What is Investment ?

By Investor / Published on Saturday, 14 Jan 2017 09:29 AM

Investment can be generally defined as any time, effort or funds, spent on a particular thing with the hopes that it would be profitable in the future. Investments are however, more aptly defined, as goods which are purchased but not consumed immediately. These goods are bought with the anticipation that the goods will appreciate over time. Investment could include buying of houses, stocks, goods or machineries and factories.

For example, an individual can buy a plot of land in an area that has not been developed at a very cheap price as an investment. He then leaves the land until when the area is beginning to develop or fully developed which will in most cases result to an appreciation in the value of the land. He can now sell the land at a higher price or lend it out at a profitable price. This could apply to buying of house as well.

Investments could be divided into traditional or alternative investment. Examples of traditional investment include real estate, bonds, cash and equity shares amongst others. Examples of alternative investment include wine, stamps, antiques, art and precious metals amongst others.