You’ll find some big differences between traditional and speculative investments - and knowing these differences can matter a great deal when you’re trying to reach your financial goals.
You’re probably familiar with traditional investments - stocks, bonds, mutual funds, and so on.
Speculative investments include cryptocurrencies, foreign currencies, and precious metals.
Speculative investments may be riskier than traditional ones.
While stock prices do move up and down, their movements usually are nowhere near as sharp and swift as those of cryptocurrency.
Also, speculative investments have a short time frame - investors want big gains, and they want them right now, despite the risk.
Traditional investments are better suited for helping investors meet long-term goals, such as retirement.
Finally, speculative investments require investors to spend a lot of time watching price movements and responding quickly.
But when you own traditional investments, you can basically leave them alone and only make changes when needed.
Of course, some speculative investments may still be appropriate for individuals as a small part of their portfolios, assuming the higher level of risk aligns with their overall risk tolerance and investing experience.
But be aware of the risks involved before you invest.
This article was written by Edward Jones for use by your local Edward Jones Financial Advisor John Dickerson. Member SIPC.
