The investment is purchased with the hope that it will generate current or future revenues.
In economic terms, the investment is the purchase of goods that are not currently consumed, but will be used in the future to enlarge the property. In financial terms, an investment is a monetary asset acquired on the assumption that an asset will provide income in the future or that at a later time it will be liquidated at a higher price than it was acquired, which will generate the expected profit. The term “investment” can be used for any mechanism used to generate future income, in the financial sense it includes the purchase of bonds, shares or real estate.In addition, a constructed building or other object used for the production of goods can also be seen as an investment. The production of goods needed to create others can also be seen as investing, and taking action in the hope of increasing future revenues can also be considered an investment, for example, when we decide to do additional education, the goal is to increase knowledge and improve skills in the hope that eventually we will achieve a better paid job.
Investments and economic growth
Economic growth can be supported by investments at the business level.
In case the company acquires new production equipment in order to increase the production of goods, this increased production may result in GDP growth. This allows economic development through investments in production.
The investment bank provides a range of services aimed at helping individuals or companies to increase their assets. Concentration on investment instruments takes place here.
Investments and speculations on the stock market?
Speculation is a separate activity from investments. Investing involves the purchase of assets with the intention of long-term retention, while speculation involves an attempt to use market shortages to achieve short-term profits. Investors often strive to increase the number of assets in their portfolios over time. Although speculators often make informed decisions, speculation can not usually be classified as a traditional investment. Speculation is generally considered to be a greater risk than traditional investment, although it all depends on the type of investment.