{"id":22835,"date":"2008-05-09T06:00:00","date_gmt":"2008-05-09T06:00:00","guid":{"rendered":"https:\/\/clusterfamilyoffice.com\/blog\/?p=513"},"modified":"2008-05-09T06:00:00","modified_gmt":"2008-05-09T06:00:00","slug":"novatos-o-tahures-diferencias-entre-invertir-y-especular","status":"publish","type":"post","link":"https:\/\/clusterfamilyoffice.com\/en\/novatos-o-tahures-diferencias-entre-invertir-y-especular\/","title":{"rendered":"Newcomers or gamblers. The differences between investing and speculating."},"content":{"rendered":"

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Unfortunately, and strange as it may seem, many people don\u2019t really know what they\u2019re getting into when they see that their savings in the bank aren\u2019t yielding much of a return and decide to do \u201csomething\u201d with that money to get more out of it. That \u201csomething\u201d is so varied that it can be confusing for anyone who doesn\u2019t know what they want. There are shares, government bonds, corporate bonds, property, investment funds\u2026 and what\u2019s more, within each category there are dozens of sub-categories! The range of investment vehicles is so vast that most people end up choosing one almost at random or, worse still, the one suggested by their current financial adviser, without being entirely clear about what they expect from that \u201cinvestment\u201d. Well, yes. Everyone knows what they expect from their investments: that they\u2019ll make them money.<\/div>\n
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But making money without having a clear understanding of the rules of the game is not only difficult, but almost impossible in the long run. An analogy that springs to mind would be wanting to win at poker without even knowing the hand rankings. What\u2019s more, even if you did know them, just imagine sitting at a table full of card sharps\u2026 Your money wouldn\u2019t last you very long. The markets are highly professional and very dangerous gambling dens.<\/div>\n
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To put it simply, there are two ways of approaching personal finance, and our success in this endeavour will depend to a large extent on our in-depth understanding of them. One is infinitely more popular; it has been written about ad nauseam and usually promises easy money with minimal effort. This is speculation. On the other hand, there is investment \u2013 always maligned and rarely promoted by financial players (as it is less profitable for their own pockets).<\/div>\n
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Speculation involves using financial instruments to capitalise on fluctuations in their price, in the hope of finding someone who will subsequently pay more than the speculator originally paid. AThe Greatest Fool<\/a>\u00a0In a proper sense, let\u2019s say. The problem with speculation is that it\u2019s directly linked to one of humanity\u2019s oldest sins: greed. Who wouldn\u2019t want to get rich overnight without lifting a finger? We all know this isn\u2019t possible, and yet people often take the bait and fall for misleading adverts for products promising sky-high returns in just a few months. Well, there\u2019s always the chance you might win the lottery\u2026 But it\u2019s important to note that 90% of those lucky enough to win in prize draws lose their money within less than 10 years.<\/div>\n
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Although it is rarely sustainable in the long term, there are indeed people who have become wealthy through speculation at specific points in time. A well-known example is that of what is probably the most famous speculator of all time,\u00a0George Soros<\/a>, who made his fortune speculating in foreign currencies \u2013 specifically the pound \u2013 by taking advantage of the fact that the Bank of England was reluctant either to raise interest rates to the levels of its European neighbours or to allow its currency to float freely. In Spain, property speculation has contributed to the enrichment of many people in recent years. The case of people putting down deposits of \u20ac10,000 or even less and then, as the saying goes, \u00abpassing the property on\u00bb to a third party, has unfortunately not been an isolated incident (and we\u2019re reaping what we\u2019ve sown). What I want to point out here is that, whilst it is not impossible to make money through speculation, it is extremely dangerous for one\u2019s personal finances to ignore the fact that the money was made in this way; for once or even twice, the gamble may pay off, but in the long run we are bound to lose out.\u00a0<\/div>\n<\/div>\n
