Investing vs Speculation, Are you Gambling or Investing? 🎲

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Save to protect your money.
Invest to grow your money.
Speculate to gamble your money.

Are you Gambling or Investing?

Investing vs Speculation; what's the difference? They are very much the same thing but there are also some distinct differences.

Investing - is productive projects - like growth or expansion; maybe you're investing in a new factory or new machinery or investing in a business startup. i.e. money being put to work to gain a return. Investing wise you often don't know what your return is until its crystallised.

Speculation more akin to gambling. You might not really care why the price will go up, you just want to buy low and sell high or buy high and sell higher. Cryptos are very much akin to speculation. Speculation is usually shorter-term; involving more often than not buying and selling something that can be bought and sold relatively easily.

Investment
- Fundamental factors for making decisions
- Long term commitment

Speculation
- Hearsay, technical charts and market psychology for making decisions
- Short term phenomenon

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[leshghett]

Speculation is often criticized, while Investing is often viewed as being "better". But it's important that we understand that in order for anyone to make any money in the market, regardless of whether or not they're Speculating/Investing, The Market must move. Movement occurs primarily due to speculation, and Speculators take a lot of risk in trying to get direction right/arbitraging, and are not always rewarded for doing so.

People will also criticize trading as well, due to their view that it doesn't provide any overall benefit for society, as many usual jobs tend to do. This is, to some extent, true. But I think it's an incomplete picture. The Market will take in anyone, there's no CV or work experience required, very low barriers to entry. This is both bad and good. Bad because it results in an extremely high failure rate of Market Participants. Good because if you're disciplined, observant, organized, and willing to learn from mistakes, you will increase your chances of success in the long run. Trading is an interesting way to apply yourself that I don't think any other occupation can offer, and it's incredibly unfair to just refer to it as "Gambling", like many people do.

[edwardlewis]

In terms of shares also referred to as stock:

One thing a person might want to invest their money in a land, but imagine land for sale only $1 per square foot; unfortunately you can't buy 1 square foot;

You might want to own a company but you don't have enough money to buy the whole company - hence shares.
You might be able to buy shares in a company at $1 per share. More practical than trying to buy 1 square foot of land.

Not at the end of each year, the company declares a profit, and shareholders such as yourself are entitled to a dividend based on the profit.

There are different types of stock.
One type of stock in non-dividend stock.
Such stock is bought and sold by traders on the stock market who speculate on the stock price.

[IainMcGirr]

Hmm so trading crypto is speculation... whereas trading other commodities futures contracts and stocks ..WDB or warrant or options is not...RIGHT

[iscariotmadeo]

Sooo, in speculation if I bought some stocks then the value rises after a couple of months, I could just sell it right away?

[jaja]

Speculation to me is money I can afford to lose just like gambling. I have been ultra successful on speculation but I mostly buy off speculation that the stock will rise over the next year, I have many speculation buys that I have held for years because it continues to increase and it could crash 50%+ and I still make a lot of money off initial investment. Check laws coming down the road, what the SC is making judgements on, if you live in a tourist town pay attention to new trends the kids are wearing, keep an eye on Amazon best sellers and notice when new products fly up the charts.

[codyrap]

So buying crypto is speculating but buying a company that is dependent on crypto isn't? If crypto fails for some reason, wouldn't the company fail too? Wouldn't that be almost the same thing?

[IainMcGirr]

Obviously trade it don't date it ...does not apply to other assets..