The word speculative is used in investing circles as a dirty word.
This is interesting to me, because when talking about investing, the term “speculative investment” is moot.
Every investment is speculative.
If you a dividend stock, is it speculative? Of course. You are speculating (guessing) that the dividend and stock price will continue to rise, or at least stay constant.
If you buy a house, is it speculative? Of course. You are speculating that the prices of houses will continue to rise (you’re obviously not buying because you think house prices are going to fall).
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If you buy a value stock with flawless fundamentals and a bullet proof balance sheet, are you speculating? Obviously you are, because you don’t know what future balance sheets are going to look like. You’re speculating that they will be as good as the previous ones.
Maybe you will be right (Coca Cola) or maybe you will be wrong (Enron), but to say buying a blue chip stock is any less speculative than buying a growth stock is misinformed. Both require 100% speculation, because you can see 0% of the future.
So if someone tells you, “Don’t invest in Bitcoin, it’s all speculation”, ask them for an investment that isn’t all speculation.
You will be waiting a long time, because there isn’t one.