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Examples of speculative investments These investments, while often popular, are also speculative in nature. Generally, you should be prepared to lose your entire investment if you put money into them.
A speculative investment -- or "when an investor hopes to profit from a rapid change in the value of an asset," according to SoFi -- can be fairly high risk, unlike traditional investments. Indeed,...
The view of what distinguishes investment from speculation and speculation from excessive speculation varies widely among pundits, legislators and academics. Some sources note that speculation is simply a higher-risk form of investment. Others define speculation more narrowly as positions not characterized as hedging. [3]
A recent example is the Troubled Asset Relief Program (TARP), signed into law by U.S. President George W. Bush on 3 October 2008 to provide a government bailout for many financial and non-financial institutions who speculated in high-risk financial instruments during the housing boom condemned by a 2005 story in The Economist titled "The ...
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The speculative or asset demand for money is the demand for highly liquid financial assets — domestic money or foreign currency — that is not dictated by real transactions such as trade or consumption expenditure. Speculative demand arises from the perception that money is optimally part of a portfolio of assets being held as investments.
Other speculative assets Speculative assets are high-risk, high-reward investments such as penny stocks or stocks of companies with little to no earnings. Penny stocks are small companies whose ...
In finance, a high-yield bond (non-investment-grade bond, speculative-grade bond, or junk bond) is a bond that is rated below investment grade by credit rating agencies. These bonds have a higher risk of default or other adverse credit events but offer higher yields than investment-grade bonds to compensate for the increased risk.