Investment
hideInvestment or investing is a term with several closely-related meanings in business management, finance and economics, related to saving or deferring consumption. Investing is the active redirection of resources: from being consumed today, to creating benefits in the future; the use of assets to earn income or profit.
An investment is a choice by an individual or an organisation such as a pension fund, after at least some careful analysis or thought, to place or lend money in a vehicle (e.g. property, stock securities, bonds) that has sufficiently low risk and provides the possibility of generating returns over a period of time. Placing or lending money in a vehicle that risks the loss of the principal sum or that has not been thoroughly analyzed is, by definition speculation, not investment.
In the case of investment, rather than store the good produced or its money equivalent, the investor chooses to use that good either to create a durable consumer or producer good, or to lend the original saved good to another in exchange for either interest or a share of the profits.
In the first case, the individual creates durable consumer goods, hoping the services from the good will make his life better. In the second, the individual becomes an entrepreneur using the resource to produce goods and services for others in the hope of a profitable sale. The third case describes a lender, and the fourth describes an investor in a share of the business.
In each case, the consumer obtains a durable asset or investment, and accounts for that asset by recording an equivalent liability. As time passes, and both prices and interest rates change, the value of the asset and liability also change.
An asset is usually purchased, or equivalently a deposit is made in a bank, in hopes of getting a future return or interest from it. The word originates in the Latin "vestis", meaning garment, and refers to the act of putting things (money or other claims to resources) into others' pockets. See Invest. The basic meaning of the term being an asset held to have some recurring or capital gains. It is an asset that is expected to give returns without any work on the asset per se.
For more information about Investment, read the full article at
Wikipedia.
This text uses material from Wikipedia and is available under the GNU Free Documentation License.
News tagged with investment
Financial instruments could be spiked with unfindable risks
Dec 21, 2009 |
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(PhysOrg.com) -- In a result that may have implications for financial regulation, researchers from computer science and economics have revealed potentially impenetrable problems with the pricing of financial ...
Banks and bailouts: Playing politics?
Dec 21, 2009 |
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(PhysOrg.com) -- Banks with strong political connections were more likely to receive bailout money from the government—and more of it—in the past year than those with weaker ties, say University of Michigan researchers.
World Bank musters $5.5 billion for solar projects
Dec 09, 2009 |
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The World Bank announced Wednesday 5.5 billion dollars would be invested in solar energy projects in five countries of the Middle East and North Africa in a bid to combat climate change.
EBay completes sale of Skype for $2 billion
Nov 20, 2009 |
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(AP) -- EBay has completed its sale of Skype for about $2 billion to an investor group that included the founders of the Internet phone service.
Study: Credit crisis, debt load a double whammy for investment
Nov 09, 2009 |
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Firms with heavy long-term debt that came due amid the nation's recent credit crisis slashed investment more than three times as much as companies whose paybacks ducked the meltdown, a new University of Illinois study found.
Venture-capital investments down 33 pct in 3Q
Oct 20, 2009 |
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(AP) -- Venture capitalists' investments in U.S. startups rose in the third quarter when compared with the first two quarters of the year, suggesting increased confidence in the economy. When compared with the year-ago period, ...
Entrepreneurs face venture capital funding drought
Oct 13, 2009 |
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The number of US venture capital firms that raised new investment money sank to a 15-year low in the last fiscal quarter as a drought of funding threatened innovation around the world.
Is Wall Street warming to Yahoo's Microsoft pact?
Oct 07, 2009 |
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When Yahoo Inc. unveiled the details of its anticipated search and advertising partnership with Microsoft Corp. in late July, the reaction from Wall Street mostly ranged from skeptical to disappointed.
Twitter to raise $100 mln in new funding: WSJ
Sep 24, 2009 |
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Twitter is close to raising up to 100 million dollars in new funding in a deal which values the hot micro-blogging service at one billion dollars, The Wall Street Journal reported Thursday.
Insurance against financial fear
Sep 22, 2009 |
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(PhysOrg.com) -- Just one year ago, a worldwide panic was unfolding: Financial markets froze after the collapse of the investment bank Lehman Brothers, leaving businesses without lenders as the economy drastically ...
Uncertain climate regulations -- why corporations still invest
Sep 21, 2009 |
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Firms and corporations frequently need to take investment decisions without knowing if future regulation will support or threaten their investment. This is especially true in energy intensive industries that face high uncertainty ...
Brown economists measure GDP growth from outer space
Sep 04, 2009 |
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Outer space offers a new perspective for measuring economic growth, according to new research by three Brown University economists. In a National Bureau of Economic Research working paper, J. Vernon Henderson, ...
Icahn pares Yahoo stake with sale of 12.7M shares
Aug 31, 2009 |
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(AP) -- Financier Carl Icahn, one of Yahoo Inc.'s largest stockholders, has sold 12.7 million shares to whittle his holdings in the slumping Internet company down a percentage point to a 4.5 percent stake.
Fooled by your 'friends'
Other Sciences / Social Sciences
Aug 14, 2009 |
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Do not get too friendly with your investment adviser. It lowers your guard and increases your risk of being deceived, warn BI researchers Harald Biong and Kenneth H. Wathne.
Study: Financial windfalls hasten early retirement
Other Sciences / Social Sciences
Aug 13, 2009 |
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Older workers who get a jolt of cash out of the blue are more likely to cash in on early retirement, according to new research led by two University of Illinois finance professors.
