What are the key differences in behaviour that help define the distinction between speculators and investors? What do your behaviours say about you? Speculation has been defined as the assumption of risk in anticipation of gain. Compared to investing, it tends to be associated with higher risks and achieving quicker and larger gains. It generally involves a “bottom up” approach that treats each risk as separate and distinct. It includes elements of stock selection, market timing and forecasting. Investment, on the other hand, employs a “top down” approach that avoids focus on the separate risks and short term outcomes in favour of a focus on the characteristics of the whole portfolio.