23-09-2016, 10:12 AM
1INTRODUCTION TO INVESTMENT AND SECURITIES
Investing in various types of assets is an interesting activity that attracts peoplefrom all walks of life irrespective of their occupation, economic status,education and family background. When a person has more money than herequires for current consumption, he would be coined as a potential investor.The investor who is having extra cash could invest it in securities or in anyother assets like gold or real estate or could simply deposit it in his bank account. The companies that have extra income may like to invest their moneyin the extension of the existing firm or undertake new venture. All of theseactivities in a broader sense mean investment.INVESTMENTInvestment is the employment of funds on assets with the aim of earningincome or capital appreciation. Investment has two attributes namely time andrisk. Present consumption is sacrificed to get a return in the future. The sacrificethat has to be borne is certain but the return in the future may be uncertain. Thisattribute of investment indicates the risk factor. The risk is undertaken with aview to reap some return from the investment. For a layman, investment means
some monetary commitment. A person’s commitment to buy a flat or a hou
sefor his personal use may be an investment from his point of view. This cannotbe considered as an actual investment as it involves sacrifice but does not yieldany financial return.