But let us start at the base, and know first what the term speculation.

The term is known to all trade or financial transactions aimed at obtaining an economic benefit, based on price fluctuations. A speculator does not seek to enjoy rather than buying, but profit from price fluctuations.

In this way a speculator is someone who buys goods or products at low prices while providing an increase in demand, hoping that demand drives up prices, which managed to sell for a higher price than he bought at a profit. They are knowledgeable people who know the markets, fundamental thing to predict where there is a buying opportunity.

Now that we have relatively clear concepts, it is time to know three great speculations that the market collapsed.

1. First Great Speculation: The tulip fever

Between 1634 and 1637, years of prosperity in the Netherlands, there was an unprecedented demand for some tubers can produce some exceptional tulips. Within weeks, these tubers came to be worth a house. Prices rose as the market collapsed, and at any moment, the price of these tulips, dropped their real level, which was minimal compared to what was being paid, and many magnates were ruined.

2. Second Great Speculation: The South Seas

Another was the speculative momentum that occurred in the eighteenth century, and is known as the South Sea bubble. Many were those who invested in the British South Sea Company, thinking that his ships would return laden with treasures from overseas.

For this reason, the shares rose as they reached an exorbitant price and then fall to rock-bottom prices, on news the sad reality on boats did not arrive with the expected amount. One of those who suffered the setback of the speculation was Isaac Newton, the father of the theory of gravity.

3. Third Great Speculation: The great stock market crash

As it was called that occurred on Wall Street in October 1929 and has gone down in history as the Crash of 29.

Shares of General Motors and RCA multiplied its price. Speculators borrowed to keep buying, but the Dow Jones collapsed.

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Financial markets offer good opportunities for small investors to make big money speculating. But losing it, so keep in mind these risks.

1. Complexity

As financial engineering becomes more complex, more difficult it is to successfully navigate the small investor. Products and markets are not designed for retailers and, in any case require a large degree of knowledge. Otherwise, you can go wrong, very wrong.

2. Illiquid

Financial derivatives are characterized by low liquidity. You can not buy and sell with ease and immediacy that allows the bag and there is serious risk of being caught.

3. Leverage

More sophisticated financial products allow a strong leverage. That is, we buy a lot, but paying only a part, this is the leverage effect: moving a lot with little force. Yes, the losses are real.

4. Counterfeit currency

The currency market is one that has a higher level of risk. It is the favorite habitat of large speculators. To invest in a foreign currency must know very well the reality of the country and the risk of collapse.

5. Volatility

These financial products bear a high degree of volatility, i.e. swings and fluctuations that raise or lower prices so crazy. It is very difficult to keep calm and not get dizzy when the sea is churning.

The forecasted equity markets still unstable for a period of not less than six or nine months. Weak economies focuses on the household demand and consumption locked, the lack of liquidity in the government joined the unemployment and default rates, would put even with weak economies in growth indicators.

Investment funds in equities continue to be risky for small capital, get away from the volatility if your capital investment is small.

We focus therefore in guaranteed investment funds, secure their capital, diversified to maximize benefits and minimize risks with a high percentage of fixed income, national or international and do not necessarily state.

Thus, a proposal for investment funds for the moment, contemplate secured investments from 1970 to 1930 and emerging market equities.