Speculation Theory

Speculative Theory suggests that financial markets and economic decisions are heavily influenced by investors' expectations about future events rather than just current information or intrinsic values. People buy and sell assets based on what they think will happen—like future profits or government policies—leading to price movements driven more by hope or fear than actual fundamentals. This can cause rapid swings or bubbles in markets, as collective anticipation shapes prices beyond what the underlying assets are truly worth. In essence, speculation reflects beliefs and predictions about the future, shaping market dynamics as much as tangible data.