Chapter: 1 Financial Markets, Instruments and Investment Basics

Section: 1 What is an Investment

An investment is the current commitment of money and other resources in the expectation of reaping future benefits. For example, an individual might purchase shares of stock anticipating that the future proceeds from the shares would be high enough to justify the time that the money is tied up as well as the risk of the investment. In short, making an investment is to sacrifice something of value now, expecting to benefit from that sacrifice later.