Investing or Speculating? The Difference Between Trader and Investor

When it comes to financial markets, one of the most common questions that arises is: “Are you investing or speculating?” While this may seem like a trivial question, the answer is crucial to understanding not only the strategy you should adopt but also the risks you are taking. Many people use these terms interchangeably, but there are significant differences between investment and speculation, as well as between an investor and a trader.

In everyday language, it seems that the goal is always the same: making money. But if you don’t truly understand what you are doing when you put your capital into markets, you risk finding yourself in complicated situations, possibly losing a part, or even all, of your investment. So let’s dive deeper into what it means to invest versus speculate, and the differences between an investor and a trader.

Investment vs. Speculation: What’s the Difference?

Let’s start with the definitions of investing and speculating. Although both actions involve putting money into a financial asset with the intent of profiting, the way they are carried out is fundamentally different.

Investing means purchasing an asset with the expectation that, over the long term, it will either grow in value or generate cash flow, such as dividends from stocks, interest from bonds, or rental income from properties. The investment horizon is usually long-term, often spanning decades, and the goal is to build sustainable wealth. An investor focuses on the quality of the asset, looking for assets that can provide steady returns over time.

Speculating, on the other hand, involves purchasing an asset with the goal of selling it at a higher price in the short term. Speculation focuses on price fluctuations in the near term, and the profit does not come from the intrinsic value of the asset, but from market dynamics. A speculator and a trader are looking for quick market movements and trying to capitalize on those price shifts in a short period.

1. Time Horizon: Long-Term vs Short-Term

One of the key differences between investing and speculating is the time horizon. Investors typically focus on long-term goals, such as retirement or building generational wealth, and are willing to hold an asset for years, even decades, if necessary. Investing is about having patience and waiting for the asset’s value to grow over time.

In contrast, a speculator is focused on short-term goals. They want to see quick results, often within days, weeks, or a few months. Speculation is about taking advantage of rapid market movements. Speculators look to profit from temporary factors, such as company news, geopolitical events, or any other catalysts that might drive prices in a favorable direction over a short time frame.

2. Priorities: Capital Safety vs Return

Investors tend to prioritize the safety of their capital. Following the principles of Value Investing, they are more inclined to conduct in-depth research on the assets they invest in, evaluating intrinsic value and seeking assets that can produce consistent cash flows. Risk, for investors, is minimized through smart diversification and a defensive approach.

Speculators, on the other hand, are willing to take greater risks in exchange for quick and significant returns. If an investor cares about the long-term sustainability of their portfolio, a speculator focuses on maximizing returns in the short term, regardless of the underlying asset’s stability. Professional speculators, like traders, often use tools such as leverage to amplify gains, but this also exposes them to bigger losses.

3. Cash Flow vs. Price: What Really Matters?

Another critical aspect that differentiates investment from speculation is the type of return sought.

Investors focus on cash flows: dividends, interest payments, rental income. The idea behind investing is that an asset should be productive, generating income that justifies the invested capital. Even if the asset’s price fluctuates, the investor can still earn a return from the cash flow (such as dividends or interest payments), making the investment valid even during market downturns.

Speculators, by contrast, care almost exclusively about the price of the asset. Their attention is on market fluctuations and price movements rather than the inherent value of the asset itself. If an asset’s price declines, a speculator may choose to sell at a loss, betting on a quick price recovery. Here, cash flows matter less—what matters most is a rapid price increase.

4. Strategy: Diversification vs. Concentration

An investor’s strategy is typically diversified. They aim to minimize risk by spreading their investments across a broad portfolio of assets, which can include stocks, bonds, real estate, mutual funds, etc. The goal is to achieve steady, sustainable returns over time, reinvesting the profits back into the portfolio.

A speculator, on the other hand, adopts a concentrated strategy. Their focus is on a few select bets, carefully chosen, and followed with a meticulous, almost obsessive attention to detail, trying to extract maximum profit. The risk is greater, but the goal is to seize the right opportunity at the right moment.

5. Integrating Investment and Speculation

It is possible to integrate investment and speculation, but it must be done in a disciplined manner. The majority of investors should focus first on building a solid long-term investment strategy, using diversification and aiming for capital safety. Only a small portion of their capital should be dedicated to speculative activities, like attempting to profit from short-term market movements.

The biggest mistake a saver can make is confusing investing with speculating. Mixing the two can lead to devastating losses. Speculating without a clear strategy and proper risk management can result in a series of reckless bets that undermine your financial stability.

