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Hi, I'd just like give a small intro before the video itself actually starts.

Welcome to this Alencho video on the difference between speculation and investment.

I would say amongst the general public there is a large degree of confusion or

misunderstanding between these two terms.

We see headlines in the business press, for example, referring to things like investors today sold off dramatically, or

investors today snapped up this share, or investors today dumped that share.

I would say that probably most of those are, in fact, speculators.

So, on with the video. Enjoy!

People say that investing in shares is not investing, it's simply speculating.

Well some people do invest in shares, or (rather) speculate in shares

But I wanted to spend today, a little bit, talking about the difference between investing and speculating.

Now, speculating is when you buy something, and then sell it immediately, or perhaps in the short term,

in order to make money from the fact that you have sold it.

So, it is the buying and the selling that the speculator does, in order to make her money.

The investor, on the other hand, buys an asset, and then holds onto it, and that in itself earns the investor a cash flow.

So, a very simple example: if you buy an apartment and you buy it in order to sell it, then you are speculator.

So you buy an apartment for a hundred thousand, you sell it six months later for 120,000, or 150,000 if you very lucky

then you'll make a profit on the sale of the asset, and that is your intention.

If that is your intention then you are a speculator.

If, on the other hand, you buy the flat in order to hold it and rent it out to other people,

and you then therefore derive an income, or a cash flow, by virtue of holding the asset, then you are an investor.

Now, similarly, we can treat shares as a speculator, or you can treat shares as an investor.

So, if you treat shares as a speculator then

you will buy shares in order to sell, at a later date to some other guy who you hope will pay a higher price than you paid for the share.

Nothing wrong with that, it's a different philosophy, a different mindset.

If you buy shares as an investor, then you are buying shares to hold them,

to keep the cash flow, which means dividends or internal cash flow which the company is deriving

and then using for further growth which means more revenue and more profits later.

Either way, you will hold on to that share, because you're interested in the cash flow in the future coming to you.

So that's the difference between an investor mindset and a speculator mindset.

For more infomation >> Investing vs Speculating - What's the difference? - Duration: 3:02.

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KPAX Year in Review: Arlee boys make a difference while winning big - Duration: 1:21.

For more infomation >> KPAX Year in Review: Arlee boys make a difference while winning big - Duration: 1:21.

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Luke Shaw explains the difference between Solskjaer and Mourinho - Duration: 2:51.

 Luke Shaw has praised Ole Gunnar Solskjaer for reinstating "attacking, quick play" at Manchester United

 The Norwegian replaced Jose Mourinho earlier this month as he took over at Old Trafford until the end of the season, and he's won his first two matches in charge at Cardiff and at home to Huddersfield

 Solskjaer's side take on Bournemouth at home on Sunday, and left-back Shaw - who infamously felt Mourinho's wrath on several occasions during the Portuguese's time in charge - says the former United striker knows exactly what the club's fans want

  "I think you can see from the outside how much he has changed things in such a short space of time," Shaw told Sky Sports

 "He is just a really positive manager, he knows what the club needs and also what the fans want in the way we are playing

 "He's bringing that attacking, quick play back to Old Trafford. I'm sure the fans are going to appreciate that as much as we [the players] do

"  Although the dismissal of Mourinho was largely expected following United's below-par start to the season which has left them 19 points off top spot, the appointment of Solskjaer as interim boss was a surprise

 And Shaw says he had no clue that it was happening.  "The truth? My girlfriend told me," he said

 "I woke up in the morning and had a shower and she ran out of the room and told me

 "I did not have a clue, I didn't look at my phone or anything. That's how I found out

from my girlfriend."