investment

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For more information on investment, visit Britannica.com.

noun

A prolonged surrounding of an objective by hostile troops: beleaguerment, besiegement, blockade, siege. See attack/defend.

Definition: something given, lent for a return
Antonyms: divestment

The placement of a particular sum of money in business ventures, real estate, or securities of a permanent nature so that it will produce an income.

The purchase of property with the expectation that its value will increase over time.

An asset or item that is purchased with the hope that it will generate income or appreciate in the future. In an economic sense, an investment is the purchase of goods that are not consumed today but are used in the future to create wealth. In finance, an investment is a monetary asset purchased with the idea that the asset will provide income in the future or appreciate and be sold at a higher price.

Investopedia Says:
The building of a factory used to produce goods and the investment one makes by going to college or university are both examples of investments in the economic sense.

In the financial sense investments include the purchase of bonds, stocks or real estate property.

Be sure not to get 'making an investment' and 'speculating' confused. Investing usually involves the creation of wealth whereas speculating is often a zero-sum game; wealth is not created. Although speculators are often making informed decisions, speculation cannot usually be categorized as traditional investing.    

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Refers to the portion of a pot that you contributed, meaning that, should you win the pot, the rest is profit; how much it has cost you to stay in a pot.

SoundPoker Says: For example, if there are five people who have contributed equally to a particular pot, one fifth of that pot is your investment, while the other four-fifths is potential profit.

See Also: Equity, Implied Odds, Pot Odds, Value, Varience

Quotes:

"Never invest your money in anything that eats or needs repairing." - Billy Rose

"I do not regard a broker as a member of the human race." - Honore De Balzac

"Gambling with cards or dice or stocks is all one thing. It's getting money without giving an equivalent for it." - Henry Ward Beecher

"The social object of skilled investment should be to defeat the dark forces of time and ignorance which envelope our future." - John Maynard Keynes

"Sometimes your best investments are the ones you don't make." - Donald Trump

"Money itself isn't lost or made, it's simply transferred from one perception to another. This painting here. I bought it 10 years ago for 60 thousand dollars. I could sell it today for 600. The illusion has become real and the more real it becomes, the more desperately they want it." - Oliver Stone

See more famous quotes about Investments

The material used to enclose or surround a pattern of a dental restoration for casting or molding or to maintain the relations of metal parts during soldering.

• Corporations and Business Practices - investment: business expenditure made for eventual profit
• Banking and Financial Services - investment: outlay of money for income or profit
• Securities - investment: outlay of money for income or profit
• Spending, Receiving, and Possessing Wealth - investment: use of one’s existing capital to generate income or profit and thus increase wealth

For other uses, see Investment (disambiguation).

"Invest" redirects here. For the term in meteorology, see Invest (meteorology).

This article has multiple issues. Please help improve it or discuss these issues on the talk page. It needs additional citations for verification. Tagged since July 2011. Its introduction may need to be rewritten to comply with Wikipedia's lead section guidelines. Tagged since July 2011. Its neutrality is disputed. Tagged since July 2011.

Investment has different meanings in finance and economics. Finance investment is putting money into something with the expectation of gain, that upon thorough analysis, has a high degree of security for the principal amount, as well as security of return, within an expected period of time.^[1] In contrast putting money into something with an expectation of gain without thorough analysis, without security of principal, and without security of return is speculation or gambling. As such, those shareholders who fail to thoroughly analyze their stock purchases, such as owners of mutual funds, could well be called speculators. Indeed, given the efficient market hypothesis, which implies that a thorough analysis of stock data is irrational, all rational shareholders are, by definition, not investors, but speculators.

Investment is related to saving or deferring consumption. Investment is involved in many areas of the economy, such as business management and finance whether for households, firms, or governments.

To avoid speculation an investment must be either directly backed by the pledge of sufficient collateral or insured by sufficient assets pledged by a third party.^{[original research?]} A thoroughly analyzed loan of money backed by collateral with greater immediate value than the loan amount may be considered an investment. A financial instrument that is insured by the pledge of assets from a third party, such as a deposit in a financial institution insured by a government agency may be considered an investment. Examples of these agencies include, in the United States, the Securities Investor Protection Corporation, Federal Deposit Insurance Corporation, or National Credit Union Administration, or in Canada, the Canada Deposit Insurance Corporation.

Contents 1 In economics or macroeconomics 2 In finance 3 History 4 Linguistic significance 5 Real estate as the instrument of investment 5.1 Residential real estate 5.2 Commercial real estate 6 See also 7 Notes 8 External links

In economics or macroeconomics

In economic theory or in macroeconomics, investment is the amount purchased per unit time of goods which are not consumed but are to be used for future production (ie. capital). Examples include railroad or factory construction. Investment in human capital includes costs of additional schooling or on-the-job training. Inventory investment is the accumulation of goods inventories; it can be positive or negative, and it can be intended or unintended. In measures of national income and output, "gross investment" (represented by the variable I) is also a component of gross domestic product (GDP), given in the formula GDP = C + I + G + NX, where C is consumption, G is government spending, and NX is net exports. Thus investment is everything that remains of total expenditure after consumption, government spending, and net exports are subtracted (i.e. I = GDP − C − G − NX).

Non-residential fixed investment (such as new factories) and residential investment (new houses) combine with inventory investment to make up I. "Net investment" deducts depreciation from gross investment. Net fixed investment is the value of the net increase in the capital stock per year.

