard on radio stations throughout New England every weekday. Mr. Tengdin graduated from Dartmouth College, Magna Cum Laude. He received his Master of Arts from Trinity Divinity School, Magna Cum Laude and received his Chartered Financial Analyst (CFA) designation in 1992. Mr. Tengdin has been managing investment portfolios for over 30 years, working for Bank of Boston, State Street Global Advisors, Citibank – Tunisia, and Banknorth Group. Throughout his career, Mr. Tengdin has emphasized helping clients manage their financial risks in difficult environments where they can profit from investing in diverse assets in diverse settings. - Leave a comment if you have any questions—I read them all! - And Follow me on Twitter @GlobalMarketUpd

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