How To Guide For: Understanding The Difference Between Investment And Speculation

An investment is the commitment of money or capital to purchase financial instruments or other assets in order to gain profitable returns in the form of interest, income, or appreciation of the value of the instrument. An investment is related to saving or deferring consumption. An investment involves the choice by an individual or an organization after some analysis, to place or lend money in a vehicle, instrument or asset, such as property, commodity, stock, bond, financial derivatives such as futures or options, or the foreign asset denominated in foreign currency, that has a certain level of risk and provides the possibility of generating returns over a period of time. Speculation is the purchase of an asset such as a commodity, goods, or real estate with the hope that it will become more valuable at a future date. Speculation is also the practice of engaging in risky financial transactions in an attempt to profit from short term fluctuations in the market value of a tradable financial instrument, rather than attempting to profit from the underlying financial attributes embodied in the instrument such as capital gains, dividends, or interest. This is just the general explanation of investment and speculation to get more in depth information on investment and speculation click on the pictures below to read the articles.