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. 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. 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.

Promoters of and news sources that report on speculative financial transactions such as stocks, mutual funds, real estate, oil and gas leases, commodities, and futures often inaccurately or misleadingly describe speculative schemes as investment.

Pronunciation

• Audio (US) (file)

Noun

investment (plural investments)

1. A placement of capital in expectation of deriving income or profit from its use.
2. A mixture of silica sand and plaster which, by surrounding a wax pattern, creates a negative mold of the form used for casting, among other metals, bronze.

Sourced

• The line separating investment and speculation, which is never bright and clear, becomes blurred still further when most market participants have recently enjoyed triumphs. Nothing sedates rationality like large doses of effortless money. After a heady experience of that kind, normally sensible people drift into behavior akin to that of Cinderella at the ball. They know that overstaying the festivities — that is, continuing to speculate in companies that have gigantic valuations relative to the cash they are likely to generate in the future - will eventually bring on pumpkins and mice. But they nevertheless hate to miss a single minute of what is one helluva party. Therefore, the giddy participants all plan to leave just seconds before midnight. There's a problem, though: They are dancing in a room in which the clocks have no hands.
  • Warren Buffett, Berkshire Hathaway 2000 Chairman's Letter

Look up investment in Wiktionary, the free dictionary

	New Location:
city:
state/region:
country:

Business: Investing: Money Managers: C
CDK Realty Advisors - Registered investment advisor engaged in real estate investment activities for pension funds and foundations. ...

---

Business: Financial Services: Investment Banks
See also: Business: Financial Services: Venture Capital (788) This category in other languages: Polish (2) Agawam Partners - Merchant banking firm focused on the ...

---

Business: Investing: Stocks and Bonds: Equities ...
Spinoffs Investing - A paid investment report and supplement guide for learning about spinoffs investing. Stock2own - Assists in stock ...