Speculative motive

Speculative motive

A desire to hold cash in order to be poised to exploit any attractive investment opportunity requiring a cash expenditure that might arise.

Speculative Motive

A strategy in which one holds cash apart from any other investments just in case an attractive investment opportunity arises. This allows the investor to take advantage of the opportunity without closing any other positions.
References in periodicals archive ?
Transactional motive: for daily spending such as buying groceries, preparing daily meal; precautionary motive: in case of emergencies such as accident, health issues, and speculative motive mostly in fixed deposit either for miscellaneous or the children's future endeavour and exploits.
Liquidity preference depends on the demand for money in Keynes's general theory in three motives: the transactions motive, the precautionary motive and the speculative motive. Because the nature of currency substitution is the rise of foreign currency demand and the decline of the demand of local currency, the reason for the change of foreign currency demand is the same as the reason of money demand.
This is the Achilles heel of the DSGE model: in the DSGE model, households purchase capital goods only for the utility they provide, whereas in the economy people at times make purchases out of a speculative motive. The fact that housing is generally purchased largely with borrowed money and that the amount of credit provided for home mortgages can vary greatly compounds the problem and adds to the instability of the housing market.
Kaynes [5] suggests that there are three incentives for reserve cash holdings including transaction motive, precautionary motive and speculative motive. The transaction motive is the main reason of cash holding [6].
And, as housing prices rose rapidly in some areas of the country, a speculative motive for home buying took root and grew, encouraged by cheaper methods of financing.
Keynes's Liquidity Preference Theory asserts that there are three motives for holding money--1) a transactions motive 2) a precautionary motive and 3) a speculative motive.
The speculative motive should not be affected by the introduction of the credit card.
This was directly or indirectly financed out of money held for the speculative motive. If the investment was financed by funds already held as money, the speculative holdings were directly reduced.
institutions, this conversion of funds held for the speculative motive to funds held for the transactions motive would be accomplished by transferring funds from time deposits to checking deposits (and to a certain extent to currency and coin).
199] "the amount held to satisfy the speculative motive."
-The third reason (the speculative motive) allows the relationship between money demand and interest rates to be explored.
Speculative motives. For traders, the absolute value of interest rates makes little (if any) difference, as they can earn money as long as there are buyers and sellers and the bid-ask spread is not too narrow.