Prediction involves guessing what will happen in a text based on clues, while inference uses clues to draw conclusions about characters and events that may or may not be confirmed. When predicting, the reader focuses on what will occur, but when inferring the reader considers how characters feel and their motivations. Both prediction and inference require questioning oneself before and during reading, but inference allows for more open-ended questions. The document provides guidance on when and how to make predictions and inferences to improve reading comprehension.