<a href="http://tradinghubonline.com/blog/wp-content/uploads/2015/08/32648048_s.jpg"><img class="wp-image-511 alignleft" src="http://tradinghubonline.com/blog/wp-content/uploads/2015/08/32648048_s-300x193.jpg" alt="32648048_s" width="202" height="130" /></a>Your approach to the market will be different for speculation than for hedging or investing.

For an investment, a physical product as a commodity (corn, gold, oil etc.), a share (equity, stock) or property are bought with the expectation that as prices rise profit will be made. There is normally no gearing (leverage) of the product. You will expect to make perhaps 10% to 20% per year. Risk potential is quite low. Warren Buffett’s (seen by many investors as the most successful investor of the 20th century) return on investment for the past 40 years is on average about 18% per year. Usually a "Buy and Hold" approach.

<u>For investment you need a lot of capital.</u>
Investments in shares and especially property are long-term investments (years). Income is usually as dividends, capital appreciation and interest or rental income.

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