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 ...
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.
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.
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Pension fund switch to decentralized management right way to go, landmark study finds
Dec 15, 2009 |
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As pension funds have grown and become increasingly complex many have turned to using multiple, often pricier specialist managers to steer their investment decisions.
Taiwan chip giant TSMC to enter solar energy
Dec 10, 2009 |
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Chip giant Taiwan Semiconductor Manufacturing Co. is planning its first foray into solar energy with an investment in the island's largest producer of solar cells, a spokesman said Thursday.
Study shows health care spending spurs economic growth
Dec 14, 2009 |
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As the national discussion of health care focuses on costs, a new study from North Carolina State University shows that it might be more accurate to think of health care spending as an investment that can spur economic growth. ...
Playing favorites: Parents still involved after children are grown
Other Sciences / Social Sciences
Dec 07, 2009 |
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(PhysOrg.com) -- Middle-aged parents are more involved in their grown children's lives than ever, according to new research from Purdue University.
Birth order affects cooperation in later life
Medicine & Health / Psychology & Psychiatry
Dec 09, 2009 |
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(PhysOrg.com) -- A new scientific study has found that at least some of the stereotypes associated with older siblings are true: the oldest sibling is often less trusting, less cooperative, and less reciprocating ...
Tech investing will be a tougher play in 2010
Dec 17, 2009 |
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(AP) -- Mutual funds that bet exclusively on technology stocks are the star performers of 2009.
Energy efficiency technologies offer major savings
Dec 09, 2009 |
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Energy efficiency technologies that exist today or that are likely to be developed in the near future could save considerable money as well as energy, says a new report from the National Research Council. Fully adopting ...
EBay official: Employees shared Craigslist data
Dec 10, 2009 |
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(AP) -- Employees of Internet auction site eBay shared confidential information gained from Craigslist with other employees developing eBay's own online classifieds business, an eBay executive said Wednesday.
Elpida Completes Development of 65nm XS Version 1-Gigabit DDR3 SDRAM
Dec 17, 2009 |
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Elpida Memory, Japan's leading global supplier of Dynamic Random Access Memory (DRAM), today announced that it had completed development of a 65nm XS extra-shrink version 1-Gigabit DDR3 SDRAM that is as cost-competitive as ...
Taiwan plans massive growth in solar energy
Dec 04, 2009 |
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Taiwan plans to boost its use of solar panels by a factor of 200 over the next decade and a half in an effort to increase clean energy, a ranking official said Friday.
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