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This is getting into semantics, but: Nothing about investing in stocks is speculation, at least in the theoretical sense. Businesses earn profits. If you buy shares in a business, you are entitled to a share of those profits. Obviously, this gains you money, and this money will (usually) not come at the cost of the business. So, you'll gain money due to dividends, and your investment won't lose money. Investing in stocks is going to be, on average, a net gain for you. In theory. And mostly in practice, see for example the massive exponential gains in the S&P 500. There's a lot more to things. For example, sometimes businesses fail and you'll have lost all your money. And on the flip side, maybe a business will grow enormously. But this just adds noise to the data, it doesn't change the fact that, on average, you should make money on stocks in the long-term. If you just buy a total market index fund, you're making a bet with a high expected value. That's not "speculation" in the same sense of going to a casino and playing blackjack or buying an asset which has no fundamental reason to rise in value (like precious metals). So, I think it's misleading to call investing "speculation". It gives off the wrong vibes, since the way most people understand the word it makes it sounds like investing is super risky. (And yes, there's some risk, don't get me wrong, but not in the sense that it's a coin flip like many people think.) |
I think bonds are considered investment although to the price sell them before term fluctuates.