Difference Between Investment & Speculation

Here is the difference between investment and speculation in terms of stock market.

Investment:

Investment is like planting a tree. When you invest, you’re putting your money into something with the hope that it will grow and provide benefits in the future. You carefully choose in which stocks you invest based on its potential to increase in value over time.

Investments usually have a solid foundation and are backed by thorough research and analysis. The investor aim is to make money over the long term. They do not expect huge money in short term as the scalpers do.

Speculation:

Speculation is like betting. When you speculate, you’re taking a chance on something with the hope of making a huge profit in short time.

Speculative decisions are often based on short-term market movements, rumors, or a gut feeling on any particular stock movement. Speculators mostly depend on short-term price changes.

In simple terms, investing is a long-term strategy where you carefully choose what you put your money into, while speculation is a shorter-term gamble based on guesses or feelings about what might happen in the market.