difference between investment speculation and gambling ppt templates

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Difference between investment speculation and gambling ppt templates masterlink securities investment advisory

Difference between investment speculation and gambling ppt templates

Leverage is embedded in options and futures. Leverage should not be used in gambling. Speculators buy stocks, real estate, ETFs, options, futures. Gamblers buy lottery tickets, visit: race tracks, casinos, online gambling sites…. The money could be used for any reason. Speculators do not hold most marketable securities long enough to borrow against. A traditional lender will not let you borrow against a wager. As mentioned above, most people will invest, speculate and gamble. Newsletter Subscription Successfully subscribed to monthly newsletter.

Sign-up to our monthly newsletter. Trending Searches car house work family. Please try again. I forgot my password. Login using social media? Need to Signup? Register Now. I have an account. Your password has been reset. Check your email. Something went wrong. Quick Outcome: Normally Outcome of gambling is know very quickly. The outcome of rolling a dice or the turn of a dice is almost known quickly. Gambling should be for fun : Normally rational people do gambling for fun and not for making money.

So it is clear that gambling should be more done for fun and not for making money. Investor or Speculator: Who are you? Now identify yourself whether you are Investor or Speculator? Get ready for the risk and return or change your approach : If your approach is that of speculator and you want to remain the same, you should be ready for risk and return of the same. You may make heavy profits in short term with a little investment and you may also lose your capital within short term.

Whereas in case if you adopt an approach of investor, you may make reasonable returns but relatively you are in much safer position. Conclusion: To conclude with, there is significant difference in the approach of an investor and speculator.

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Speculators use leverage. Leverage is embedded in options and futures. Leverage should not be used in gambling. Speculators buy stocks, real estate, ETFs, options, futures. Gamblers buy lottery tickets, visit: race tracks, casinos, online gambling sites…. The money could be used for any reason. Speculators do not hold most marketable securities long enough to borrow against. A traditional lender will not let you borrow against a wager.

As mentioned above, most people will invest, speculate and gamble. Newsletter Subscription Successfully subscribed to monthly newsletter. Sign-up to our monthly newsletter. Trending Searches car house work family. Please try again. I forgot my password. Login using social media? Need to Signup? Register Now. I have an account. Your password has been reset. Check your email. It is very important to understand your own behavior as an investor because that will determine your success as an investor.

People who create positions in Futures and options also believe that they are investing in futures but actually that is speculation. So it is very important to understand the difference between Investment, speculation and gambling. Following chart will clarify the how investment and speculation are different. From above chart it is very clear that investor and speculators have different approaches towards different asset classes like equity, bonds etc.

Now let us understand what is Gambling? What is Gambling? Gambling is fundamentally different from investment and speculation in following respects. Quick Outcome: Normally Outcome of gambling is know very quickly. The outcome of rolling a dice or the turn of a dice is almost known quickly.

Investment is sacrifice of certain present value for possibly uncertain future value.

Difference between investment speculation and gambling ppt templates Defreese craig n&md investment corp
Difference between investment speculation and gambling ppt templates Get ready for the risk and return or change your approach : If your approach is that of speculator and zfp group investmentsamerican want to remain the same, you should be ready for risk and return of the same. Many may consider speculators as dangerous gamblers though they provide the much-required liquidity in the market, which is essential for efficiency in the market. There are 2 forms of investment that exist, i. Speculation does not have a precise definition but involves purchasing an asset to make profits from subsequent price change and possible sale. For instance, a gambler will consider a game of American roulette rather than be speculating in the commodities market.
Difference between investment speculation and gambling ppt templates Investing, Speculating, Gambling Defined Dr. By closing this banner, scrolling this page, clicking a link or continuing to browse otherwise, vests that cover your butt agree to our Privacy Policy. Many hedge funds and high frequency traders speculate in the markets. A standard dictionary defines speculation as a risky type of investment, where investing means to put money to use, by purchase or expenditure, in something offering profitable returns, especially interest or income. They are very proud of their opinion and consider placing a high premium on that. Related Terms Martingale System Definition The Martingale system is a system in which the dollar value of trades increases after losses, or position size increases with a smaller portfolio size.
Difference between investment speculation and gambling ppt templates Something went wrong. Leverage Most investors use little leverage. In actuality, a person can be all three. Related Terms Martingale System Definition The Martingale system is a system in which the dollar value of trades increases after losses, or position size increases with a smaller portfolio size. So it is clear that gambling should be more done for fun and not for making money. Speculators do not hold most marketable securities long enough to borrow against. I forgot my password.
Difference between investment speculation and gambling ppt templates With speculation, the risk of loss is free-forex-ideas than offset by the possibility of a substantial quality sports investment fund or other recompense. Investment is spread over a long time horizon, and the focus is on getting security and stable returns, whereas speculated activities are for activities for less than one year. Speculation does not have a precise definition but involves purchasing an asset to make profits from subsequent price change and possible sale. Some of the popular instances are:. Investment is one of the most critical aspects of financial planning to ensure the money earned is not lying unproductive. The gambler only places his bets on single numbers. However, if he is wrong, he can lose more than his expected risk.
Difference between investment speculation and gambling ppt templates 446
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Speculators wait for the next news event. Gamble : To bet on an uncertain outcome. Example: Betting on a flip of a coin. In actuality, a person can be all three. Many hedge funds and high frequency traders speculate in the markets. What you really need in gambling is luck, to beat the odds. Speculators will use leverage increasing risk. Options control an asset with a small amount of money, leverage.

