Should you invest … or speculate?

You’ll find some big differences between traditional and speculative investments –
and knowing these differences can matter a great deal when you’re trying to reach your
financial goals.
You’re probably familiar with traditional investments – stocks, bonds, mutual funds
and so on. Speculative investments include cryptocurrencies, foreign currencies and
precious metals,
Speculative investments may be riskier than traditional ones. While stock prices do
move up and down, their movements usually are nowhere near as sharp and swift as
those of cryptocurrency.
Also, speculative investments have a short time frame – investors want big gains,
and they want them right now, despite the risk. Traditional investments are better
suited for helping investors meet long-term goals, such as retirement.
Finally, speculative investments require investors to spend a lot of time watching
price movements and responding quickly. But when you own traditional investments,
you can basically lave them alone and only make changes when needed.
Of course, some speculative investments may still be appropriate for individuals as a
small part of their portfolios, assuming the higher level of risk aligns with their overall
risk tolerance and investing experience. But be aware of the risks involved before you invest.

Rebecca McNulty, CFP
1040 S. 5th Street
Charles, MO 63301