Conclusion: Understanding the Financial Markets Game

Investing and speculating are two distinct approaches to financial markets. The investor has a more defensive, long-term approach, aiming to build sustainable wealth over time. The speculator, on the other hand, plays a short-term game, trying to take advantage of price fluctuations for quick profits.

Understanding this distinction is crucial to avoid making mistakes and jeopardizing your financial future. If you don’t know which game you’re playing, the risk of losing money increases significantly. That’s why every saver should first and foremost be an investor. With a rational, well-thought-out approach, you can achieve satisfactory results in the financial markets without competing directly against sophisticated algorithms or professional speculators.

The Super Bowl, Bangladesh butter production and the Stock Market

What’s the correlation between the performance of the American stock market, the Super Bowl-winning team, and the production of butter in Bangladesh?

At first glance, it seems like a nonsensical question, and you would be correct in thinking there is no obvious connection. But interestingly, in the past, researchers have observed what seems like a correlation between the American stock market and these (and other) unusual phenomena. So, how is it that seemingly unrelated events can appear to follow similar trends, and how does this relate to investing?

Understanding Correlation in the Stock Market

In financial markets, correlation refers to the relationship between two or more variables. When two events or financial instruments move “in unison”—both rising or both falling—this is termed a positive correlation. When they move in opposite directions, it’s a negative correlation. Understanding correlations is a fundamental part of building a well-balanced investment portfolio, as investors often use correlations to diversify their holdings or to predict market trends based on the movements of related assets.

However, it’s important to remember that correlation doesn’t imply causation. The key issue arises when correlations are misrepresented, often leading to faulty predictions and poor financial decisions.

The Super Bowl Indicator: A Case of Misleading Correlation

Let’s take a look at the so-called “Super Bowl Indicator.” For years, some have claimed that the outcome of the Super Bowl can predict the performance of the stock market for the year ahead. Specifically, if the team from the old American Football League (AFL) wins the Super Bowl, the market will have a bullish year. If the team from the older National Football League (NFL) wins, the market will have a bearish year.

Between 1967 and 1994, this “Super Bowl Indicator” had an accuracy rate of around 96%, which caused many to believe there was a meaningful connection between the event and market performance. But here’s the catch: this correlation is purely coincidental. The accuracy of the Super Bowl Indicator dramatically declined after 1994, and the supposed “predictive” power of the Super Bowl was rendered irrelevant.

So, while it’s true that there was a period where the market moved in the same direction as the Super Bowl result, that doesn’t mean the victory or defeat of an American football team influenced the stock market. The correlation was just a coincidence, and when examined further, it became clear that there was no causal relationship.

Butter Production in Bangladesh: A Global Example of Coincidental Correlation

Now, let’s take this concept even further with an example that’s even more bizarre but equally illustrative: the production of butter in Bangladesh. Yes, you read that right—some analysts have even claimed that there is a correlation between the production of butter in Bangladesh and the performance of the U.S. stock market.

While it may sound absurd, certain studies have noted that in some years, both the stock market and butter production seemed to follow similar trends. However, this correlation is purely incidental, with no direct cause-and-effect relationship. The fact that two unrelated events happen to mirror each other in a specific period does not suggest that one is influencing the other.

Much like the Super Bowl Indicator, any “correlation” between the production of butter in Bangladesh and U.S. stock market performance should be treated with skepticism. This serves as a prime example of how easily one can be misled by coincidental data.

The Dangers of Misleading Correlations

So, why do these correlations appear to be credible, and why are they so dangerous to investors?

At first glance, the apparent pattern or correlation might seem logical or meaningful, especially when data over a long period supports the trend. However, human nature tends to seek patterns and explanations, even when none exist. This phenomenon is called apophenia, and it’s the tendency to perceive connections in random data.

The temptation to rely on such “predictive” correlations can lead to poor investment choices. Investors might make decisions based on what they believe to be a reliable trend, only to be caught off guard when the trend fails to hold in subsequent years.

For instance, if someone believed that the Super Bowl Indicator would predict a strong year for the market, they might have been unprepared for the years when the correlation broke down. Similarly, anyone using the Bangladesh butter production trend as an investment guide would have been relying on a completely meaningless relationship.

How to Navigate Stock Market Predictions

When making financial decisions, it’s important to be objective and critical of any correlations you come across. Always ask yourself: Does this correlation make sense? Is there any plausible connection between these two events, or is it simply a coincidence?

