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Wednesday, May 29, 2013

chapter - 1.1 What Is Investment?

1.1 What Is Investment?

Investment

CSMER
The price of each and every commodity is changing with the changing times. So what we invest should be able to provide enough returns to meet our future needs.
For example, if you had invested in property two years ago and if it shows reasonable appreciation now you would be really excited about having made the right investment. Sometimes we find that our savings are not able to meet our needs and we conclude that the investment was bad. You will then ask yourself: “What if I had known how to invest?” The question acquires enormous proportions depending on the quantum of the loss. An informed decision is better than relying on someone blindly or leaving things to chance. The good news is that any person who has a wish to learn can rely fully on the ‘basics of investment’ and take calculated investment decisions.

There are many types of investment options:

Fixed Deposit

Fixed Deposit is meant for those investors who want to deposit a lump sum of amount for a fixed period - say for a minimum period of 15 days to five years and above - thereby earning a higher rate of interest in return. Investor gets a lump sum (principal + interest) amount when the fixed deposit matures.

Shares

A share or a stock is a document issued by a company which entitles its holder to be one of the owners of the company. Shares are issued by the company or could be purchased from the stock market.

Bonds

A debt investment in which an investor loans money to an entity (corporate or governmental) that borrows the funds for a defined period of time at a fixed interest rate. Bonds are used by companies, municipalities, states and U.S. and foreign governments to finance a variety of projects and activities.

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