The Broke Investor's Podcast

Avoid Speculation Trading

Have you heard the news? Dow Jones logged a 2,014-point drop, its largest in history this past Monday, March 9, 2020.

Now, before you pull out all of your hard earned cash and decide to put it underneath your couch, you might want to read what Investopedia has to say about the average rate of return of the S&P 500. (spoiler alert: in 1957-2018, 8%)

So, with that noted, be very careful with using your emotions while “investing”. That ends up becoming speculation trading and you’ll figure out what The Broke Investor figured out in 2012-2013 when using speculation trading, it’s the same thing as gambling.

Now, I’m not saying to not protect your portfolio. With Saudi Arabia and Russia going into an oil war that is dropping the price of oil, yet again; and with the coronavirus humbling the major China corporations, you have every right to make an informed decision.

Keyword is informed decision. Knowing that the index averages perform 5-8% higher than any savings/checking account out there and that you will get a capital gains tax if you made money when selling your stock, it’s up to you to decide what you do with your $$$.

Keep growing, keep investing.

The Broke Investor

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