Introduction
It is my personal finance research. I have to learn how not to gamble in the stock market, and learn to invest instead. I have to study early before next bear market comes, so I can invest more on equities and then invest long term.
More research
It is quick and easy way to read the article written on Dec. 12, 2017. I like to take some notes as well.
Here is the article.
An uncalculated risk is a random risk, such as flipping a coin or putting a chip on black. A calculated risk addresses what he considers the two main risks investors face: capital risk, or the risk of your investment losing money, and objective risk, or the risk of not achieving your investment objectives.
If you're speculating, your confidence may waver.
Because speculation is wishful thinking, it's not rooted in reality.
If investing is diversifying your return over the entire stock market by purchasing a Standard & Poo's 500 index fund, speculating is trying to get large returns from a single investment you hope is right.
Gauge how emotionally involved you are in the process. Extreme emotions are generally a sign that you're speculating.
If you are feel euphoric, you're speculating. And if you feel terrified, you're speculating.
If you investments are keeping you up at night, you're probably speculating by taking on too much risk.
I like to read more carefully the following statement.
Speculating and investing both require understanding the risks involved, but while an investor would have a reasonable assurance of the principal's safety for a satisfactory return, a speculator may not. Investors have a longer-term perspective for the use of their capital, which is another factor that often distinguishes a speculator from an investor.
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