Difference Between Investment And Speculation

Investment: It is a purchase of assets with the expectation of regular return.

Speculation: it is a financial transaction with an expectation of capital gain or substantial profit.

Investment: It is a long term planning (at least one year or more).

Speculation: It is a short term plan (only for few months).

Investment: It involves only modest risk.

Speculation: It involves higher level of risk.

Investment: It expects for a modest rate of return because of moderate risk.

Speculation: Due to higher level of risk involved, it expects higher rate of return.

Investment: Investor’s own funds and property is used.

Speculation: Generally borrowings from others are used.

Investment: Income is certain and stable in investment.

Speculation: Income is uncertain and unstable in speculation.

Investment: Investor possess caring and cautious behavior.

Speculation: Speculator possess careless and daring behavior.