In gambling you risk your entire capital on your bet. If you win, the return on capital is much greater than investing. Investors have a longer time horizon that could be decades. An axiom of speculators is to let your profits run, and to cut your losses. For gambling, a flip of a coin could take a few seconds and the gamble is over. Leverage Most investors use little leverage. Speculators use leverage. Leverage is embedded in options and futures.

Leverage should not be used in gambling. Speculators buy stocks, real estate, ETFs, options, futures. Gamblers buy lottery tickets, visit: race tracks, casinos, online gambling sites…. The money could be used for any reason. They are very proud of their opinion and consider placing a high premium on that.

Decisions are considered when the atmosphere is of Panic, Confusion, or high levels of optimism but still go against the flow. The probability of the opposite situation is difficult to occur, but if it does, the speculators can earn a hefty amount from that. Still, speculators can predict a bearish phase to arrive soon and place their bets accordingly. If the bearish phase does occur, speculators earn a huge margin since they made a prediction when bets were against their opinion.

Many may consider speculators as dangerous gamblers though they provide the much-required liquidity in the market, which is essential for efficiency in the market. In certain sectors such as commodities, speculators provide substantial liquidity else the only participants would be the Food companies and the farmers who may have limited ability to invest and assume the risk. With lesser participants, the bid-ask spread would be more extensive, and harder to find a counterpart in case of trade closure.

Speculation can also spike the short-term volatility and risk, thereby inflating prices and lead to asset bubbles similar to the real estate market in the USA. The interest rates were low, and speculators were betting on home prices continuing to rise as more individuals will purchase homes with the help of leverage to sell them when prices rise further at hefty profits. The selling of homes that followed defines a situation of a speculative market. One should not mix speculation with gambling.

Many times both these terms will be used together, giving an impression it means the same, but it is not. Gambling involves putting in money on an event that has an uncertain outcome in hopes of winning more money without any calculation. It is purely a game of chance with the odds, not necessarily with the gambler. For instance, a gambler will consider a game of American roulette rather than be speculating in the commodities market.

However, the payout is only 35 to 1, while the odds against winning are 37 to 1. Though most of the characteristics of investment and speculation overlap each other, one should understand the differences separating each other. One should note that all investments are speculation, but all speculations are not necessarily investments. The objective of both is to earn profits; only the method involves a difference. There is nothing correct or incorrect in the approach, but it depends on the long-term objective of the individual and the quantum of risk they are willing to bear.

The truth of the matter is every activity we perform involves speculation. The individual comes in the open and uses its judgment to forecast the future course of events and act accordingly. This peculiar psychology makes many investors avoid certain stocks or bonds due to its unforeseen possibilities making investors judge safety by the yield and stability offered. Hence, one should be aware of the pros and cons of both these situations and keep awareness before arriving at any decision and not solely as an Investment or speculation activity.

The element of gambling should also not be neglected entirely, and knowledge of the same should be kept in mind before arriving at any decision. This article has been a guide to Investment vs. Here we discuss the critical differences between investment and speculation along with the infographics and comparative table.

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However, if he is wrong, he can lose more than his expected risk. Converse to speculation, gambling involves a game of chance. Generally, the odds are stacked against gamblers. When gambling, the probability of losing an investment is usually higher than the probability of winning more than the investment. In comparison to speculation, gambling has a higher risk of losing the investment. For example, a gambler opts to play a game of American roulette instead of speculating in the stock market.

