Learning about Investment & Speulcation

1. Investment Vs Speculation
M.Vadivel

11. Investment Vs Speculation
Basis Investment Speculation
Time Horizon Long term Investment like
Land & Building, Real Estate
etc.,
Short term – holding assets
from one day up to one year
(Day to day investments)
Risk Limited High
Source of Income Earnings of enterprise Change in market price
Stability of Income Very stable Uncertainty
Use of Funds Own of funds Own funds, borrowed funds
Type of contract Creditor Ownership
Psychological
attitude of
participants
Causations and Conservative Aggressive and daring

12. Points of
difference Investment Gambling
Planning
Horizon
Longer planning Horizon Short planning horizon
Basis for
decisions
Scientific analysis of Intrinsic worth of
the security.
Based on tips and rumors.
Nature Planned activity Unplanned activity
Risk Commercial Risk Artificial risk
Return
expectation
Risk-return trade off determines
return.
Negative returns are
expected .
Motive Safety of principal and stability of
returns .
Entertainment while
earning.

13. Thank You……