Speculating vs. Investing which will give you a better outcome?

Over the past several months, there has been significant volatility in the share price of the video game retailer GameStop which was biggest headline news story for several months. The share price to soar towards the end of January when individual investors united on social media sites to drive the stock price higher to defend the company against hedge fund short positions(this was possible because of the company's small size and small float). It was a remarkable achievement and the stock price eventually reached a high of over $450/ a share. Which was about 20 times higher than the shares price was trading for in the beginning of the year. But, the huge gains proved to be short lived. Because on February 25th,GameStop share price had dropped significantlyto $44 per share - which was down by more than 80% from the highs it reached on January 26, 2021.During the time of this writing speculative trading has resumed. In the end, the GameStop saga serves as a timely reminder about the importance of implementing and adopting a long-term investment strategy, as well as the risks associated with short-term speculating. Taking the speculative approach is in many ways just like gambling. You might get lucky once in a while but that is not a sustainable strategy for successful investing. To succeed you will need a thoughtful long-term proven strategy for compounding your wealth. We believe in the importance of growing wealth strategically, using the best practices that have helped many clients to achieve their financial goals.There are several pieces in our process but when we decide to invest in a stock, we do it with due diligence and a detailed analysis of a company's past financial results, combined with the assumption of what the next 5-10 years might look like. Our investment process is no more different than how you would approach the decision to buy a small business. The same principle applies when you are investing (shares) in a public company. Our wealth management process is centered around around asset allocation and portfolio construction which research has shown to be the largest contributor for successful long-term portfolio returns. Our wealth management process involves comparing the risks vs. the rewards for many different asset classes. Our goal is build and maintain durable portfolios, which are suited for both bull markets as well as a bear market.Over the long-term, the stock market has delivered a compounded annual rates of return of 9-10% per year. But in order to achieve the results delivered by the stock market, investors need buckle up and get used the occasional market volatility and above all else resist the temptation to get involved in speculation and short-term decision making like we just witnessed for the last 5 months. I can see that at times it may be tempting to jump on the speculation train, but that approach is not base upon solid ground and will unlikely lead to investment success. We would highly suggest that you research and then consult with a Financial Advisor to develop a long-term plan that will put you in a stable position to achieve your investment goals.John C. Verducci 111 -Advisor representative atVerducci Asset Management