If you know you are gambling with your investing and you enjoy it, there is nothing wrong with risk-taking and speculation. But some people fail to realize this type of behavior in not truly investing and that they are leveraging (and risking) the majority of their wealth in this practice.
If you are on track to meeting your financial goals and you have a strategy for 90 percent to 95 percent of your money that you stick to, gambling with the remaining 5 percent to 10 percent is OK, as long as you know you’re gambling. You also need to be OK losing everything you are gambling. If you aren’t, a sustainable, long-term strategy for your wealth, taxes, investments and legacy is in your best interests.
(Editor’s Note: This column originally appeared on Investopedia.com.)
— By Timothy Bock, CEO of Summit Portfolio Management