Speculating on Investment, Or Investing in Speculation?

[peristaltor]

The two words "investment" and "speculation" are to some synonymous, to others diametrically opposed. I find myself in the latter camp, though the confusions and conflations these two terms suffer makes it difficult to say the least even to articulate what about the differences should be emphasized. I guess I'll first let a supposed expert

Comments

[peristaltor]

To be honest, I kinda screwed up the post because I did not have my idea of investment in my head. The entire thing was a wrestling match between what I think a definition for "investment" might be and what most think it actually is (like yours).

For me, to "invest," one must move one's wealth into a purchase that:

• is physical in nature (aka an object); and
  
• will produce a physical dividend sufficient to recoup the initial outlay of wealth in a reasonably definable time period.

This modified definition will by necessity render stock and most bond purchases as speculative, since most are bought as places to park money in the speculative hope that the purchase will hold its value better than the money used to purchase it. (In an inflating money supply, money loses value over time, and thus must be converted into a commodity perceived as one that grows more valuable, lest one's overall cache of wealth diminish.)

And why would I (am I) constantly challenging standard definitions? Simply, I believe we are heading for a period of profound change that will affect standard definitions anyway, and that it's prudent to alter our definitions now before definitions that worked in the past prove hopelessly off the mark, bankrupting people of the cached wealth they may need for future survival.