Money Monday: Investor or Speculator?

Today more and more people are thinking about investing their money and using it to build wealth. With a plethora of online options such as Etrade, Robinhood, Merrill Lynch, and TD Ameritrade, just to name a few, almost everyone has access to purchasing stock, bonds, and or ETFs. But when you step back for a minute from the current online activities or options, are you really an investor or just a speculator?


There are specific characteristics I would suggest that define an investor. If you consider yourself an investor, you should have a certain mindset going into each transaction. For example, how can you maximize your ability to achieve sustainable gains, have self-defeating tendencies that will keep you from maxing out on your investments, and how can you minimize the chances of incurring irreversible losses?

Being an investor has nothing to do with your IQ, SAT or MCAT, or LSAT score. Being an investor has a lot to do with your emotional control, patience, discipline, and thinking for yourself at times. A critical difference between an investor and what I would refer to as a speculator is that an investor thoroughly analyzes a company and the soundness of its business practices, deliberately protects himself against significant losses, and aspire to adequate and not extraordinary performances in the stock or investment. An investor will calculate what a stock is worth based on the value of the business. A speculator will gamble that the price of the stock will increase simply because others will pay more for it. That may not be satisfactory for some of you because you have been led to believe that if your investment is not performing above the average market rate, it is not a good investment. This, at times, leads to speculation masquerading as an investor. It leads to speculating on the hottest stocks or bonds while ignoring a company’s fundamentals before purchasing the stock. Just because it’s hot and you can ride the wave, and you are fortunate to make some money, does not make you an investor. An intelligent investor may realize that a stock is riskier when the price increases and may be less risky as the price decreases. But what type of investor are you?

Investor Personality

Do you know your investment personality? If you are an aggressive investor, you want a better than average return on your investment. But how can you achieve your goal? To achieve this goal, some will purchase the stocks of companies that are expected to report increases in their short-term earnings or anticipate some other favorable company development.

Another method people use in achieving an above-average return on their investments is to emphasize the company’s record of past growth over the long term, which is considered to continue over the next several years. In some instances, investors may choose a company that has not paid above-average earnings yet but may be well-positioned in the long term. Therefore, that would support an aggressive investment.

Speculation has a way of drawing you in, and before you know it, your investment money is fully invested in speculative assets. If you are going to speculate, I suggest you not commingle our investment money with your speculation money. If you are going to speculate, you may also want to determine what percentage of your portfolio will be allocated to speculative investments versus real and actual investments.

Let’s talk Money Monday on the Zoom Conversation on April 25, 2022, at 7:00 p.m. Sign up at:


Today’s what’s up is about recession. While inflation and the cost or prices of goods and services increase, an even worst scenario may be ahead. While the economy is booming, unemployment is low, and we have lots of money in the system, what will happen when this money evaporates? Home prices will not remain this high, and the demand for vehicles will cool off. Last week, the bond market began to suggest a recession signal when you have the interest or yield on long-term bonds paying less than short-term bonds. While not quite there yet, it is a sign. May be a false alarm, but pay attention. And that’s what’s up! Let’s talk Money Mon-day fundamentals on the Zoom Conversation on April 25, 2022, at 7:00 p.m. Sign up at:

Ruthven R. Phillip, Esq., is a tax attorney, Stewardship and Philanthropy Ministry Assistant, and CEO of Give2Getrich, LLC. Give2Get Rich, LLC 2022. All Rights Reserved. Any distribution or reproduction of part or all of the contents in any form is prohibited.

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