We can probably group speculators who know what they are doing as traders while those that do no as simply speculators. In my opinion, there are too many speculators who think they are true traders. The post is directed more at these speculators.

For long term investors, its actually good to have speculators or traders around. They can ‘take advantage’ of the liquidity provided by traders and speculators for portfolio management purposes, meaning, they can still do a buy and sell easily even when they don’t do it that frequently.

Like what you mentioned, problems arise when there are misunderstood identities.

Thanks for visiting my blog.

I would say it’s not all wrong to speculate on a market. Speculators have a role to play to provide liquidity – a willing buyer and seller at most prices allowing for investors to go in/out of the market.

But the issue would be to ‘play’ the market without understanding one’s intention. I.e. if you want to punt, do a punt and be prepared to watch the screens to know when to exit/enter.

Problems arise when people are punting but they think they are investing. Vice-versa, when people think they are investing but actually, they have no investment horizon, no target return, no risk assessment of their risk tolerance and have no understanding of the underlying investment.

That is when “playing” the market is risky.

Be well and prosper.