Investment refers to the allocation of resources—such as money, assets, or time—with the expectation of generating future benefits or returns, usually in the form of income, profit, or value appreciation.

Types of Investments

• Stocks: Buying shares in companies to gain ownership and benefit from dividends and capital gains.investopedia+1
• Bonds: Lending money to entities (government, corporations) for periodic interest and return of principal at maturity.iciciprulife+1
• Real Estate: Investing in property for rent income or resale profit.investopedia+1
• Mutual Funds & Index Funds: Pooling money with other investors for diversified asset management, either actively or passively.iciciprulife+1
• Commodities: Buying tangible goods like gold, oil, or agricultural products that can rise or fall in value.investopedia
• Cryptocurrency: Holding digital assets on a blockchain network, which can be volatile but potentially profitable.investopedia
• Collectibles: Investing in rare items such as art, coins, or vintage goods for long-term appreciation.investopedia

Why People Invest

• To grow wealth over time through capital gains or recurring income (like interest or dividends).bajajfinserv+2
• To achieve major financial goals, such as retirement, education, or large purchases.bajajfinserv
• To combat inflation and preserve purchasing power by earning returns higher than the rise in prices.bajajfinserv

Investment Strategies

• Diversification: Spreading investments across different assets to reduce risk and volatility.wikipedia+1
• Risk Management: Understanding the balance between risk and potential return—higher risk can mean higher rewards, but also greater losses.wikipedia+1
• Growth vs. Income: Growth investing focuses on future value appreciation, while income investing seeks regular payouts from assets like bonds or dividend stocks.wikipedia
• Short-Term vs. Long-Term: Aligning investments with personal goals and time horizons, with some investments better suited for fast returns and others for gradual growth.bajajfinserv

Key Points

• Investment is distinct from saving; while saving is about setting aside money, investing aims to increase that money over time.cma
• Investments can be tangible, such as property, or intangible, such as stocks and bonds.cma+1
• Careful planning, staying informed, and managing risks are critical to successful investing.bajajfinserv

Investment remains a cornerstone for personal finance, business growth, and economic progress by enabling individuals and organizations to create future value from present resources.econlib+1