Investing and speculating
By Tan Kin Lian  •  November 6, 2011
The Sunday Times carried a story about young people who were investing in stocks and CFD (contract for differences). Some made trading losses but are still keen to continue "investing" in the market.It is important to use the correct term to describe the activity. It should be called "trading" or "speculating" and not "investing". When one "invest" in a company, one has to study the fundamentals of the company with the intention of holding it for many years to earn its dividend and the long term capital gain. I  know of people who bought blue chip shares and kept them for 40 years. That is "investing". Those who buy and sell shares to make a short term gain should be called "speculators" or "traders" and not "investors". There is nothing wrong with speculating or trading in shares, or gambling in the casino, if the speculator is aware about the ...
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By Tan Kin Lian
Mr Tan Kin Lian (fomer NTUC Income CEO) started his insurance career in 1966 in a local life insurance company. He has also worked in various positions as a computer programmer, organisation and methods officer and consulting actuary. Mr Tan writes daily in his blog. The information in his blog is transparent and has an open approach.

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