Source: Wikipedia
Investment has different meanings in finance and economics.
In economics, investment is the accumulation of newly produced
physical entities, such as factories, machinery, houses, and goods
inventories.
In finance, investment is putting money into an asset with the expectation of capital appreciation, dividends, and/or interest
earnings. This may or may not be backed by research and analysis. Most
or all forms of investment involve some form of risk, such as investment
in equities, property, and even fixed interest securities which are
subject, among other things, to inflation risk. It is indispensable for project investors to identify and manage the risks related to the investment.
To invest is to allocate money (or sometimes another resource, such as time) in the expectation of some benefit in the future.
In finance, the benefit from investment is called a return. The return may consist of capital gain or investment income, including dividends, interest, rental income etc., or a combination of the two. The projected economic return is the appropriately discounted value of the future returns. The historic return comprises the actual capital gain (or loss) or income (or both) over a period of time.
Investment generally results in acquiring an asset, also called an investment. If the asset is available at a price worth investing, it is normally expected either to generate income, or to appreciate in value, so that it can be sold at a higher price (or both).
Investors generally expect higher returns from riskier investments. Financial assets range from low-risk, low-return investments, such as high-grade government bonds, to those with higher risk and higher expected commensurate reward, such as emerging markets stock investments.
Investors, particularly novices, are often advised to adopt an investment strategy and diversify their portfolio. Diversification has the statistical effect of reducing overall risk. Read more...
In finance, the benefit from investment is called a return. The return may consist of capital gain or investment income, including dividends, interest, rental income etc., or a combination of the two. The projected economic return is the appropriately discounted value of the future returns. The historic return comprises the actual capital gain (or loss) or income (or both) over a period of time.
Investment generally results in acquiring an asset, also called an investment. If the asset is available at a price worth investing, it is normally expected either to generate income, or to appreciate in value, so that it can be sold at a higher price (or both).
Investors generally expect higher returns from riskier investments. Financial assets range from low-risk, low-return investments, such as high-grade government bonds, to those with higher risk and higher expected commensurate reward, such as emerging markets stock investments.
Investors, particularly novices, are often advised to adopt an investment strategy and diversify their portfolio. Diversification has the statistical effect of reducing overall risk. Read more...
