Investment
Investment is the act of committing money or capital to an endeavor with the expectation of obtaining an additional income or profit. Investment is a term with multiple meanings in finance and economics. In finance, it is the purchase of a financial product or other item of value with an expectation of favorable future returns. In economics, it is the production of goods or services that are not consumed today but are used in the future to create wealth. Investment has different meanings depending on context, but it is generally considered to involve the commitment of money or capital to purchase financial instruments or other assets in order to gain profitable returns in the form of income, interest, or appreciation of the value of the instrument.
History of Investment
The concept of investment has been around for centuries. The earliest recorded investments date back to ancient Mesopotamia, where people invested in livestock and agricultural products. In the Middle Ages, people invested in land and other tangible assets. In the modern era, investment has become more sophisticated, with the emergence of stocks, bonds, mutual funds, and other financial instruments. Investment has become an important part of the global economy, with individuals, corporations, and governments all investing in various assets in order to generate income and wealth.
Comparison of Investment Types
| Type of Investment | Risk Level | Potential Return |
|---|---|---|
| Stocks | High | High |
| Bonds | Low | Low |
| Mutual Funds | Medium | Medium |
| Real Estate | High | High |
Summary
Investment is the act of committing money or capital to an endeavor with the expectation of obtaining an additional income or profit. Investment has different meanings depending on context, but it is generally considered to involve the commitment of money or capital to purchase financial instruments or other assets in order to gain profitable returns in the form of income, interest, or appreciation of the value of the instrument. Different types of investments carry different levels of risk and potential return. For more information about investment, visit websites such as Investopedia, The Balance, and the U.S. Securities and Exchange Commission.
See Also
- Stocks
- Bonds
- Mutual Funds
- Real Estate
- Portfolio Management
- Asset Allocation
- Diversification
- Risk Management
- Financial Planning
- Financial Markets
