What is investing?
In this article, we are going to talk about what is an investment? Let’s talk. An investment is an asset or commodity that is acquired for the purpose of generating income or making a profit. In financial science, investing is a financial asset, like a company’s stock, bought with the intention of increasing its value in the future and making a certain profit by selling that asset at a higher price.
“Do not save what is left after spending but spend what is left after saving.” Warren Buffet
In another definition, investing is any sacrifice of a present value, the amount and amount of which are known, in the hope of acquiring any value in the future, the size or quality of which is usually unknown. In other words, the investor is currently sacrificing a certain value in order to get the desired value in return in the future.
The concept of investment
The concept of investment can be sought, including participation in a project or business, or the purchase of assets such as housing; Gold; currency; Shares and. With the aim of making a profit and increasing capital by increasing the price of that asset in the future.
The term “investment” can refer to any mechanism used to generate future revenue. Practical action in the hope of increasing revenue in the future can also be considered an investment. For example, when deciding to pursue graduate education, the goal is often to increase knowledge and skills, and ultimately generate more income.
Types of investments:
The money spent on starting and running a business is an investment. Entrepreneurship is one of the most difficult investments to make because it requires more than just money. As a result, this type of investment is also considered a type of property investment that will bring a lot of return on investment.
Entrepreneurs make a lot of money by producing a product or service and selling it to the people who want it. The best example of this is Bill Gates, the founder of Microsoft, and one of the richest people in the world.
Buying a house, apartment, land in order to earn money or increase capital can be considered a kind of real investment. A property that you buy and live in for shelter, and that may even increase in value over time, is not an investment.
Buying gold, silver, jewelry, and any other valuable commodity that can be resold can be a real investment, provided that the commodity is purchased with the goal of selling at a higher price in the future.
Lending investing allows you to act like a bank. These types of investments are less risky than property investments and therefore have lower returns.
“It’s not whether you’re right or wrong that’s important, but how much money you make when you’re right and how much you lose when you’re wrong.” — George Soros
Buying stocks of companies in the stock market in order to earn money and increase capital is a financial investment. The risk of investing in the stock market is very high and those who have the knowledge to invest in this market can manage the risk in this market. Operate and earn more returns than other assets.
Debt securities are necessary to finance the implementation of the plans of companies and institutions of the country and are usually issued and guaranteed by the government, and since the payment of principal and interest of these securities is committed by the government, they are considered low-risk securities. Bonds have common characteristics such as maturity date, face value, nominal interest rate, and selling price. Participation bonds and Sukuk are the two main types of bonds available in the market.
Certificate of Bank Deposit:
Certificate of bank deposit is low-risk investments offered by banks and in different accounts in different time periods can have different interest rates due to its low risk and lower returns than other options. Will be available in the market.
Mutual funds are one of the methods of investing in the capital market. Funds are financial intermediaries that raise people’s funds and invest in securities and benefit people from profits.
Fixed Income Mutual Fund:
These funds combine different financial assets such as participation bonds; Bank deposits; Treasury bonds are part of low-risk investments and have a guarantee of liquidity and interest payments that pay the fund dividends to investors within a certain period of time.
Stock Investment Fund:
These funds allocate at least 70% of their asset composition to the shares of listed companies and the rest to equity securities, so they have a higher risk than fixed-income funds and are also more likely to return.
These types of funds invest in approximately equal amounts of fixed-income stocks and securities. The risk of these types of funds will be less than equity funds and higher returns than fixed-income funds.
Mutual Investment Fund (ETF):
These funds have a variety of assets of stocks and securities and are traded like stocks on the stock exchange. Unlike mutual funds, where the NAV of each unit is calculated at the end of the day and is the basis for trading, ETFs can be traded as stocks during a trading day.
“An investment in knowledge pays the best interest.” — Benjamin Franklin
Investing to educate you is a high paying investment.