Econ Grapher

Investment

What is Investment?
Investment in the strict economic sense represents capital expenditure by companies in an economy or economic model. It forms part of the GDP equation. Investment is essentially foregoing current consumption to increase future consumption, production, or output. In the basic personal finance sense it is putting money into an instrument that is expected to generate returns e.g. income, or increase in value. Investment is a critical aspect of any economy or financial system as it increases the availability and reduces cost of funding, while also increasing future wealth.

How does it relate to Markets?
In the markets sense investment involves buying things like shares (in the case of the share market), bonds (in the case of the bond market), property, derivatives, managed investment products e.g. mutual funds, ETFs, etc. But of course in the economic sense investment is also a useful indicator because the level of investment in an economy can be informative of future potential economic growth (this is broadly true on the macro level as well as the micro level e.g. companies that invest in equipment, new production facilities, etc). 

Sources and further reading:
Business Dictionary - Investment
Investor Glossary - Investment
WordiQ - Investment
DMOZ - Investing

Graph Library:
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Original Source: http://www.econgrapher.com/encyclopedia-investment.html

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