Wednesday, July 15, 2009

Investment vs Speculation


Investing is an act of faith, a willingness to postpone present pleasures to save for the future. Investing for long term is the core to the achievement of optimum returns for the investor.

Speculation on the other hand is trading for capital appreciation on the value of a stock listed on the stock market. ie when people buy stocks in the belief that the prices will go up and they will be able to make a profit, it is known as Speculation.

Investing in stocks with strong fundamentals helps you improve your Cash flow where as Speculation helps in capital appreciation.

Investing is reliable and sustainable over the long run. where as speculating is dangerous and risky