All week I’ve been hearing about the rise of the dollar, the fluctuation of oil, the falling euro, but the one common word I’ve been hearing more and more is speculation.
Will the Fed raised rates? Will it go up? down? stay the same? What’s happening in Europe? what’s happening in the Middle East? “Market sectors moving on SPECULATION.”
What is speculation?
The forming of a theory or conjecture without firm evidence.
When you’re putting your hard earned money into stocks, do you want to invest? or do you want to speculate?
Think of investing like buying a car, do you watch a commercial, run out, and put 20 or 30 thousand dollars of your hard earned money into it? Or do you take the time to research the car, visit dealerships, talk to people who own it-even take it for a test drive? If you wish to speculate, take your chips, go down to the casino and have a good time. There is no confusion as to what you are doing. If you wish to invest, take the time to research the companies you’re buying, take them out for a spin, purchasing a few shares, start slow, but understand that once you learn how to invest, you will never speculate again, and that’s when the real returns start.
If you do not have the time or patience to do the work, no worries, as long as your investment horizon is long, 20, 30+ years, there is a simple no brainer that always wins, in two simple words, “Index Fund”.
A simple, low cost, index fund, with dividends reinvested in which you keep adding money every time you get that itch. I own and recommend Vanguard VFIAX. There are others that preform the same, but at the end of the day the results are undeniable.
Tarek Salib; Managing Partner – Vanquish Capital Management – A long/short value fund
Vanquish Capital Management is Long: Vanguard (VFIAX)