While some correlations, such as those between different financial instruments (e.g., stocks, bonds, commodities), might have a reasonable basis due to shared economic factors, others—like the Super Bowl or butter production in Bangladesh—are purely coincidental. Relying on these types of correlations can skew your investment decisions and lead to unforeseen risks.

Instead of focusing on questionable correlations, it’s better to focus on well-established investment principles, such as diversification, risk management, and fundamental analysis. These tools are far more reliable in building a sound, long-term investment strategy.

Conclusion

In conclusion, the performance of the stock market is not influenced by the Super Bowl or the production of butter in Bangladesh, no matter how “accurate” some correlations may appear at first. Misleading correlations can create false patterns that seem logical but lack any real substance. When making investment decisions, always ensure that your choices are based on sound financial principles, not coincidental trends. By doing so, you’ll avoid the pitfalls of correlation-based forecasting and stay on track toward achieving your financial goals.

A Quick but Important Thought on Investments

If you’re currently in the process of capital accumulation, you should be hoping for a market downturn. Yes, you read that correctly. A decline in market prices, often seen as a cause for concern by many, can actually present a golden opportunity for those looking to build wealth over time.

For long-term investors, particularly those still in the early stages of saving and accumulating capital, market pullbacks are not something to fear. Instead, they should be embraced. If you’ve carefully curated your investment portfolio, aligned with your long-term goals and risk tolerance, a market downturn provides a chance to buy quality assets at a discount, ultimately improving your overall returns.

Let’s break this down. When you first considered investing in a stock or bond, there was a price you were comfortable paying. Now, with a downturn, those same investments are available for a fraction of the original price. If you liked the idea of buying something at a certain price, you should love the idea of buying it for less. It’s a chance to accumulate more shares or units for the same amount of capital, setting you up for more substantial future gains when the market inevitably rebounds.

An Example: The 2020 COVID-19 Market Crash

Take, for example, the stock market crash that occurred in March 2020, triggered by the onset of the COVID-19 pandemic. During this time, global stock indices plummeted, and investors were faced with significant uncertainty. However, those who remained calm, focused on their long-term strategy, and bought into the market during this downturn were handsomely rewarded as the market recovered and surged to new highs within a year.

For instance, the S&P 500 dropped by around 34% from February to March 2020. Yet, by December 2020, it had fully recovered, and investors who capitalized on this downturn saw substantial gains. This is a classic example of how market declines, while uncomfortable in the short term, can offer excellent opportunities for long-term investors.

Who Should NOT Hope for a Market Downturn?

While market downturns are a boon for many investors, they are not universally beneficial. If you are not in the capital accumulation phase — that is, if you’re retired or relying on investments for income — the situation is different. For those in the capital annuity phase (where you rely on the returns from investments to cover living expenses), a market downturn can be more problematic. In such cases, strategies focused on preserving capital and generating income, rather than accumulating more, are key.

Similarly, if you do not have available funds to invest, or if you’re simply living paycheck to paycheck without any surplus to allocate toward investments, you should not be thinking about the market. Whether inflation is high or low, it’s essential to resist the temptation to “invest in liquidity” when your financial position doesn’t allow it. The key to success in investing is to have a solid financial foundation first — this means having enough cash on hand to weather personal emergencies and avoid selling investments in a downturn.

Lastly, for those who don’t have a clear financial plan or are simply following the market trends of the moment without understanding their personal goals, a downturn might indeed be a risk. Without a strategy or risk management plan in place, panic selling can occur, and a market correction can result in significant losses. A market downturn can expose weaknesses in a poorly thought-out investment approach.

Shifting Perspective: See Downturns as Opportunities

The important takeaway here is that market downturns, while they may induce short-term fear or anxiety, should be seen as opportunities to strengthen your financial future. For long-term investors, a downturn is an opportunity to buy into the market at a lower price, increasing your chances of superior long-term growth when the market inevitably rebounds.

Warren Buffett, one of the world’s most successful investors, famously said: “Be fearful when others are greedy, and greedy when others are fearful.” This is precisely the mindset you should adopt during market declines. While others may panic and sell off their holdings in fear of further declines, you can take advantage of lower prices to invest with confidence.

Conclusion

In conclusion, market downturns don’t have to be a cause for panic — for those in the accumulation phase, they represent a chance to strengthen your portfolio and position yourself for future success. As long as you have a solid, long-term financial plan in place, a temporary market decline can be seen not as a setback, but as a strategic opportunity. So, the next time the market dips, instead of worrying, consider it your chance to buy discounted investments that will pay off in the years to come.

