Investment

An asset or item that is purchased with the hope that it will generate income or appreciate in the future. The word originated from the Latin word vestis, which means “garment.” The term is used differently in economics and in finance. In economics, investment refers to the production per unit time of goods that are not consumed but are used for future production. The building of a factory used to produce goods and the investment one makes by going to college or university are both examples, tangible and intangible, respectively, of investments in the economic sense.

In finance, an investment is where an investor puts money into a vehicle or a monetary asset is purchased with the intent that the asset will provide income in the future or appreciate and be sold at a higher price. Investments can include the purchase of shares, bonds, or stocks. Such financial assets are then expected to provide income or positive future cash flows and may increase or decrease in value, giving the investor capital gains or losses.