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Speculation is often associated with a gamble with a zero (or sometimes negative) expected return (exp....

Speculation is often associated with a gamble with a zero (or sometimes negative) expected return (exp. gambling on sports, speculating on future exchange rates, or commodity prices). Investing on the other hand is associated with a transaction with an expected positive return (invest in stock market). Why would people speculate?

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People speculate in hope of higher capital appreciation than Investing. More so, it is the risk appetite of the individual: for those who are risk-averse, they make to choose transaction with a small but postive return, while risk-loving people might still chose to invest in a stock of which they have little or no knowledge, but anticipation of outperformance.

Although, investing is also a kind of speculation: you know nothing about the future price of stocks you buy, or the dividends they may yield. Since these gains are discretionary, stocks in a way can be called speculative too.

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