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Investing: The Term In Different Fields

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Warren Buffet is one of the admired persons of the contemporary times. One of the primary things that have brought him in the list of billionaires is investing. Aside from being the chairman of one of the largest conglomerates in... See more » Warren Buffet is one of the admired persons of the contemporary times. One of the primary things that have brought him in the list of billionaires is investing. Aside from being the chairman of one of the largest conglomerates in the world, he is known to have yielded billion dollar gains from making investments. He is one of the successful investors in business and finance world. But what is it in investing that can make one wealthy and possibly wiser like Mr. Buffet? Investment refers to an activity that involves obtaining an asset that can yield long-term gain. In financial sense, investment refers to activities that involve the buying of assets that can possibly create wealth in the future. Reaping long-term profits is one of the reasons a person is engaged in investing. A gain is normally perceived when a person is making an investment. In finance, the gain normally refers to monetary profits or other cash equivalent instruments. There are various closely-related definitions of investment in the fields of economics, personal finance, business finance and business management. In personal finance, investment is related to savings. Although these words have been used interchangeably, they have certain distinctions. Saving normally refers to money put aside on a certain basis for future use. It may involve deferring consumption just to make a saving. Investing in personal finance may refer to an activity that involves acquisition of assets or purchasing shares that can accumulate gain in the future. Certain risks may come in personal investment and savings. If money is put aside, there is a risk of devaluation. In investment, capital risk is involved when acquiring an asset. For instance, a person buys shares of stock with the aim that the stock will increase in value. If the shares of stock increase in market value, a potential gain may come when the stocks are sold on their highest value. Thus, the investor can earn gains from the sale of stock shares. There is a risk of capital loss which is the disposal of an asset- the stock shares, but the investor can gain from their sale. There are various investment opportunities that a person can involve in for wealth maximization. Individuals who have enough resources can buy shares of stocks, money market instruments and other assets such a precious metals and gems that can potentially increase in value in the future. Paintings have also been deemed as investments to many while real estate is one of the potentially profitable investments. Individuals may have to go to intermediaries when making investments. Banks, insurance companies, mutual funds, collective investment schemes, investment clubs and pension funds are known intermediaries of investments. Investors may hire the service of investment bankers and other credible agents to help them in their investment matters. Companies have also been known to practice investment for the growth of their business sizes. Other companies invest in long-term assets such as stocks and bonds. Long-term investment is one of the account titles found in the balance sheet of a business entity and even non-profit organizations. Moreover, businesses and business executives may also employ the use of investment bankers and other intermediaries to carry out their investments. Investment decision is one of the functions of a business manager. Managers may do the investment computation when planning to acquire an asset or assets. However, accountants particularly management accountants carry out the task of computing the rate of return of investment, the cost of investment and the value of investment in the future. It also computes for the net present value which is used to analyze and to determine the viability of an investment. In economic view, investment refers to undertakings that can potentially bring value in the future. Attending college or university classes is an example of investment pertaining to education. In economics, the value of investment is included in deriving the gross domestic product or GDP. Investment risks normally come See less »

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business, economic growth, economy, finance, invest, investing, investment

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From the list : Business and Finance by carlwsp

Investing is one of the activities that can contribute to the economic growth of an individual, an entity and a nation.

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Investing: The Term In Different Fields

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