what is investment? how do i know what to invest in? what are high and low risk?

Answer 1

Basically investment is; you give other people your money. They take your money and the money from other people, put it all together and put all that money into things they feel will make money. Such as new businesses, houses, offices, inventions, research, etc. Keep in mind that the money they put into other things MAY, or MAY NOT make any money.

If and when the money then put into other things actually MAKES money, then a small percentage is given back to you, and everyone else who gave their money. Based on how much each of you gave. The more you give, the more you get back.

Of course these people who are taking your money are usually very smart and USUALLY put your money into things that DEFINITELY will make money for everyone. But no one is perfect, sometimes everyone looses their money. That is the RISK part of investing.

Rich people USUALLY invest into two things; real estate. The kind where you own something and rent it to others. And STOCKS. They buy stocks and hang on to them forever!! Never sell, never trade.

As the years go by, both will gradually give you a good monthly income for the rest of your life. Just remember to buy, hold on tight, and never sell. No matter what happens.

Answer 2

The best thing for you to do is to talk with an investment broker. Generally high risk means you have a high risk of losing money. You are generally rewarded for that risk though the possibility of high returns. Low risk is like a saving bond or CD. You have a low risk of loss.

Answer 3

Investing is simply 'trying to make a gain' whether you want to gain intelligence, money or happiness... You invest something to gain something in return.

You DON"T know what to invest in, which is why you ask others, read books, and look at what family, friends and people around you are using everyday of thier lives. In MY opinion I stress investing in only things you use daily and see others using.

High and Low risk is meerly opinion... what may be risky to you may not be to me. Of course there is a rule of thumb... for example : The neighbor kid who is always in jail & shoots at the neighborhood animals wants to start up a Bank in town at the age of 19... well from what you know of this person you SHOULD find it RISKY to give him / her any money for this start up.

Yes I know that is one odd example but a simple one for you to get the idea of what I mean.

Check out companies by calling them up and asking for their prospectus. It is free ! THEY want investors and that is what a prospectus is for, for you to research and learn about a company. There are many companies that offer you direct purchase plans, meaning you can buy right from them with no broker. That is how I started out, read books, taught myself and now am soaring...

Go to your local library and read up on all different opinions of investing to come to your own conclusion. Posting your question here was good for you should get some answers that will help get you started ! Happy Investing : )

Answer 4

Investment or investing1 is a term with several closely-related meanings in finance and economics, related to saving or deferring consumption. An asset is usually purchased, or equivalently a deposit is made in a bank, in hopes of getting a future return or interest from it. Literally, the word means the "action of putting something in to somewhere else" (perhaps originally related to a person's garment or 'vestment').

Types of investment

The major difference in the use of the term investment in economics and finance is that economists are usually referring to a real investment - such as a machine or a house - but financial economists usually refer to a financial asset - money that is put into a bank or the market - which may then be used to buy a real asset.
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Economics

* In Economics, investment means the purchase (and thus 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 a stricter sense, investment is also a component of GDP given in the formula GDP = C + I + G + NX. The investment function in that aspect is divided into non-residential investment (such as factories, machinery etc) and residential investment (new houses).

* Investment is often modeled as a function of income and interest rates, given by the relation I = (Y, i). An increase in income will encourage higher investment, whereas a higher interest rate may discourage investment as it becomes costlier to borrow money. Even if a firm chooses to use its own funds in an investment, the interest rate represents an opportunity cost of investing those funds rather than loaning them out for interest.

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Finance

* In finance, investment means buying securities or other monetary or paper (financial) assets in the money markets or capital markets, or in fairly liquid real assets, such as gold as an investment, real estate, or collectibles. Valuation is the method for assessing whether a potential investment is worth its price.

* Types of financial investments include shares or other equity investment, and bonds (including bonds denominated in foreign currencies). These investments assets are then expected to provide income or positive future cash flows, but may increase or decrease in value giving the investor capital gains or losses.

* Trades in contingent claims or derivative securities do not necessarily have future positive expected cash flows - so are not considered to be assets, or strictly speaking, securities or investments. Nevertheless, since their cash flows are closely related to (or derived from) those of specific securities, they are often studied as or treated as investments.

* Investments are often made indirectly through intermediaries, such as banks, mutual funds, pension funds, insurance companies, collective investment schemes, or even investment clubs. Though their legal and procedural details differ, an intermediary generally makes an investment using money from many individuals, each of whom receives a claim on the intermediary.

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Personal finance

* Within personal finance, money used to purchase shares, put in a collective investment scheme or used to buy any asset where there is an element of capital risk is deemed an investment. Saving within personal finance refers to money put aside, normally on a regular basis. This distinction is important as investment risk can cause a capital loss when an investment is realised, unlike saving(s) where the more limited risk is cash devaluing due to inflation.

* In many instances the term saving and investment are used interchangeably which confuses this distinction. For example many deposit accounts are labeled as investment accounts by banks for marketing purposes. To help establish whether an asset is saving(s) or an investment you should consider where your money is invested. If the answer is cash then it is savings, if it is a type of asset which can fluctuate in value then it is investment.

http://en.wikipedia.org/wiki/Investment
http://en.wikipedia.org/wiki/Trade