• INVESTING: Buying an asset and holding on to it for the LONG-TERM in anticipation that the VALUE of the asset will increase.
• SPECULATION: Buying something in anticipation of a SHORT-TERM change in the PRICE.

One is about VALUE, the other is about PRICE. One is LONG-TERM, the other is SHORT-TERM.

Keep in mind that almost everything you read, watch, or hear in the financial press is about PRICES in the SHORT-TERM. The people talking make money from selling magazines or from other speculating (commissions) not from investing. It’s not an INVESTMENT industry, it’s a SPECULATION industry.

INVESTORS (people who build wealth by buying great assets and holding on to them for a long time) generally do not make their money by talking other people into speculating. Consider the advice of one of the industry’s leading INVESTORS, Warren Buffett:

“There’s very little money to be made recommending our strategy [buy-and-hold].Your broker would starve to death. Recommending something to be held for 30 years is a level of self-sacrifice you’ll rarely see in a monastery, let alone a brokerage house.”

So, if you are considering making a change to your INVESTMENT plan based on something you heard from the SPECULATION industry you should reconsider.

Confusing INVESTING and SPECULATING is almost always costly. For more information about investing versus speculating, you can read The Behavior Gap Snapshot.