What is Investment and its objectives: Investing for Beginners

Are you beginner to investing? Are you looking forward for what is investment? Do you know about basics of investment? If you are searching for answer on the same; then you are at the right place. Here we are going to explain you what is investment, investment objectives, investing options and lot more.

Investment Definition:

Investment is not merely cash saving into your bank account and earning interest. Investing is about proactive use of capital to generate wealth and let money works for you rather you work for money. It doesn’t matter if you buy equities, properties, gold, etc for long period or short period. Only thing which matter is in a long run is how fast or how smartly your invested money can be doubled. Let us see ahead “how do people choose investment options and what is investment objective behind that”.

Invest Smartly – Invest Wisely:

Right decision making is one of the crucial parts of investment. Financial instruments like equities, mutual funds, real estate, etc are weapons where right decision will assist you to reach your target and wrong decision will backfire and ruin your life into financial crisis. When you glance around for investment opportunities you may come across various attractive financial schemes, chit fund schemes, etc. You should not get tempted to any schemes with lack of knowledge of it or without computing risk or reputation. Your investment decisions must be reasonable, safe, legal and robust in the long run investment.

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Risk v/s Reward from Investment:

General Thumb rule of investment is risk is equally proportional to reward that means lower your risk lower would be your returns and more risk would assist you to achieve more earnings. This risk to reward varies with type of investments. For example: Interest from saving bank account is most safe investment with low returns whereas investment in equities, mutual funds are little risky with higher returns as compared to bank interest in long run.

Investment Objectives:

Different individuals with diverse thoughts have diversified objectives for investing money. Following are some of the common objective goals for which individual prefer to invest:

  • Alternative source of regular income.
  • Generating and preserving capital wealth.
  • Investing for retirement plans.
  • Investing to give bright future to children.
  • Accumulating cash to start the business.
  • And many more…

How to choose your Investment Options:

The procedure of quite straightforward, everything depends on how much capital or cash you would prefer to invest. For example: with large amount you can prefer to invest in properties or with small amount you can prefer to invest in financial funds. If investment decision is correct but time to invest is incorrect will result into failures so in next step after you come to a decision, you should acquire complete knowledge of the investment product which will assist you to take the right decision at right time.  After you have acquired quality knowledge under your next step you can draft your systematically investment plan for long run.

Read Free Tutorial Course - Basics of Investing for Beginners

» Currently Reading: What is Investment and its objectives.

» e-Learning Chapter 2: Why is Investment important for Economic growth.

» e-Learning Chapter 3: Ways to Invest your money and make profit.

» e-Learning Chapter 4: What are the Best Investment Opportunities for your Retirement Income.

» e-Learning Chapter 5: What are the Legal Matters you should know before Investing.

» e-Learning Chapter 6: Different Types of Investment Risks Involved in Investing.

» e-Learning Chapter 7: When and How to Invest in Stocks.

» e-Learning Chapter 8: How Positive Attitude can improve your Investing mindset.

» e-Learning Chapter 9: Should you Borrow Money to Invest in Stock Markets or Funds.

» e-Learning Chapter 10: 5 Rules of Thumb: Key points to be consider before making Investments.

» e-Learning Chapter 11: How to Calculate Stock Market Returns, Break Even Point and Basis Point.

» e-Learning Chapter 12: How to Calculate Compound Interest and Simple Interest.

» e-Learning Chapter 13: Rule of 72, 114 and 144 of Compounding Interest formula.

» e-Learning Chapter 14: What is the Difference between Trading, Investment and Speculation?

» e-Learning Chapter 15: How to become a Smart Investor or a Successful Investor.

» e-Learning Chapter 16: Tutorial Quiz – Basics of Investing for Beginners Module.

1 thought on “What is Investment and its objectives: Investing for Beginners”

  1. Avatar

    Two factors that can help you determine your risk tolerance are your net worth and your risk capital. Your net worth is your assets minus your liabilities. Your risk capital is money that, if you lose on an investment, won’t impact your lifestyle.

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