4. Continue…
Element of sacrifice = As soon as a person makes a commitment of some money
value either in buying shares, piece of land, plant, etc., it entails an element of
sacrificing current consumption of money value.
Element of futurity = Every investment is made with the aim of holding it for a
certain time period. Few investor hold it for a few days, whereas other hold it for
certain months or years.
Risk = since every investment activity has an element of futurity and the future is
always uncertain, it include the risk factor.
Expectation of gains = no investment is done for charity. The element of sacrifice of
the current utility of money value , futurity and the risk monetary loss put together,
makes the basis for expecting gains from the invested money.
6. Pure Investment
Carefully thought of
Well-planned
Based on the study of fundamental about investment avenues
Meant for long-time horizon
Low risk
Expected returns commensurate with the risk assumed
7. Speculation
Meant comparatively for a shorter duration
Based on market-related information
An act in which an investor has an attitude to take risk as compared to risk aversion
A positive attitude toward losses, in case of adverse happenings
Ready to book loss
8. Gambling
It like batting for an uncertain outcome. In gambling ,
the investor is always ready to take risk high degree of
risk and at it. He creates a situation leading to risk and
then assumes the risk so created. A gambling always
expects higher gains in a very short time horizon due to
the high degree of risk assumed.
