Investment

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Investment

The conversion of money to assets, in hopes of profit. [1] Investment comes with the risk of the loss of the principal sum. It is related to saving or deferring consumption. An asset that creates value and income over time. Investors look for four things in an investment.

• The possibility of capital appreciation
• Income
• Preservation of principal
• Liquidity

We want to be able to sell it for more than we pay for it. We want a little bit of income to cover the expense of ownership. We want to be able to get our principal out without putting the price down on ourselves.

The total return includes dividends, capital gains distributions, and the increase in the net asset value of the property. ^[1] The change in value of an investment over a given period, assuming reinvestment of any dividends and capital gain distributions, expressed as a percentage of the initial investment. [2]

The word originates in the Latin "vestis," meaning garment, or vest, and refers to the act of putting assets into others pockets. [3] Persons put money in-vests, makes an investment, so as to have profits return in there own pocket. ^[2]

References

1. ↑ Mutual Funds: An Introduction to the Core Concepts by Dr. Mark Mobius ISBN-10: 0470821434 pg 83
2. ↑ Rich Dad Poor Dad Robert T. Kiyosaki ISBN-10: 0446677450 pg61