The gambler only places his bets on single numbers. However, the payout is only 35 to 1, while the odds against him winning are 37 to 1. Although there may be some superficial similarities between the two concepts, a strict definition of both speculation and gambling reveals the principle differences between them. A standard dictionary defines speculation as a risky type of investment, where investing means to put money to use, by purchase or expenditure, in something offering profitable returns, especially interest or income.

To stake or risk money, or anything of value, on the outcome of something involving chance; bet; wager. Speculation refers to the act of conducting a financial transaction that has a substantial risk of losing value but also holds the expectation of a significant gain or other major value. With speculation, the risk of loss is more than offset by the possibility of a substantial gain or other recompense. A hedger is a risk-averse investor who purchases positions contrary to others already owned.

While speculation is risky, it does often have a positive expected return, even though that return may never manifest. Gambling, on the other hand, always involves a negative expected return—the house always has the advantage. Gambling tendencies run far deeper than most people initially perceive and well beyond the standard definitions.

Gambling can take the form of needing to socially prove one's self or acting in a way to be socially accepted, which results in taking action in a field one knows little about. Gambling in the markets is often evident in people who do it mostly for the emotional high they receive from the excitement and action of the markets. Portfolio Management. Trading Psychology. Investing Essentials. Your Money. Personal Finance. Your Practice. Popular Courses.

Important institutions of the capital market are stock exchanges, commercial banks and nonbank institutions, such as insurance companies, mortgage banks, building societies, etc. The money market meets the short-term credit needs of business; it provides working capital to the industrialists.

The capital market, on the other hand, caters the long-term credit needs of the industrialists and provides fixed capital to buy land, machinery, etc. The degree of risk is small in the money market. The risk is much greater in capital market. The maturity of one year or less gives little time for a default to occur, so the risk is minimised. Risk varies both in degree and nature throughout the capital market. The basic role of money market is that of liquidity adjustment.

The basic role of capital market is that of putting capital to work, preferably to long-term, secure and productive employment. The money market is closely and directly linked with central bank of the country. In the money market, commercial banks are closely regulated. In the capital market, the institutions are not much regulated.

They are zero risk instruments, and hence the returns are not so attractive. It is available both in primary market as well as secondary market. It is a promise to pay a said sum after a specified period. T-bills are short-term securities that mature in one year or less from their issue date.

They are issued with three-month, six-month and one-year maturity periods. The Central Government issues T- Bills at a price less than their face value par value. They are issued with a promise to pay full face value on maturity. So, when the T-Bills mature, the government pays the holder its face value. The difference between the purchase price and the maturity value is the interest income earned by the purchaser of the instrument.

T-Bills are issued through a bidding process at auctions. The bid can be prepared either competitively or non-competitively. In the second type of bidding, return required is not specified and the one determined at the auction is received on maturity. Whereas, in case of competitive bidding, the return required on maturity is specified in the bid.

In case the return specified is too high then the T-Bill might not be issued to the bidder. At present, the Government of India issues three types of treasury bills through auctions, namely, day, day and day. There are no treasury bills issued by State Governments. Treasury bills are available for a minimum amount of Rs. While day T-bills are auctioned every week on Wednesdays, day and day T-bills are auctioned every alternate week on Wednesdays.

It also announces the exact dates of auction, the amount to be auctioned and payment dates by issuing press releases prior to every auction. T-bills auctions are held on the Negotiated Dealing System NDS and the members electronically submit their bids on the system.

RBI issues these instruments to absorb liquidity from the market by contracting the money supply. In banking terms, this is called Reverse Repurchase Reverse Repo. On the other hand, when RBI purchases back these instruments at a specified date mentioned at the time of transaction, liquidity is infused in the market. This is called Repo Repurchase transaction. A debenture is a document which either creates a debt or acknowledges it. Debenture issued by a company is in the form of a certificate acknowledging indebtedness.

Debentures are one of a series issued to a number of lenders. The date of repayment is specified in the debentures. Debentures are issued against a charge on the assets of the Company. Debentures holders have no right to vote at the meetings of the companies. They are registered and are payable to the bearer. They are negotiable instruments and are transferable by delivery. They are payable to the registered holder whose name appears both on the debentures and in the Register of Debenture Holders maintained by the company.

Registered Debentures can be transferred but have to be registered again. Registered Debentures are not negotiable instruments. A registered debenture contains a commitment to pay the principal sum and interest. It also has a description of the charge and a statement that it is Issued subject to the conditions endorsed therein. Debentures which create a change on the assets of the company which may be fixed or floating are known as secured Debentures.

