Investing 101 Series – Part 1: What is an Investment?
Keep up with our investment series and you will become as good as anyone and can invest with knowledge and confidence.
What is an investment?
An investment is the placing of money for the purpose of receiving a return on the investment (money). They can be either long term, usually much more than a year old, or short term, less of a time horizon. The investment may be structured conservatively (less risk) or more speculative (more risk). Your preference for less risk or more risk, will usually depend on your economic circumstances, age and goals.
Investing occurs mostly in the form of stocks on a listed, regulated exchange. But, investments are also made in real estate, bonds, loans, art or anything which has a value determined by supply and demand, and the interest of many.
Liquidity (ability to sell when ready) is important.
Investing
Investing is almost as easy as shopping for a car or any large asset purchase. When you plan to make a large purchase for any item, you first think about it for a while and then do research, more research, and then make a decision.
Investing is very similar. Think about what went into your thinking about a certain model car. You probably observed something that caught your eye while you were out traveling, or maybe in a magazine, or possibly on TV.
Good investments are made in the same way. The difference, instead of a specific product, is being alert to a trend.
All you need is the fundamentals of investing.
The upcoming articles in our Investing 101 series will tell you how and what these fundamentals are.
Learn more about Investments here:
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