Investing vs Speculating
Investing is different from speculation, as speculation is generally considered to be targeting higher returns from your contributions, within a shorter period of time.
So, speculation may be considered as a form of a very high risk investment, within a short time horizon.
"In finance, speculation is also the practice of engaging in risky financial transactions in an attempt to profit from short term fluctuations in the market value of a tradable financial instrument—rather than attempting to profit from the underlying financial attributes embodied in the instrument, such as, value addition, return on investment, or dividends."(Wikipedia).
Investments are generally long term in nature and the returns are commensurate with the undertaken risk. When trying to build wealth or outperform an index, you need the right tools to find your winning investment and the process starts by speaking to a financial professional and obtaining the correct advice.
Investing vs Saving
Investing is sometimes confused with saving. An investment is different from saving, as an investment is a more active way of deploying your wealth, while saving is generally understood as a passive and safe way of storing part of your income without worrying about where you are deploying your surplus funds.
The purchasing power of savings will erode over time through inflation, whilst an investment should show you a profit percentage, which is over and above your banks interest rate, when added to your countries rate of inflation.
For more information, please contact me. I will be happy to help with whatever questions you may have. Rob. E: robert.gourlay@holbornassets.com T: (+6) 01151565649 W: www.rgwealthsolutions.com
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