Write the difference between investment and speculations.

Banking & FinanceManagementCompanies/Organisations

The major differences between investment and speculations are as follows −

Investment

  • Purchasing an asset/security for good returns is termed as an investment.

  • It is long term and has moderate risk.

  • Investors will go for the cautions and conservative approach.

  • The decision is made on financial performance of a company.

  • The returns are modest and continuous.

  • It is used for self.

  • Examples &minnus; stock markets, bonds, mutual funds etc.

Speculations

  • A risky financial transaction for high profits is termed as speculation.

  • It is short term (less than a year).

  • An investor will go for an aggressive approach.

  • The decision is made on technical charts, market psychology and individual decisions.

  • It excepts return at high rate.

  • It is used for borrowed funds.

  • Examples − foreign currencies, cryptocurrencies.

raja
Published on 25-Jul-2020 10:52:40
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