It's vital to know the difference between speculation and investing! If you don't, you could make some very bad decisions and lose a lot of money.
Speculation is generally a high risk form of investing. It's done over a very short period of time, ranging anywhere from 1 day on the low end to 6 to 12 months on the high end.
From 2004 to 2006, investors speculated by buying pre-construction properties in Florida, Las Vegas and Phoenix. They'd put properties under contract with builders in these markets, then immediately offer them for sale once the builder finished construction six to twelve months later.
Some investors were fortunate and turned over some nice profits from the appreciation. However, many more were left holding the bag when the market softened and flipping for profit became nearly impossible.
