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[What is Investment]


Investment is a term with several closely related meanings in finance and economics.


In theoretical economics, investment means the production of capital goods - goods which are not consumed but instead used in future production. Examples include building a railroad, or a factory, clearing land, or putting oneself through college.

In finance, investment means buying assets, for example equity investment or real estate investment. These investments may then provide a future income and increase in value.

Related Topics

Financial economics is the branch of economics concerned with the workings of financial markets, such as the stock market, and the financing of companies.

It attempts to answer questions such as:

-How are the prices of financial assets, such as shares and bonds, determined?
-What are the effects of a company choosing different methods of financing its operations, such as issuing shares or borrowing?
-What portfolio of assets should an investor hold in order to best meet her objectives?

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