Always Looking for Meaning, Even When It Isn’t There

Not knowing what will happen in the future is unsettling. It’s human nature to seek meaning in events, to turn randomness into something comprehensible. We are wired to find patterns—similarities, connections, stories—in an attempt to create order out of chaos.

This is why, when we look at clouds, we sometimes see faces or shapes. Our brain is constantly scanning for familiar patterns, trying to make sense of the world around us. This is the same reason why we sometimes over-interpret events in our financial lives. The mind is simply looking for a story to explain things.

We often do this in our investments too. It’s why we search for patterns in the stock market or try to explain why one stock is up and another is down. However, these interpretations can lead us astray. In finance, this behavior is part of the reason why investors often fall victim to what Nassim Taleb calls the “narrative fallacy”: the tendency to create simplified, often incorrect, stories from complex events.

The Danger of Looking for Meaning

Taleb’s concept of the narrative fallacy is an essential one for investors. It’s the tendency to retrospectively create simple narratives around randomness. For example, after a short-term market dip, you might convince yourself that you made a bad investment decision, that there’s some “hidden reason” why your portfolio is underperforming. But this is exactly what Taleb warns against: “we are narrative creatures” who are always searching for a cause, even when there is none.

This desire to find a cause-and-effect relationship in everything is part of the reason we struggle with randomness. We want to attribute meaning, but randomness is inherently unpredictable. Consider the stock market: short-term fluctuations are primarily random. They are driven by countless variables—some known, many unknown—and the human brain struggles to accept that we simply can’t predict it with certainty.

How Randomness Affects Your Investments

Let’s say you’re an investor who has been in the market for just a few months. Your portfolio drops by 10% in a week. In that moment, it’s tempting to believe that you’ve done something wrong, that your decision-making process must be flawed. Or perhaps you attribute the drop to a mistake that “caused” the loss.

However, this is where understanding the true nature of randomness is crucial. Nassim Taleb’s work in his books, Fooled by Randomness and The Black Swan, emphasizes that randomness plays a huge role in our financial lives. What may seem like a disastrous outcome or a “bad choice” might simply be the result of a random fluctuation. It’s important to remember that in investing, especially in the short term, there is a massive element of randomness—something we cannot predict or control.

Taleb famously states, “It’s not the events you expect, it’s the ones you don’t that change your life.” When investing, we must remember that small, random events can have outsized effects on your portfolio. The key is not to react emotionally to these events but to keep your focus on the long term and trust the strategy you’ve set.

Embracing Randomness in Your Investment Strategy

So, how can you embrace randomness in your financial journey? The first step is to understand that short-term market movements are unpredictable. If you’ve done the right financial planning and are committed to a strategy based on solid principles, there’s no reason to panic when the market experiences a setback.

Taleb’s idea of “antifragility” is helpful here. He argues that systems—whether financial, personal, or even societal—can be made stronger by exposure to volatility and randomness. Rather than fearing randomness, we should build systems that can benefit from it. In investing, this means diversifying your portfolio and focusing on strategies that can weather market fluctuations without forcing you to abandon your goals.

The Power of Patience and Long-Term Focus

If you’ve created a well-balanced investment plan, stick to it. Overreacting to short-term volatility will only undermine your long-term success. In fact, over time, randomness tends to even out. Taleb suggests that the real key to success is patience and resilience. The market will fluctuate, but those who are able to withstand these fluctuations—and who focus on long-term goals—will ultimately emerge ahead.

So, rather than worrying about every small market dip, consider how you can build resilience into your strategy. Stay focused on the fundamentals of your financial plan. Avoid the temptation to create stories out of random events, and recognize that your emotions, driven by the need to find meaning, can cloud your judgment.

Conclusion: Accepting the Role of Randomness

As you move forward with your investments, always remember: the desire to make sense of everything is deeply ingrained in us, but it often leads us to misinterpret randomness as something more significant than it is. In the world of investing, randomness is an unavoidable force. Instead of trying to fight it, accept it, and design your financial strategy to thrive in a world where the unexpected is the only certainty.

So, the next time you experience a setback in your investments, don’t jump to conclusions or blame yourself. Trust in your plan, ride out the randomness, and remember that long-term success is built on resilience, not on short-term accuracy.

