The difference between speculation and investing.

The difference between speculation and investing is one that could be argued with all depending on your point of view. Any thing that you might purchase in the view that you will sell in the future to make a profit could be considered speculation. Any thing that you perches and intend to keep fro a long time and that will increase in value is investing.

Now that sound very easy and simple to just look at it like this but in reality they are both the same thing. No matter how long you are going to hold the thing that you perches it could go up in value and it could go down. Some things like government bonds are pretty solid but even they can fluctuate all depending on the market.

And that is the thing that you have to think of before you invest in any thing, what is the market doing. And how do you feel about what you are doing. If you have no idea about either then you probably are better not investing or speculating as you might lose all your money.

If you are going to speculate you want to make a lot of money in a sort time. For this you need to know what is going on in the, market and be in touch with the market. This takes a lot of work you need to study market trend try and predict what is going to go up and also what is going to come down. It is a very intense and difficult thing to do. And if you do decide that you could try and do any thing like this then you have to realize that you will get it wrong and that will cost you money. So be prepared for loss as well as gain. And also in this you need what could be called that gut feeling that will make or break what you do.

To invest you are doing the same but with a much more long term goal in site. The fluctuation of a bull and a bare market are not your concern as much. For if you are looking to invest in some thing you must take the view that what you are going to do will bring long term rewards over time. You do not want the next big thing or the allure of jumping on the band wagon and hopping you get off at the right time before the crash. You want to know that what you invest in is going to be there in ten or twenty year's time. The hope is, and in the long term it often is, that your investment will gather momentum and build. You will get interest or dividends over time and weather the storms of the market.

As strategies go it is up to you to decide what you are going to do. And for all the success of the people who have made massif profits speculating. There are also those who have lost as well. But hoes hoe invest and do not look at the every day up and down but think in the long term have often fared a lot better.

In the end it is about risk. If you can risk to fail, and know that if you do you will be comfortable in doing so then speculate. If you are risking your whole life savings and do not know if it will pay off can not sleep and wish for every last minute it would just stop then invest for the long term.

As for advice in either, only risk what you can afford to lose, do not borrow to invest or speculate and do your research.