Speculation vs Investing
Speculation involves taking on higher levels of risk with the hope of achieving significant gains in a short period. While there are occasional success stories in speculation, it is generally considered a riskier and less reliable approach to building wealth compared to investing.
Investing, on the other hand, is a more disciplined and long-term strategy that involves putting money into assets with the expectation of generating returns over time. Investing typically involves diversifying your portfolio and aligning your investments with your financial goals and risk tolerance. The goal of investing is to build wealth steadily and consistently, rather than seeking quick gains through risky bets.
According to Gitnux only 3 % of day traders make consistent profits and approximately 72% of day traders suffered a net loss in 2019.
Day trading, which involves buying and selling financial instruments within the same day or week, can be highly risky and requires a deep understanding of the markets and significant experience to be consistently profitable.
It's prudent to be cautious when receiving investment advice from friends or individuals with a history of speculative behaviour. While they may have a successful story to share, it's essential to consider the risks involved and carefully evaluate any investment opportunity based on your own financial goals and risk tolerance.
Consistently wealthy individuals typically achieve their financial success through a combination of disciplined investing, entrepreneurship, and prudent financial management. Building wealth takes time, patience, and a well-thought-out plan that includes diversification, risk management, and a long-term perspective.