Be Rational in a World Full of Temptations

“Unfortunately, people need good advice, but they want advice that sounds good.”
— Jason Zweig

In an age where we have access to vast amounts of news—often contradictory—that tries to capture our attention in every way, this statement takes on even greater significance. The fact is, “desire” (what we want) and “necessity” (what we need) lead to completely different and often conflicting paths.

This divide is especially evident in personal finance, where emotions and impulses can often override rational decision-making. We may know what’s best for us in the long run, but it’s easy to get swayed by the allure of quick gains or easy solutions. This is where the challenge lies: how can we stay rational when we’re constantly surrounded by temptations?

The Dilemma: Desire vs Necessity

What we desire is often tempting: quick profits, instant results, risk-free promises. However, what we truly need for long-term financial health requires patience, discipline, and careful planning. In other words, the choices that benefit our financial future most are often the ones that are less immediately gratifying but ultimately more sustainable.

A Practical Example: Personal Finance

Advice we would like to hear: Follow this easy strategy, buy this financial product, give your money to this trader, and in a short time, with no risk, you’ll get rich.
Advice we need: Understand your short-term and long-term financial goals, build a strategy consistent with your plan, diversify your investments, and don’t let emotions take over.

In the first case, the desire for quick and easy gains is strong, but this approach often leads to unnecessary risks and impulsive decisions that hurt long-term financial health. In the second case, rationality and planning take center stage. The idea of planning, diversifying, and maintaining disciplined behavior is less exciting, but it’s far more useful for building a solid financial foundation.

Rational vs Emotional: The Inner Battle

As Daniel Kahneman, the Nobel laureate in economics, points out:
“The real difficulty is that we don’t really know what we want. We want what we want when we want it, and we forget what we really need.”

Kahneman explains that we have two systems of thinking: System 1, which is fast, emotional, and intuitive, and System 2, which is slow, rational, and reflective. When it comes to personal finance, System 1 pushes us toward immediate gratification (like investing in a “hot” new financial product without understanding the risks), while System 2 encourages more thoughtful decisions, such as investing in a diversified portfolio with a long-term strategy.

However, it’s not always easy to listen to System 2, especially when we’re bombarded with emotional triggers and temptations. That’s why it’s essential to be aware of our natural tendencies and learn to manage them.

Simple Steps to Stay Rational

Set Clear Goals: Define your short-term and long-term financial goals. What are you saving for? Retirement? A house? College tuition? When your goals are clear, temptations become less appealing.
Diversify Your Investments: Don’t put all your eggs in one basket. Diversification is one of the keys to reducing risk and building long-term financial security.
Manage Your Emotions: Fear and excitement are powerful emotions. Learn to recognize them and don’t let them dictate your decisions. Remember, the market is cyclical, and in the long run, patience pays off.
Use Technology: Leverage tools and apps that help you track your progress and stay on course. Automating savings, for example, is a great way to avoid falling prey to short-term temptations.

Conclusion: The Choice Is Ours

It’s not easy to make rational decisions in a world full of emotional triggers. But as Kahneman shows, we can train our rational thinking, especially when we’re aware of the emotional biases that often guide our choices. The real challenge isn’t knowing the right path, but walking it, despite the temptations along the way.

So, the next time an “easy choice” seems too good to pass up, stop for a moment. Reflect on what’s truly best for your financial future, and ask yourself: is it desire in the moment or necessity for the long-term that’s driving my decision?

The best choices are the ones that help us build a solid future, not the ones that provide instant gratification.

Overestimate the Present

One of the things you often hear from motivational gurus is that the most important thing is neither the past nor the future, but the present.

“Do not dwell in the past,
Do not dream of the future,
Concentrate the mind on the present moment.”
(Buddha)

I agree on the importance of being focused on the here and now in life, but when it comes to investments, this advice doesn’t quite apply. In fact, in the world of investing, the present doesn’t really exist.

Why? Because investment decisions are inherently tied to the past and the future—not to the present moment.

The Present Doesn’t Exist in Investing

Imagine you’re asking: “How much does this investment return?” This question might sound familiar, but it’s actually meaningless when it comes to investments that carry risk. The present is a snapshot in time, and when it comes to risk, there is no “return” in the moment—only a historical one or an expectation about what could happen next.

Let’s break it down:

The Past: “How much has it returned?” This refers to a historical fact. It’s something that has already happened, and we can measure, discuss, and reflect upon. Past performance is useful for analysis, but it’s not a guarantee of future success.
The Future: “How much will it return?” This is the critical part. The future is what you’re ultimately investing for. But the future is unpredictable—it’s an expectation, a forecast, not a certainty.

