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
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, ...
New research helps predict stock market
Feb 20, 2009 |
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(PhysOrg.com) -- Researchers from Massey University have developed a new way to predict stock markets that has been recognised with an award from New Zealand finance specialists.
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.
Financial risk taking: Blame it on the genes
Feb 11, 2009 |
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Financial institutions continue to teeter on the brink of ruin. Banks are still devouring bailout money without loosening credit enough to make a difference in a recession that is sweeping the globe. And everyone keeps asking, ...
How much risk can you handle? Making better investment decisions
Aug 22, 2008 |
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Many Americans make investment decisions with their retirement funds. But they don't always make informed judgments. A new study in the Journal of Consumer Research introduces a new tool that investors can use to choose invest ...
Gender biases in leadership selection during competitions within and between groups
Medicine & Health / Psychology & Psychiatry
Oct 30, 2008 |
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What makes a great leader? Traits that we look for typically include a sense of power, great negotiating skills and lots of charisma. However, a recent study suggests that it is not just an outgoing personality and great ...
HP, Taiwan's Foxconn to build China plant: report
Aug 05, 2009 |
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US computer giant Hewlett-Packard Co. and Taiwan's Foxconn Group will jointly build a plant in China to make laptops and related equipment, a report said Wednesday.
Probing Question: How do Ponzi Schemes work?
Jul 02, 2009 |
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Imagine the shock, the horror, and the sheer panic that would come with learning that the financial plan you’d sunk your life savings into was a sham, the financial experts you trusted were crooks, and all your money was ...
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.
NJIT business prof says first-quarter bank profits will soon prove ephemeral
May 27, 2009 |
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NJIT finance professor Michael Ehrlich predicts that the strong profits reported by banks in the first quarter will soon be followed by more losses. Ehrlich, a market failure expert, notes that the unexpectedly ...
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.
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.
Google launches venture capital fund (Update)
Mar 31, 2009 |
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Google is searching for good ideas.
Offer puts value of at least $6.5B on Facebook
Jul 13, 2009 |
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(AP) -- How much is Facebook worth? A Russian investment firm appears to put it at $6.5 billion to $10 billion.
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.
