Can investors ever be certain about what’s going to happen? Do forecasts or knowledge guarantee certainty? The speculative investor acts from a place of unshakable confidence. Yet, there is no certainty in markets. In guessing games, most investors get the event, the timing, or both wrong.
For example, a week ago, nobody anticipated markets to bounce. With every market move, speculation shifts to a new hypothesis. Speculators wonder whether they should stop their systematic investments. Many are contemplating buying the dip, while others regret missing the rally. Some are wondering if they’ll find fortune in another asset class. Speculators indulge in random portfolio actions, often reacting to news, tips, or events.
The path from speculative investing to thoughtful investing is short. It only requires a mindset shift: one from urgency to calibration. The intelligent investor knows that certainty doesn’t exist and prepares for eventualities. This allows an investor to vary his risk posture according to the market context. Knowing when to tone down aggression, take stock, and scale up aggression could make all the difference.
The time for speculative investing is behind us. Thoughtful and deliberate investing will take the cake.