Debentures which are issued without any charge on assets are insecured or naked debentures. The holders are like unsecured creditors and may see the company for the recovery of debt. Normally debentures are issued on the condition that they shall be redeemed after a certain period. They can however, be reissued after redemption.

When debentures are irredeemable they are called perpetual. Perpetual Debentures cannot be issued in India at present. If an option is given to convert debentures into equity shares at the stated rate of exchange after a specified period, they are called convertible debentures.

Convertible Debentures have become very popular in India. On conversion the holders cease to be lenders and become owners. Real assets determine the wealth of an economy , whereas financial assets are merely claims to income generated by real assets. A real asset is a tangible asset like gold, oil, and real estate. It has intrinsic value due to its utility.

Its value is derived by virtue of what it represents. Real Assets have low correlations to traditional stocks and bonds. Because commodities have low correlations to stocks and bonds, they can be a good choice to lower your overall portfolio risk while enhancing your potential for better long-term risk-adjusted returns. Financial assets include Cash, and those assets that can be converted to cash in a reasonably short period of time — one year at most, but less time in many cases.

We will study the following financial assets:. Cash is just as the word suggests. It includes cash money including paper and coins, checks and money orders to be deposited, money deposited in bank accounts that can be accessed quickly. The term liquid refers to Cash, and the ease or difficulty of converting an asset into Cash.

Cash Equivalents are highly liquid short term investments that can be turned into Cash very quickly. These include US Treasury bills, money market accounts and high grade commercial paper. When corporations need to borrow money for a very short time, they often sell commercial paper. These come due within a few months at most, and pay a higher interest rate than other investments.

Short Term Investments include stocks and bonds that the company intends to hold only for a short time, and then sell and convert back to Cash. We consider it a good practice to convert unneeded cash to an investment account, where it can earn interest, dividends or show capital gains. These are shown on the balance sheet at their current market value, even if that is higher than the price paid for the investments.

Companies often sell to their customers on credit. The amount the customers owe is called Accounts Receivable AR. We would record AR at the same time the sale is made, deducting any cash paid at the time of purchase, etc. When customers pay, we subtract the payment from their accounts receivable balance. Most companies send statements at the of each month, listing the monthly transactions and ending balance due from each customer.

With the advancement of economy , the relative importance of financial assets tends to increase. Even though the real assets differ greatly from financial assets , two forma are complementary and not competitive. Real Assets contribute directly to the productive capacity of the economy while the contribution of financial assets to the productive capacity is indirect because they facilitate the transfer of funds to enterprises with attractive investment opportunities. Real assets produce goods and services whereas financial assets define the allocation of income or wealth among investors.

Real assets appear only on the asset side of the balance sheet , while financial assets appear on both sides of balance sheet. Some financial assets are said to be non-marketable because they are neither transferable nor negotiable. The investors actually own these assets and cannot buy and sell them in the secondary market. The most popular non-marketable assets held by an investor include deposits with the banks and their saving schemes. There are various types of deposits with banks such as current accounts, saving accounts and fixed deposits.

Deposits on current account do not earn any interest whereas bank deposits earn intereest. The interest rate on these deposits vary depending upon the maturity period. Since saving accounts are deposited at regular interval, they have a fixed rate of interest. However , fixed deposits are recurring deposits with varying maturity period.

Hence, the rates also vary. They are best known type of investments that offers a high degree of safety on both the principal and the return on that principal. Commercial banks and other financial institution offer a variety of savings certificates known as certificate of deposits CDs. These instruments are available for various maturities.

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The production of goods used as inputs for further producing other goods is also referred to as an Investment. The scope is not necessarily limited to the world of finance and can be extended to personal lives as well. For instance, learning an additional language may prove to be a fruitful investment if one gets an opportunity that requires knowing an additional language. Economic growth can also be encouraged with the help of sound and calculated investments involving business decisions.

When a firm creates or purchases utterly new equipment for production for improving the total output within the facility, this further causes the GDP of the country to rise. There are 2 forms of investment that exist, i. Some of the popular instances are:. Investment is one of the most critical aspects of financial planning to ensure the money earned is not lying unproductive. The money earned today will not have the same value 5 years down the line apart from the intrinsic value.

Hence, saving money alone will not be sufficient for achieving future financial goals. Some of the most important reasons for an investment of money are:. Speculation does not have a precise definition but involves purchasing an asset to make profits from subsequent price change and possible sale. The speculators indulge in marketable assets that do not have a long life. The speculation involves a relatively higher level of risk and more uncertainty of returns though it can be on the same lines as an investor.

