Investment vs. Speculation

​At James A. Colley, Inc., we firmly believe in the power of intelligent investment as the primary strategy to grow our savings dollars.  This concept seems simple enough on the surface, but it is striking how many people get it wrong.  Intelligent investment involves a disciplined and methodic design and implementation of a strategic plan.  In most cases, an Investment Policy Statement (IPS) is developed for our clients which functions as the design plan and roadmap for ongoing management of a well-defined investment plan.  Periodic reviews,rebalancing, and contingent strategies are all part of an effective IPS.

​Our philosophy tends toward the conservative side of investing.  We believe in diversification.  We acknowledge the impossibility of predicting, with consistency, the future direction of markets and/or individual securities.  We believe in diversification across carefully selected asset classes as an effective method to navigating whatever the economic and financial road ahead may look like.  At James A. Colley, Inc., we reject speculation as a vehicle to grow our savings for critical long term objectives such as retirement.  We’ve all seen it.  A neighbor has a nephew working for an exciting new company and wants to “get in on the ground floor.”  A stock broker calls us at dinner time to tell us about a “hot stock” that we can’t afford not to buy right now.  A news item catches our attention concerning some interesting technology that we think will revolutionize some aspect of life.  These are all examples of speculative investing.  Guesswork.  It amounts to little more than taking a trip to Vegas and hitting the casinos.  To be sure, it might be fun for thrill seekers.  And we may even strike it rich.  But, more often than not, our wallets are a lot emptier when the trip is over.

​We counsel our clients away from speculative practices.  For a few die hard thrill-seekers with the financial means, we have recommended a “set aside” account for speculative investing, while the rest of the portfolio is appropriately invested to meet future objectives.  But for the vast majority of our clients, we recommend solidly designed, carefully constructed, fully-diversified portfolios which provide opportunity for maximized growth while limiting downside risk in line with client goals.

* Wealth Management * Financial Planning *