Introduction
At its core, both investing and speculating consists of taking a position on an equity. You think it will go down in price or you think it will go up in price. The difference is the reason they took the position.
What is Investing?
The investor takes a position because they believe the company will succeed or fail.
What is Speculating?
The speculator takes a position because they believe the stock price will rise or fall.
What is the Difference?
In the long run, the stock price and the company’s success will match. However, in the short run, price movements within a stock are completely meaningless. The price randomly moves around like a drunk stumbling their way home. To speculate is to see meaning in that stumbling and to take a position based on how you think the price will change. For example, if the price of a stock has been rapidly going up, a speculator buys the stock purely because they think the price will continue to go up. They are buying according to the Greater Fool Theory. They buy the stock at a high price because they think an even bigger fool will buy it from them at an even higher price. It is very important to be able to make the distinction between the two terms.
Investment Fee Structure
| Rate | Assets Under Management |
| 1.44% | Below $125,000 |
| 1.00% | Between $125,000 and $750,000 |
| .85% | Between $750,000 and $1,250,000 |
| .80% | Between $1,250,000 and $1,750,000 |
| .75% | Between $1,750,000 and $2,500,000 |
| .70% | Between $2,500,000 and $3,250,000 |
| .65% | Between $3,250,000 and $4,250,000 |
| .60% | Above $4,250,000 |
A single rate is applied to the entire account. So a person with a $750,000.01 account pays less than a person with a $750,000 account. I will waive personal tax return fees for accounts over $1 million. For accounts that are above $5,250,000, we’ll need to discuss a custom rate.
As I’m writing these to help my readers, I would be very appreciative of any input in regards to what I should write next. If you want me to write about a particular topic, please contact me. Please contact me if you would like to submit a post to my blog.
If anything that I mentioned above interests you, please consider downloading my free e-book. The book contains my thoughts on investment management and some information that I think everyone should know. You can also download it below.
E-Book Download
Questions for the comments
Did my explanation make sense? Do you agree or disagree with what I said?
