Page 10 - Introduction To Investment Management

Investment
Dividend Capital Gain
Return

Most people are actually involved with an investment throughout their life; we
will make savings to enable us to withdraw money in the near future or during

emergencies. We also may purchase property or land hoping in the future we can sell
them at a higher price. For those who are interested in the equity markets, they may

consider of buying shares that have the potential to grow, and will sell back after reaching
their target price. Others may consider of buying insurance or make a deposit in savings

account hoping that the money will grow and can be used after their retirement. Mention
above is some examples of good investment in real assets and financial assets.

1.3 INVESTMENT VS SPECULATION

If we make a comparison between investment and speculation, the main element

that distinguishes both of them is the exposure to risk and expected return on the sum of
investment. In the area of investment, the decision was based on a reasonable

assessment of risk to the accessibility and specific analysis which gives a reasonable profit.
This contrasts with the high-risk speculative activity which provide a high rate of return

which also expose to substantial loss. Speculation is also the practice of engaging in risky
financial transactions in an attempt to profit from short term fluctuations in the market

value. The speculators normally are not really interested in holding the assets; they just
wanted to make profit as we can see today in options and futures commodity markets. In

addition, speculation aimed at making a profit in the short term than the concept of a
long-term investment.

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