Investors take their money and put it into something they hope to profit from. Profit could be in the form of dividends, capital gains or interest. They invest in bonds, stocks, commodity futures or any security they feel has the least risk and highest yield. Many investors buy and hold their assets for years.
Speculating is a investment in hope of gains that is far more risky. Many of their investments do not pay dividends. They analyze the risk and if they feel assured money can be made, they will invest. Most speculators risk their own money, so to reduce the risk they may form a hedge that will help protect their capital. Many day traders will invest in a stock and own it a few seconds or just a few minutes while other speculators will invest in a commodity that may take some time to grow.
If you invest, you are a speculator. You make sure you are investing your money in a way that will be profitable. After all, the objective is to increase your earnings.
With Gold surpassing Fifteen Hundred Dollars for a Troy ounce, there are people who are speculating the price will keep growing. And with the US Dollar devaluating and a possibility of interest rates rising, I can see why they would think that way. But many investors don't have enough money to invest in such a high priced commodity. So many are turning to another alternative, Silver. Since Silver is trading at about Forty US Dollars a Troy ounce now, that is more attractive to the average investor. But, there are others that are speculating that someday the price will come down and do not want to put their money there at all. Who's right? Who knows. One thing for sure is we will eventually find out.
Most of the speculating today was, "What will Ben Bernanke say in his address on Wednesday, April 27, 2011?" We will go over that on Wednesday evening.
Investment Soloist
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