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What is the difference between speculating and investing?
I consider speculation to be a security purchase where the point is to sell it to someone for a higher price.  Day-trading is completely speculative. I consider Investment to be a purchase you make for its underlying value. You are buying it at that price because you believe the present value of the future payments is higher than the price you are paying. I may sell an investment if a higher price is offered than I think it's worth, or if the business situation changes, but I don't plan on it.   Hedging is a third type of security purchase, where you are decreasing your overall risk.  If you are a hog farmer, selling hog futures on the CME is hedging, because it locks in the amount you get per hog, regardless of what the price of hogs does. Commodities markets only have hedgers and speculators.  Investors don't make sense, it doesn't have an underlying value.