Write the difference between investment and speculations.
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.
Published on 25-Jul-2020 10:52:40
