Speculating on Dogecoin, Bitcoin, Teslaand the whole variety seldom ends well. You have probably all heard the headlines praising speculators for making sizeable amounts of money on their lucky bets. What you don’t hear too often, however, is the novice investors who lost their shirts when they couldn’t find people paying a higher price for an asset they did.
The temptation to get rich in a short time is great. This can leave investors perfectly on track with their portfolios as they fall for the siren song that is most likely to result in significant losses.
The siren song of speculation attracts even the brightest people
It’s hard to know that your friend, who knows little to nothing about investing, has been enriched by something like Dogecoin within weeks. The life changing returns from Dogecoin’s rally are unlikely to happen again. Unfortunately, many people who slip their ticket into what is known as an opportunity retrospectively (after the winnings have come in) are the ones most likely to hold the bag. These people are the bigger fools in the bigger fools game (the bigger fools theory has nothing to do with The Motley Fool).
Instead of speculating with your hard-earned money, try investing it for the long term. In times of commission-free trades and WallStreetBets, today’s definition of long-term is probably the shortest that has ever existed. Commission-free trades are important, but they can lead solid long-term investors on the path of day traders. And, as a rule, wealth is generated through long-term investments and not tipped into or out of stocks over the course of the day.
Forget speculation: investing for the long term is what you should strive for
In this article, we’re going to take a closer look at a long-term wealth builder CP Rail (TSX: CP) (NYSE: CP), which has seen a nearly 5% retreat from its recent trade war with Canada’s leading rail competitor CN Rail, which has the best deal – currently valued at around $ 33 billion.
CP Rail is not a Dogecoin. It won’t enrich you in a matter of days or weeks, but it will help you build a nest egg at an above-average rate over the next 20, 30, or 40 years. For an investor, that’s really all you can ask of an investment. Steady capital gains and a generous dividend growth policy are what you get from the name. Most importantly, like bitcoin and anything else capable of it, it never loses much of its value while you sleep.
CP Rail chugs on
While CN Rail is perceived as a leader in tracking lunch by CP Rail (Kansas City South), I think CP Rail will have the edge at the end of the day. Why? CP Rail will not have to deal with the same amount of regulatory paperwork that CN Rail may have to deal with. The current offering from CN is expected to be subject to stricter rules.
These days, investors on both sides are demanding that CN Rail simply drop its offer. And I think that’s exactly what CN Rail will do as the pressure is mounting from all sides. If that means CP Rail cancels its original deal (or at least a deal that is below CN Rail’s offering), CP stock could go up.
When weighing risk and reward, CP Rail is a solid investment that blows cryptocurrencies straight out of the water.
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This article represents the opinion of the author who may disagree with the “official” endorsement position of a Motley Fool Premium Service or Distributor. We are colorful! Questioning an investment thesis – including one of our own – helps us all think critically about investing and make decisions that will help us get smarter, happier, and richer. As a result, we sometimes publish articles that may not match recommendations, rankings, or other content.
Fool player Joey Frenette owns shares in the Canadian National Railway. David Gardner owns shares in Canadian National Railway and Tesla. Tom Gardner owns shares of Tesla. The Motley Fool owns and recommends shares in Canadian National Railway and Tesla. The Motley Fool recommends the Canadian National Railway.
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