As Benjamin Franklin said in his book "The Intelligent Investor" that Investment operation is one which on thorough analysis promises safety of principal and adequate return. The rest are speculative operations.
The one who follows the investment operation is Investor and the one who doesn't is a Speculator.
You must have noticed that I've written safety of principal, the initial amount. The safety of the principal amount is very important, it is even more important than getting return. Many of the person lose the principal amount and thus they are not investor they are speculators.. You have to take care not to lose money. Device your strategy such that there is no chance of losing principal amount. Diversification helps in sustaining the principal amount.
If you are able to keep even your principal amount while investing half of your battle is already won.
The second important thing is getting returns. You have to get adequate returns. You have to get enough returns to make ends meet. You can earn this through - dividends, equity - its your choice. You just have to earn enough and sure shot income to make ends meet and even more than that. If you cannot even do that you are a Speculator my friend.
Another important thing is that you have to calculate the market correctly to invest. Some speculator also pretend to calculate the market. Beware of such speculators they are the most dangerous kind of speculators.
Keep your emotions away from the process of investing. Leave your emotions at home before investing. You have to control yourself. You have to be patient, disciplined and eager to learn to be a investor.
It is not like that the Speculator do not earn they earn they earn lot sometimes, but they lose much more than they have earned and much more times. You just have to stay away from the speculators. Maintain as much distance as you can. Many market predictors, gurus, etc are speculators. Just stay away from them.
In the end, I leave you with the question "Are you Investor or Speculator?"
Please comment your answer after giving it a serious thought and don't lie to yourself. Share this with your friends and ask them the same question.
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