IndiaP2P Blog

Responsible content on personal finance & economics that makes you smarter about money.

Are you an investor or a speculator?


Blog Image

Like most trends, in the beginning, it's driven by fundamentals, at some point speculation takes over.
What the wise man does in the beginning, the fool does in the end."
Warren Buffett

Almost every other ad across television and social media is encouraging us to invest. We see and hear celebrities and experts tell us that we must not miss the bus and put money in stocks, crypto, mutual funds, etc. They also tell us that it is safe and good to do so - often implying that we can make high returns in little time.

The sense of urgency in these ads compels us to try. If that isn’t enough, then often there is an incentive such as cashback, freebies etc. to start transacting. 

As a result, more Indians are beginning to invest every day. Smartphones and the internet have also made investing fast and convenient. And, while more information on investing is available to us, many of us only skim it. We are more likely to seek out recommendations than to spend time understanding their basis. This means that we are taking on more risk than we know. So, essentially, looking to make high returns quickly at risk levels which while we do not understand.
And while we may think of ourselves as investors – we may actually be speculators. 
Let’s understand the difference:
The level of risk is the main difference between investing and speculating. While investing requires digesting data and evidence to to understand the underlying assets risks and return potential often seeking assets that are relatively low risk and often lower return in the short term. Speculation, on the other hand means putting your money in assets or trades that are expected to deliver high returns in short to medium-term; this expectation of high return comes with high risk too.

Professional speculators understand this high-risk high-return scenario and use advanced risk management tools while also preparing for high losses.

Many of us are attracted to quick, high returns but we never consider that this makes us speculators.
Putting money in the hottest new crypto or a stock tip for a new/unknown company are more obvious instances of speculation but even with more credible assets, we often invest for quick gains without understanding the risks a.k.a. speculation.
While investing and speculating are both means of making money, it is important to recognize what path one is taking.

At IndiaP2P, our endeavour is to create a new, technology-first financial institution that lives by the values of transparency & efficiency, delivering financial products that bring you wealth and prosperity. We believe that India deserves investment products that enable true economic value without speculation.


Author: Neha Juneja

Other Blogs

Is P2P lending safe in india?



What is P2P lending? Peer-to-peer (P2P) lending has emerged as a viable alternative to traditional banking services in India. This financial model enables borrowers and lenders to connect with each other directly, without the intervention of a financial institution. P2P lending platforms offer investors higher returns than traditional investments, such as fixed deposits, while also providing borrowers with flexible repayment terms and lower interest rates. However, like any other investment, P2P lending comes with risks that investors must be aware of to protect their investments. Top risks associated with P2P lending in India are as follows: Platform Risk: The platform risk is the risk of the P2P lending platform defaulting, either due to a shutdown or bankruptcy. This risk can result in investors losing their investments. To protect oneself from platform risk, it is crucial to choose a reputable P2P lending platform with a good track record. Credit Risk: Credit risk is the...


Making Wise Investment Decisions in India: CAPEX vs OPEX



Making Wise Investment Decisions in India: CAPEX vs OPEX   When it comes to making investments in India, the decision you make between Capital Expenditure (CAPEX) and Operating Expenditure (OPEX) can have a huge impact on your returns. Knowing the difference between these two investment strategies and how they are used is essential for anyone looking to make smart decisions about investing their hard-earned money. Let’s take a closer look at CAPEX vs OPEX in India and explore which option may be best for your unique needs. What Is CAPEX? CAPEX is an investment that involves long-term purchases made by businesses or investors. These purchases are typically large assets such as real estate or equipment, which must be paid off over time. In addition to purchasing the asset upfront, there are often additional costs associated with CAPEX investments such as maintenance fees, insurance costs, and taxes.   What Is OPEX? OPEX is an investment strategy that involves...


Maximizing Your Savings: The Ultimate Guide for Salaried Individuals in 2023



Maximizing Your Savings: The Ultimate Guide for Salaried Individuals in 2023 Are you tired of living paycheck to paycheck? Do you wish you had more savings in the bank but don't know where to start? Look no further! The Ultimate Guide for Salaried Individuals in 2023 is here to help. In this comprehensive and easy-to-follow guide, we will show you how to maximize your savings and take control of your finances. From budgeting tips to investment strategies, we'll cover everything you need to know about saving money in today's economy.  Let's dive in and start building your financial future today! Introduction to Personal Finances There is no one-size-fits-all answer when it comes to maximizing your savings as a salaried individual. However, there are certain best practices that can help you make the most of your hard-earned money. One of the key things to remember is to start saving early. The sooner you begin setting aside money, the more time it has to grow through compound...


Have more questions? Click here to schedule a quick call with our investments team


Start Investing