Speculation, Stock Speculation, or Investment

  Speculation is the act of conducting financial transactions based on guessing or profit. The perpetrators of speculation are called speculators.

People who speculate focus on fluctuations or changes in haga to gain above average. The investment risk is very high, because it is only based on rumors or news that is not necessarily the truth.

Speculation, Stock Speculation, or Investment

That way, the risk of failure is huge. This is why speculation is often equated with gambling.

Because, full of uncertainty because it only relies on luck fate. This can pose great risks and even harm to others.

Examples of Speculation

An example of speculation trading, is a gold mining company that is rumored to have found a new gold 'field'. Without an official statement from the company, an investor focused on long-term investments would not buy shares of the company.

But for speculators it is direct speculation. They suspect the company will dig a gold mine, so it will improve the performance, profit, and share price of the company. From this assumption, speculators will buy their shares.   

Or another example of speculation, namely buying foreign currency with the intention to be sold again at a higher price as a form of 'resistance' of foreign currency buyers whose purpose is to pay for foreign imports and investment.   

Stock Speculation

Speculation can occur in stock investments, forex investments, bond investments, and property investments. In stock investing, speculation from speculators often occurs.

Stock speculation is a stock that traders use to speculate. Stock fundamentals or sustainable business models are not considered important.

They buy a stock because they are interested in its higher volatility and low price than the leading stock. Assuming speculators can make bigger profits or can be a windfall, although the risk is also high.

Often stock speculation occurs in stocks of the mining, energy, technology, and biotechnology sectors, especially companies that have not yet or recently developed.

Even so, blue chip stocks or established companies can be dogged by speculation when it is in difficult conditions or future prospects deteriorate rapidly.

Difference between Speculation and Investment

Speculation and investment are different. Speculation is the activity of risking money with an approximate assumption. Without considering the real conditions that are actually happening.

Investment is the activity of investing in an instrument while taking into account risk and aiming to obtain profits. Investing uses logic, especially doing analysis before making a decision.

Like a stock investment. Requires fundamental analysis and technical analysis, so that risk can be minimized and profits generated to the maximum.

Investments can be made in stock instruments, bonds, mutual funds, gold, deposits, peer to peer lending, and others. Investors expect to pocket profits in the form of interest payments or coupons, capital gains, dividends periodically.

Investments are usually long-term. At least one year has assets.

Tips to Avoid Speculation in Investing

Speculation will always overshadow your pace in investing. However, you can avoid it in the following ways:

1. Make careful investment planning, including calculating all risks that are likely to occur. Determine the target of buying and selling before trading, so that once speculation arises, you do not participate.

2. Continue to learn to hone knowledge and insights about the investment instruments you choose, deepening the science of analysis to avoid speculation.

Do you want to be a speculator or investor?

Being a speculator with the weapon of speculation or an investor is an option. Which one do you want?

Speculation is the same as gharar. Gambling is thus forbidden in Islamic teachings. Regardless, the behavior of speculation is very detrimental to yourself as well as others.

Come on, be a smart investor in order to invest in a good and correct way without speculation.