Jason Zweig

Investment versus Speculation

everyone who buys or sells a security has become an investor, regardless of what he buys, or for what purpose, or at what price,

Only 4% thought common stock would offer a “satisfactory”

return; 26% considered it “not safe” or a “gamble.

and the entire stock-buying public into “investors.”

distinction between investment and speculation in common stocks has always been a useful

some speculation is necessary and unavoidable, for in many common-stock situations there are substantial possibilities of both profit and loss, and the risks therein

speculating when you think you are investing; (2) speculating seriously instead of as a pastime, when you lack proper knowledge and skill for it; and (3) risking more money in speculation than you can afford to lose.

can be a lot of fun while you are ahead of the game.

aside a portion—

the smaller the better—of your capital in a separate fund for this purpose.

Never add more money to this account just because