Fixed investment, as expenditure over a period of time ("per year"), is not capital. The time dimension of investment makes it a flow. By contrast, capital is a stock— that is, accumulated net investment to a point in time (such as December 31).

Investment is often modeled as a function of Income and Interest rates, given by the relation I = f(Y, r). An increase in income encourages higher investment, whereas a higher interest rate may discourage investment as it becomes more costly to borrow money. Even if a firm chooses to use its own funds in an investment, the interest rate represents an opportunity cost of investing those funds rather than lending out that amount of money for interest.^[2]

In finance

In finance, investment is the commitment of funds through collateralized lending, or making a deposit into a secured institution.

In contrast to investment; dollar cost averaging, market timing, and diversification are phrases associated with speculation.

Investments are often made indirectly through intermediaries, such as banks, credit unions, brokers, lenders, and insurance companies. Though their legal and procedural details differ, an intermediary generally makes an investment using money from many individuals, each of whom receives a claim on the intermediary.

History

The Code of Hammurabi 1700 B.C. provided a legal framework for investment establishing a means for the pledge of collateral by codifying debtor and creditor rights in regard to pledged land. Punishments for breaking financial obligations were not as severe as those for crimes involving injury or death.

In the early 1900s purchasers of stocks, bonds, and other securities were described in media, academia, and commerce as speculators. By the 1950s the term investment had been co-opted by financial brokers and their advertising agencies to promote speculation.

Linguistic significance

Common usage of "investment" to describe "speculation" has reduced investor capacity to discern investment from speculation, reduced investor awareness of risk associated with speculation, increased capital available to speculation, and decreased capital available to investment.

Real estate as the instrument of investment

In real estate, investment money is used to purchase property for the purpose of holding, reselling or leasing for income and there is an element of capital risk.

Residential real estate

Investment in residential real estate is the most common form of real estate investment measured by number of participants because it includes property purchased as a primary residence. In many cases the buyer does not have the full purchase price for a property and must engage a lender such as a bank, finance company or private lender. Different countries have their individual normal lending levels, but usually they will fall into the range of 70–90% of the purchase price. Against other types of real estate, residential real estate is the least risky.^{[citation needed]}

Commercial real estate

Commercial real estate consists of multifamily apartments, office buildings, retail space, hotels and motels, warehouses, and other commercial properties. Due to the higher risk of commercial real estate, loan-to-value ratios allowed by banks and other lenders are lower and often fall in the range of 50–70%.^{[citation needed]}

See also

• Asset
• Risk
• Alternative investments
• Diversifying investment
• Foreign direct investment
• List of countries by gross fixed investment as percentage of GDP
• List of economics topics
• Mortgage Investment Corporation
• Rate of return (ROR, a.k.a. ROI)
• Socially responsible investing
• Specialized investment fund

Notes

1. ^ Graham, Benjamin and David Dodd (1951). Security Analysis. McGraw–Hill Book Company. ISBN 007144829. 
2. ^ Kevin A. Hassett (2008, 2nd ed.). "Investment," The Concise Encyclopedia of Economics. Library of Economics and Liberty.

External links

• Investing at the Open Directory Project

This entry is from Wikipedia, the leading user-contributed encyclopedia. It may not have been reviewed by professional editors (see full disclaimer)

Dansk (Danish)
n. - investering, indskud, kapitalanlæg, pengeanbringelse

idioms:

• investment bond    investeringsobligation
• investment trust    investeringsselskab

Nederlands (Dutch)
investering, belegging, omsingeling, bedekking, installatie

Français (French)
n. - investissement, encerclement, placement, engagement, (Mil) investissement

idioms:

• investment bond    obligation
• investment trust    société d'investissement

Deutsch (German)
n. - Investition, Anlage, Verleihung, Belagerung

idioms:

• investment bond    festverzinsliches Anlagepapier
• investment trust    Investmentgesellschaft

Ελληνική (Greek)
n. - (οικον.) επένδυση

idioms:

• investment bond    επενδυτικό ομόλογο
• investment trust    εταιρεία επενδύσεων χαρτοφυλακίου

Italiano (Italian)
investimento, accerchiamento

idioms:

• investment bond    buono di investimento
• investment trust    fondo di investimento

Português (Portuguese)
n. - investimento (m)

idioms:

• investment bond    obrigações (f pl) de investimento
• investment trust    fundo (m) de investimento

Русский (Russian)
капиталовложение, облечение полномочиями, одеяние

idioms:

• investment bond    инвестиционные облигации
• investment trust    инвестиционный трест

Español (Spanish)
n. - inversión, cerco, sitio

idioms:

• investment bond    bono de inversión
• investment trust    sociedad de inversión o inversionista

Svenska (Swedish)
n. - investering, satsning (äv. bildl.), kapitalplacering, belägring (mil.), omringning, investitur

中文（简体）(Chinese (Simplified))
投资, 可获利的东西

idioms:

• investment bond    投资债券
• investment trust    投资信托公司

中文（繁體）(Chinese (Traditional))
n. - 投資, 可獲利的東西

idioms:

• investment bond    投資債券
• investment trust    投資信託公司

한국어 (Korean)
n. - 투자, 투자액, 서임

日本語 (Japanese)
n. - 投資, 投下資本, 着せること, 包囲, 投資額

idioms:

• investment bond    投資債券
• investment trust    投資信託会社

العربيه (Arabic)
‏(الاسم) استثمار ( الأموال)‏

עברית (Hebrew)
n. - ‮השקעה, כיתור, מצור‬

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