How do you not speculate?

[brettus]

An investor isn't necessarily trying to profit from price fluctuations. I'm not sure why you say that. A stock purchased with a 10% dividend yield will pay for itself after 10 years. Any dividend after that is pure profit, no matter what the stock price is.

Same as putting money in the bank. The investor isn't speculating on the stock price going up or down. Obviously the investor would be better off if the stock went up. The investor just wants the 10% dividend each year. Same as Cyprus depositors. They aren't banking on the fluctuations of their accounts due to depositors tax. They just want the 7% dividend (interest) every year.

Buying something in the hope that someone else will buy it off you at a higher price later - that's speculating.

Exactly. That's pretty much it.

 

[jacknapier]

An investor isn't necessarily trying to profit from price fluctuations. I'm not sure why you say that. A stock purchased with a 10% dividend yield will pay for itself after 10 years. Any dividend after that is pure profit, no matter what the stock price is.

I've owned Kodak shares since 1978. My return is -100%. So, all those dividends in the 90s did anything but pay for itself. What happens five minutes from now is a lot more predictable then what happens 10 years from now.

 

[bigboyfx]

"The role of speculators is very important in any leveraged markets as they provide the required liquidity into the system thereby allowing smooth entry and exit of traders in the exchange. A market can prosper only when there are enough number of speculators who stand behind a trade.

The intent of the speculator is just to make money out of the fluctuations in market. He can be anybody who enters a trade with the intent to make profit out of a transaction depending upon the move of the market which he perceives will happen".

 

[dameonStar]

hey there I have recently written an article that distinguishes the investing from speculation and gambling: Its in the thread: Are you an Investor, A Gambler or A Speculator? Check it out and you may just get the answer that you seek

Dameon

 

[new_trader]

I've owned Kodak shares since 1978. My return is -100%. So, all those dividends in the 90s did anything but pay for itself. What happens five minutes from now is a lot more predictable then what happens 10 years from now.

And what exactly is your point? Did I say that every investor makes money and every speculator loses money? You asked, quite simply, 'How do you not speculate' and I think that question has been answered at least five times over.

 

[jacknapier]

And what exactly is your point?

My point is that there is no way of making money in the market without selling at a better price than you bought. Which seems to be the accepted definition of a speculator.