The most important difference between investment and speculation is that in investment the decisions are taken on the basis of fundamental analysis, i. Sometimes it may run riot and end in disaster, but that is due to its abuse. The difference between saving, investing, and speculating. Every successful investor must begin by understanding the difference between saving, investing, and speculating. Speculation and investment are very similar to each other and carry a similar target of making profits. Investment vs speculation top 7 differences you must know. Insider trading analysis not possible based on insider trading transaction happen5. Stability of income very stable uncertain and erratic6. Sources of income earning of enterprises change in market price7. The word investment can be defined as an activity that commits funds in any physical assets or financial assets with an expectation of receiving returns in the future. Length of commitment long run for a short time period presented by. If you get those confused, you run the risk of losing a lot of money. The difference between investing and speculating while investing relies on reason and methodology, speculating resembles gambling, and can even put your financial future at risk. Investment is when a security or an asset is purchased with an intention of holding it for a long term period with a view that it will gradually increase in value over that period and speculation can be considered a more risk based transaction where the sole purpose is to make profit out of that transaction which is generally a short term and.
Investment vs speculation basis investment speculation4. Difference between investment and speculation with. Investment requires an investor to do some work before hand and decisions are made based on known facts and figure. In this article, we will find out what are the basic differences between investment and speculation in a detailed manner. However, these two concepts differ from each other mainly by the level of risk tolerance. The difference between investing and speculating the. Speculation is purely based on the hope that the future price will be higher rather than on anything tangible. Highrisk speculation is typically akin to gambling, whereas lowerrisk investing uses a basis of. Difference between investment and speculation compare. What is the difference between speculation and investment. The several differences between speculation and investment which have the doubtful merits of public support, may be summarised as under. Differences between investment and speculation good. The primary difference between investing and speculating is the amount of risk undertaken. From the foregoing discussion it follows that speculation needs no defence.