The challenge lies in the fact that, as investors, we make decisions now that affect the future, all while being influenced by the past. This “anchoring” effect, as psychologists call it, can make it difficult to make objective, future-focused decisions.

The Real Power of Time in Investing

Understanding the relationship between past, present, and future is key to making smarter investment choices. While the present moment may seem all-important in many aspects of life, in investing, it’s the combination of understanding past performance and anticipating future outcomes that should guide your decisions.

Take, for instance, the common mistake of focusing too heavily on current market trends. The “here and now” might suggest an immediate investment opportunity—stocks are soaring, or a particular sector looks hot. However, if you’re driven only by the present moment, you might overlook long-term trends or historical cycles that tell a different story.

This is why balancing the three dimensions of time is essential. Here’s how you can apply this to your investment strategy:

Learn from the Past: Review historical performance, but understand it’s not a prediction of future returns. It can, however, help you avoid common pitfalls and make informed decisions.
Manage Current Expectations: The present provides a snapshot of the market, but remember that it’s full of noise. What’s happening today may not be indicative of what will happen tomorrow.
Be Mindful of the Future: The future is where your wealth grows, but it’s uncertain. Focus on managing risks and aligning your investment decisions with long-term goals, not short-term fluctuations.

A Practical Example: The Stock Market and Long-Term Growth

Consider the stock market. In the short term, it can be volatile. If you base your decisions solely on the present moment—let’s say reacting to daily price movements—you might miss out on long-term growth opportunities. However, if you anchor your investments to your long-term goals and historical trends (e.g., the market’s historical ability to grow over time despite short-term downturns), you’re more likely to make decisions that benefit you over the long haul.

Conclusion: Don’t Forget the Three Dimensions of Time

So, when you’re navigating the world of investments, remember: the present is only part of the picture. By looking at past trends and keeping a clear focus on future potential, you can make smarter, more informed decisions that align with your financial goals.

How do you currently approach the “present” in your investment strategy? Take a moment to reflect—are you anchored too much in the here and now, or are you considering the bigger picture?

Investing isn’t about the present. It’s about understanding the forces of time and making choices that will pay off in the future.

In the Right Place at the Right Time

If we look back at the past, even the stocks that have earned the most would not appear to us as “ideal” investments.
Analyzing the past can be a great exercise in understanding things that would not otherwise be so clear.
How many of us have thought it would be great to have a time machine and go back 20 years to buy all the stocks that have seen tremendous growth?
Unfortunately, as of today (January 11, 2025), the time machine has not yet been invented.
The reality is a bit different: when we study the charts, we realize that even the stocks that have earned the most over such a long period have faced moments that would have made them unattractive.
Let’s remember: growth is never linear.

If we look at the shares of the S&P 500 and select those that have earned the most since their debut on the stock market, we discover that there have been many occasions that seemed to mark the end of those stocks.
For example, one of the best-performing shares of the S&P 500 is Netflix (NFLX). From its IPO in 2002 to January 2025, its increase was +149,260%.
$1,000 invested in 2002 would have grown to $1,492,600 in 2025!
These are the numbers that make beginners (and even the most experienced investors) dream of getting rich by investing little money in a few stocks — and without any problems.
The reality, however, is very different.
In 2004, Netflix lost over 60% of its value and didn’t recover until 2009.
In 2011, it lost more than 80%, and since then, it has lost more than 30% several times.
In these situations, it is normal to ask yourself, “Has this stock come to an end? Or is it still worth investing in?”

Let’s always remember: our actions must be consistent with our strategy.
If our strategy is structured over the long term, we should not worry too much about negative months, especially when there is a long-term positive trend (the opposite is also true — the euphoria during periods of great growth is not ideal).
Negative periods could even be an opportunity to buy attractive stocks at lower prices.

The most important things to consider are:

Don’t get overwhelmed by emotions and always stay rational.
Have a strategy and remain consistent with it.
Conduct thorough analysis of the financial instruments we buy.
Diversify.

Investing is as much about patience and discipline as it is about making informed decisions. The path to successful investing is rarely a straight line, but with a well-defined strategy, the ability to stay calm in moments of uncertainty, and a long-term perspective, we can navigate the inevitable ups and downs of the market. And while we may not have a time machine, the best time to invest is always now — with the right approach.