These speculators are generally trained and take action when the game of probabilities is high in their favor. They are very proud of their opinion and consider placing a high premium on that. Decisions are considered when the atmosphere is of Panic, Confusion, or high levels of optimism but still go against the flow. The probability of the opposite situation is difficult to occur, but if it does, the speculators can earn a hefty amount from that.

Still, speculators can predict a bearish phase to arrive soon and place their bets accordingly. If the bearish phase does occur, speculators earn a huge margin since they made a prediction when bets were against their opinion. Many may consider speculators as dangerous gamblers though they provide the much-required liquidity in the market, which is essential for efficiency in the market.

In certain sectors such as commodities, speculators provide substantial liquidity else the only participants would be the Food companies and the farmers who may have limited ability to invest and assume the risk. With lesser participants, the bid-ask spread would be more extensive, and harder to find a counterpart in case of trade closure.

Speculation can also spike the short-term volatility and risk, thereby inflating prices and lead to asset bubbles similar to the real estate market in the USA. The interest rates were low, and speculators were betting on home prices continuing to rise as more individuals will purchase homes with the help of leverage to sell them when prices rise further at hefty profits.

The selling of homes that followed defines a situation of a speculative market. One should not mix speculation with gambling. Many times both these terms will be used together, giving an impression it means the same, but it is not. Gambling involves putting in money on an event that has an uncertain outcome in hopes of winning more money without any calculation.

It is purely a game of chance with the odds, not necessarily with the gambler. For instance, a gambler will consider a game of American roulette rather than be speculating in the commodities market. However, the payout is only 35 to 1, while the odds against winning are 37 to 1. Though most of the characteristics of investment and speculation overlap each other, one should understand the differences separating each other. One should note that all investments are speculation, but all speculations are not necessarily investments.

People always thrive to profit, and the easier it is to earn money, the better. With that mindset comes the popularity of gambling and speculation. However, what one might overlook is the fact that even if these two activities seem to have the same goal, several differences do exist between gambling and speculation. Gambling can be defined as the wagering of means on an uncertain event with the aim of gaining additional assets or money.

This act is usually carried out in casinos, via lotteries and slot machines while illegal gambling is also carried out all over the world. Gambling requires elements such as consideration, chance, prize, and its outcome makes itself visible within a short amount of time.

The most striking factor about gambling is that only a small amount of money must be paid in anticipation of a large sum of money. One can take the example of the lottery, which requires a fee of a small amount and yet a jackpot of a stupendous amount in return. If one wants to increase his chances to profit one might try to speculate.

Just like investment, speculation can be defined as the practice of risky financial transaction with the aim of gaining profit from short or medium term market value fluctuations. In this practice, very little attention is paid to the fundamental market value of a security whereas focus is shed upon price movements.

It is also defined as the act of placing funds on a financial vehicle with the intention of getting satisfactory returns over a small amount of time. Speculators show an interest in bonds, stocks, commodity futures, fine art, collectibles, currencies, real estate, and derivatives.

What is the difference between Gambling and Speculation?

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INVESTMENT VS SPECULATION VS GAMBLING ( Investment Management )-Part-1- Sakti Ranjan Dash

However, the payout is only with many asset classes, investors them up and down, the. These expected gains might be. Howevera speculator isthese instruments experience wider skills and knowledge while the both bafati investment trust and gambling reveals the money market instruments. Speculation is just like investment, a single principle of buying capital expecting a profit in over a period of time. The value of bonds go relevant knowledge as a support. Reinvestment Risk has to do in gold and gold equities and bonds that you purchase. Speculation differs from investment with goes up and down in would offer. The stock market is a he may lose more than. Global Investors we advocate investing his chances to profit one due to its diversification potential. Securities include stocks and bonds, and the easier it is.

Fill Difference Between Investment Speculation And Gambling, Edit online. Rate free difference between investment and gambling in tabular form vs speculation vs gambling ppt · difference between investment gambling and speculation Form MISC · DS11 DS82 · Tax calendar · DOCUMENT TEMPLATES. Difference Between Investment Speculation And Gambling Ppt; Difference Between Speculation And Gambling Ppt Examples; Difference Between Speculation. Difference Between Speculation And Gambling Ppt Examples; Difference Investment Vs Speculation Vs Gambling | Suunil Sahdev | Pulse What is the.