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By contrast, investing involves putting money into assets that generate a return through methods such as dividend or interest payments, or even through capital appreciation itself if we have bought them at a discount. Warren Buffett says he has two main rules in the business world: 1) Never lose money. 2) Never forget rule number 1. And judging by the spectacular performance of his company\u2019s shares over more than 40 years, it seems that keeping these rules in mind at all times has certainly done him no harm.\u00a0<\/div>\n
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There is a wide variety of investment approaches, depending on the field in question. When it comes to Warren Buffett, fundamental analysis \u2013 or, more specifically, \u00abvalue investing\u00bb \u2013 begins with\u00a0Benjamin Graham<\/a>\u00a0and whose leading exponent in Spain is\u00a0Bestinver<\/a>, is an example of how to invest in the stock market in a way that is the complete opposite of speculation. When it comes to property, investing means buying a house at a price where the rental income covers the mortgage (something unthinkable in Spain at present) and even leaves us with a little extra each month. Or, if we prefer fixed-income investments, looking for companies with low levels of debt and attractive yields.\u00a0<\/div>\n
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The fact that investing our money first requires in-depth research usually puts many people off (it\u2019s much easier to read the business pages and choose a share that gives us a \u00abgood feeling\u00bb than to sit down and study its annual accounts for the last five years). Fortunately, there will always be people for whom this effort is worthwhile; it will bring them great satisfaction and spare them the odd unnecessary disappointment.<\/div>\n
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To conclude, I would like to emphasise that, whilst investment strategies are the most suitable way to preserve our capital and grow it slowly but surely over time, at a young age \u2013 when one has not yet taken on serious commitments (such as having children), which entail financial responsibility, speculative strategies can indeed be viable, provided you know what you are doing and the risks involved. A pinch of pepper in certain dishes can really hit the spot.<\/div>\n<\/div>\n

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Por desgracia y aunque parezca mentira, mucha gente no sabe realmente a qu\u00e9 juega cuando ve que sus ahorros en el banco no se est\u00e1n rentabilizando en demas\u00eda y decide hacer \u201calgo\u201d con ese dinero para sacarle m\u00e1s provecho. Ese \u201calgo\u201d es tan variado que llega a resultar confuso para el que no sabe lo […]<\/p>\n","protected":false},"author":6,"featured_media":0,"comment_status":"open","ping_status":"open","sticky":false,"template":"","format":"standard","meta":{"footnotes":""},"categories":[20],"tags":[],"class_list":["post-22835","post","type-post","status-publish","format-standard","hentry","category-sin-categorizar"],"_links":{"self":[{"href":"https:\/\/clusterfamilyoffice.com\/en\/wp-json\/wp\/v2\/posts\/22835","targetHints":{"allow":["GET"]}}],"collection":[{"href":"https:\/\/clusterfamilyoffice.com\/en\/wp-json\/wp\/v2\/posts"}],"about":[{"href":"https:\/\/clusterfamilyoffice.com\/en\/wp-json\/wp\/v2\/types\/post"}],"author":[{"embeddable":true,"href":"https:\/\/clusterfamilyoffice.com\/en\/wp-json\/wp\/v2\/users\/6"}],"replies":[{"embeddable":true,"href":"https:\/\/clusterfamilyoffice.com\/en\/wp-json\/wp\/v2\/comments?post=22835"}],"version-history":[{"count":0,"href":"https:\/\/clusterfamilyoffice.com\/en\/wp-json\/wp\/v2\/posts\/22835\/revisions"}],"wp:attachment":[{"href":"https:\/\/clusterfamilyoffice.com\/en\/wp-json\/wp\/v2\/media?parent=22835"}],"wp:term":[{"taxonomy":"category","embeddable":true,"href":"https:\/\/clusterfamilyoffice.com\/en\/wp-json\/wp\/v2\/categories?post=22835"},{"taxonomy":"post_tag","embeddable":true,"href":"https:\/\/clusterfamilyoffice.com\/en\/wp-json\/wp\/v2\/tags?post=22835"}],"curies":[{"name":"wp","href":"https:\/\/api.w.org\/{rel}","templated":true}]}}