Investment

To invest is to allocate money in the expectation of some benefit in the future.

In finance, the benefit from an investment is called a return. The return may consist of a gain (or loss) realised from the sale of property or an investment, unrealised capital appreciation (or depreciation), or investment income such as dividends, interest, rental income etc., or a combination of capital gain and income. The return may also include currency gains or losses due to changes in foreign currency exchange rates.

Investors generally expect higher returns from riskier investments. When we make a low risk investment, the return is also generally low.

Investors, particularly novices, are often advised to adopt a particular investment strategy and diversify their portfolio. Diversification has the statistical effect of reducing overall risk.

Terminology and risk

An investor may bear a risk of loss of some or all of their capital invested.

Investment differs from arbitrage, in which profit is generated without investing capital or bearing risk.

Savings bear the (normally remote) risk that the financial provider may default.

Foreign currency savings also bear foreign exchange risk: if the currency of a savings account differs from the account holder's home currency, then there is the risk that the exchange rate between the two currencies will move unfavorably, so that the value of the savings account decreases, measured in the account holder's home currency.

In contrast with savings, investments tend to carry more risk, in the form of both a wider variety of risk factors, and a greater level of risk.

Other Languages
العربية: استثمار
ܐܪܡܝܐ: ܫܘܚܡܠܐ
asturianu: Inversión
azərbaycanca: İnvestisiya
Bân-lâm-gú: Tâu-chu
беларуская: Інвестыцыя
беларуская (тарашкевіца)‎: Інвэстыцыя
български: Инвестиция
bosanski: Investicija
brezhoneg: Posterezh
čeština: Investice
Deutsch: Investition
Ελληνικά: Επένδυση
español: Inversión
Esperanto: Investado
euskara: Inbertsio
français: Investissement
galego: Investimento
한국어: 투자
हिन्दी: निवेश
hrvatski: Investicija
Bahasa Indonesia: Investasi
italiano: Investimento
עברית: השקעה
Basa Jawa: Invèstasi
ಕನ್ನಡ: ಹೂಡಿಕೆ
ქართული: ინვესტიცია
қазақша: Инвестиция
lietuvių: Investicijos
magyar: Beruházás
македонски: Инвестиции
Bahasa Melayu: Pelaburan
Mìng-dĕ̤ng-ngṳ̄: Dàu-cṳ̆
Nederlands: Investering
नेपाली: लगानी
नेपाल भाषा: लगानी
日本語: 投資
norsk nynorsk: Investering
олык марий: Инвестиций
oʻzbekcha/ўзбекча: Investitsiya
پښتو: پانګونه
polski: Inwestycja
português: Investimento
română: Investiție
русский: Инвестиции
Scots: Investment
shqip: Investimi
Simple English: Investment
slovenščina: Investicija
српски / srpski: Инвестиције
srpskohrvatski / српскохрватски: Investicija
Basa Sunda: Invéstasi
svenska: Investering
Tagalog: Pamumuhunan
தமிழ்: முதலீடு
తెలుగు: పెట్టుబడి
Türkçe: Yatırım
українська: Інвестиція
Tiếng Việt: Đầu tư
中文: 投资