DR D DEEPA- SRCAS-Concept of Investment.pptx

Concept of Investment

Investment refers to the allocation of resources, primarily capital, with the expectation of generating future returns. It involves committing money or assets to various avenues such as stocks, bonds, real estate, mutual funds, or businesses to earn income or achieve capital appreciation over time. Investment plays a crucial role in economic growth, personal financial planning, and wealth creation.

Types of Investments
Financial Investments: These include securities like stocks, bonds, and mutual funds. Investors purchase financial instruments hoping their value will appreciate or provide periodic returns in the form of interest or dividends.
Real Assets Investments: Investments in tangible assets such as real estate, gold, and commodities fall under this category. These assets often serve as a hedge against inflation.
Business Investments: Entrepreneurs and companies invest in business ventures, infrastructure, or research and development to expand operations and increase profitability.
Personal Investments: Individuals invest in education, skills, or health to enhance their earning potential and quality of life.
Objectives of Investment
Wealth Creation: Investors aim for long-term capital appreciation.
Income Generation: Investments like bonds and rental properties provide regular income.
Risk Management: Diversification in investment portfolios helps mitigate risks.
Inflation Protection: Investments in real estate and commodities safeguard against rising prices.
Retirement Planning: Individuals invest in pension funds, annuities, and retirement plans for financial security in old age.
Risk and Return in Investment
Investments are subject to varying degrees of risk, including market volatility, economic downturns, and geopolitical factors. Typically, higher-risk investments offer the potential for higher returns, whereas lower-risk investments provide stable but modest gains. Investors assess their risk tolerance before making investment decisions.

Conclusion
Investment is essential for financial growth, economic stability, and achieving long-term financial goals. A well-planned investment strategy, balancing risk and return, helps individuals and businesses maximize their financial potential.

1. DR D DEEPA Assistant Professor Department o f Management Science - BBA Sri Ramakrishna College of Arts and Science Coimbatore - 641 006 Tamil Nadu, India 19CBM18 – Investment Management UNIT - 1 Concept of Investment 1

2. Meaning : Investment means conservation of cash or money into monetary asset or a claim on future money for a return. Definition : “Investment means the investing of money” – Oxford Dictionary “The addition to the value of the capital equipment which has resulted from the productive activity of the period” – Keynes Concept of Investment Sri Ramakrishna College of Arts and Science 2

3. Rate of return Risk Marketability Tax shelter Concealability (Hide) Capital growth Convenience Purchasing power Stability of power Characteristics of Investment Sri Ramakrishna College of Arts and Science 3

4. Thank you 4