The correct behavior for the individual

The moral concern

Finance services offered to savers leave them the responsibility to operate in accordance with moral principles, avoiding speculative activities even if within the limits of the different laws. Individual speculators are not investors and in the moral context are considered socially useless and of damage for the common good.


Trading is not investment but it is speculation; it is important to be aware of this distinction "speculation indicates transactions that are made for the sole purpose of getting a profit from changes in prices . In the case of operations on stock, purchasing and selling of assets are made with the purpose to gain money on changes in prices as soon as possible without any interest to maintain the stock in view of future dividends.
(http://www.jstor.org/stable/2376347?seq=1#page_scan_tab_contents)


Negative behavior and the risk on the real economy

This practice is opposite to investment and represents a negative behavior for an individual in a religious context; it causes attachment to money and "the hope of becoming rich quickly and without the drudgery of labour distracts a man from pursuing the path of honest work".(*)

"it is morally impossible for a man who spends all or the greater part of his time speculating, to avoid all the dishonest practices of speculation".(**)

Speculation is also of potential significant damage to the real economy. 

Trading is a speculative practice


Conversely investment is carried out in the medium-long term perspective with the aim of obtaining a fair return through dividends without hazards on the expected returns on capital and avoiding a reprehensible attachment to money.



(*)      http://www.newadvent.org/cathen/14211a.htm
(**) International Journal of Ethics , John A. Ryan., Catholic University of America.

The correct behavior for the individual

To maintain an adequate personal profile:


  • have in mind a medium-long term horizon (generally over 1 year)
  • invest in ethical activities, (i.e. companies operating in socially useful business);
  • Avoid the study and the purchase of any financial instrument designed for the pursuit of short and very short-term profit;
  • avoid the pursuit of profit through short-term activities;
  • avoid the attachment to the idea of ​​making money;
  • avoid any offers (even though legally admitted) which allow speculative activities.
  • don't pay attention to daily prices indexes of the financial market because they are the basis for short term speculation and not investment.
  • remember that each individual speculative transaction in the financial market partipates to the speculative structure that is of potential  great damage to the real economy.



The attention should be focused on the above aspects which are of primary importance for a correct behavior from a moral-religious point of view regardless of any type of  personal utilitarian approach through trading that causes attachment to money and easily may promote further reprehensible behaviors. Also, any individual speculative transaction by means of trading increases potential significant damage to the common good.

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                               SPECULATION IS TO BE ABANDONED 

                   
                                           INDIVIDUALS MAY INVEST 
                                                 (no trading activities)
                                              LONG TERM HORIZON

       
Main points to avoid the moral problem of trading









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