Investment (Financial)

Investment is the act of committing money or capital to an endeavor with the expectation of obtaining an additional income or profit. In finance, an investment is a monetary asset purchased with the idea that the asset will provide income in the future or appreciate and be sold at a higher price. Investments are divided into two main categories: direct and indirect investments. Direct investments involve the purchase of stocks, bonds, or other financial instruments. Indirect investments involve the purchase of mutual funds, exchange-traded funds, or other pooled investments.

History of Investment

The concept of investment has been around since ancient times. In the early days, people would invest in land, livestock, and other tangible assets. As the world became more industrialized, people began to invest in stocks, bonds, and other financial instruments. The modern concept of investment was developed in the late 19th century by economist John Maynard Keynes. Keynes argued that investment was essential for economic growth and that it should be encouraged by governments. Since then, investment has become an important part of the global economy.

Comparison of Investment Types

Summary

Investment is the act of committing money or capital to an endeavor with the expectation of obtaining an additional income or profit. There are two main types of investments: direct and indirect. Direct investments involve the purchase of stocks, bonds, or other financial instruments, while indirect investments involve the purchase of mutual funds, exchange-traded funds, or other pooled investments. The risk and potential return of each type of investment varies. For more information about investment, visit websites such as Investopedia, The Balance, and Morningstar.

See Also

• Stocks
• Bonds
• Mutual Funds
• Exchange-Traded Funds
• Portfolio Management
• Asset Allocation
• Risk Management
• Financial Planning
• Diversification
• Hedge Funds

Do you like the post? Share it now: