INTRODUCTION

Definition of Investment

Anything procured with the hope that it will generate value 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 possessions. 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 an advanced price.

INVESTOPEDIA EXPLAINS INVESTMENT

In the economic sense investments include the acquisition of bonds, stocks or real estate property.Investment has different meanings in business and economics. In business, investment is putting money into something with the expectation of profit usually over a longer term. This may or may not be backed by research and analysis. Most or all forms of investment involve some form of risk, such as investment in equities, property, and even fixed interest securities which are subject, inter alia, to inflation risk. In contrast putting money into something with a hope of short-term gain, with or without through analysis, is gambling. This category would include most forms of derivatives, which incorporate a risk element without being long-term homes for money, and betting on horses. Under the efficient market theory, all investments with equal risk should have the same expected rate of return: that is to say there is a trade-off between risk and expected return. But that does not prevent one from investing in risky assets over the long term in the hope of getting benefit from this trade-off.