What is an Investment ?
An investment is an asset or item that is purchased with the hope that it will generate income or will appreciate in future. In an economic sense an investment is the purchase of goods that are not consumed today but are used in future to create wealth. In finance an investment is monetary asset purchased with the idea that the asset will provide income in future or will be sold at a higher price for a profit.
HOW IT WORKS :
Investments can be stocks, bonds, mutual funds, interest-bearing accounts, lands, derivatives, art work, old comic books, jewellery - anything an investor believes will produce income (usually in the form of interests or rents) or become worth more.
WHY IT MATTERS :
The safety of the principal is of concern in any investment, although some investors are more risk tolerant than others and are thus more willing to lose some of their principal in return for the chance of generating a higher profit. The investor's ability to tolerate risk and the incremental return associated with the increasing amounts of risk are two primary factors that distinguish types of investments from one another and help determine appropriate investments for a given investor.
Have a Happy Investing !!!
An investment is an asset or item that is purchased with the hope that it will generate income or will appreciate in future. In an economic sense an investment is the purchase of goods that are not consumed today but are used in future to create wealth. In finance an investment is monetary asset purchased with the idea that the asset will provide income in future or will be sold at a higher price for a profit.
HOW IT WORKS :
Investments can be stocks, bonds, mutual funds, interest-bearing accounts, lands, derivatives, art work, old comic books, jewellery - anything an investor believes will produce income (usually in the form of interests or rents) or become worth more.
WHY IT MATTERS :
The safety of the principal is of concern in any investment, although some investors are more risk tolerant than others and are thus more willing to lose some of their principal in return for the chance of generating a higher profit. The investor's ability to tolerate risk and the incremental return associated with the increasing amounts of risk are two primary factors that distinguish types of investments from one another and help determine appropriate investments for a given investor.
Have a Happy Investing !!!
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