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What Is Investment? This Definition, Types, And Examples | INVESTMENT

What Is Investment

Investment is a strategic factor in economic activity. Investment is also commonly referred to as capital investment.

Investment is the activity of investing money or capital (valuable assets) for the purpose of obtaining profit. Parties or people who make investments are called investors.

Quoted from the book 'Fundamentals of Investment Management' by Nila Firdausi Nuzula and Ferina Nurlaily, in another sense, investors are parties who make investments by buying financial assets and expecting an increase in price when they sell their assets.

Investors are classified into two, namely individual investors and institutional investors which usually consist of bodies, companies, or institutions.

Then, what is an investment?

Definition of Investment

The following is the definition of investment according to several experts and institutions:

1. Reilly & Brown

Investment is a person's willingness to allocate money in a certain value in the present in order to obtain revenue in the future.

2. Bodie, Kane, & Marcus

Investment is a person's willingness to allocate money or valuable resources at this time and hold it until the specified time in order to receive a profit (profit) in the future.

3. Dornbusch

Investment is expenditure provided to increase or maintain the components of capital goods.

Type of Investment

There are various forms or types of investment. Some types of investment are:

Property Investment

Property investment is a physical investment. In general, property investment can be very profitable, because the price will continue to increase every year. An example of property investment is buying land and buying a house which can then be sold or rented out.

Gold Investment

Gold is the easiest, most classic form of investment. Gold investments can be in the form of precious metals, jewelry, gold bars and gold vouchers (digital gold).

Mutual Fund Investment

Mutual fund investment is defined as a container used to raise funds with investors to invest in the investment manager's portfolio.

Deposit Investment

Investment deposits are used if you want to save the money for a long period of time. The term of the deposit ranges from 3 to 12 months. The types of deposits that the millennial generation usually choose are time deposits, certificates of deposit, and deposits on call.

Stock Investment

Shares are a sign of ownership in a company. The higher the risk of a stock, the higher the profit that will be obtained, so accuracy analysis skills are needed for placing capital for investment.

Cryptocurrency Investment

Currently Cryptocurrency or crypto currency is increasingly recognized by the public as a type of investment. Cryptocurrency has no clear fair value. the easiest way to do is to buy coins. The best coins are coins that are used by many people today and have more massive potential in the future, as quoted from the book 'Momento Cryptocurrency Trading Techniques' by Alief K.

Investment Example

Examples of investments for example in the type of property. In 2015 Asri bought a house in the Nusa housing complex in Bekasi for IDR 200 million, with the intention of investing without living in it. Then, after 7 years, to be precise, in 2022 the house in the housing has been priced at IDR 500 million, so the investment profit that Asri gets if she sells the house in 2022 is IDR 300 million.

That was an explanation about investment, types, and examples. Hopefully it adds to the knowledge of the toktokers!

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