Wed. Jul 27th, 2022


What is an investment?

An investment is a limited amount of money, i.e. a financial asset (Money), which is given to a third party, a company, or a set of shares in order to be increased by the profits derived from a company.

As an example, what is an investment?

In an economic sense, an investment is an investment of capital with the objective of making a profit in the future. An investment of this type is the choice to forgo an immediate benefit in order to obtain an unusual future benefit. For example, suppose a person has $20,000 in savings. With this money he can buy a car.

However, he decides to invest the money in shares of a company so that he can sell them at a higher price in the future. The $20,000 he invests in shares could turn into $40,000 in five years’ time. By then, these entities will have earned income, doubled their capital to buy cars and disposed of the remaining funds. But it should not be forgotten that they initially abandoned the direct realisation of their desires (buying a car).

What types of investments are there?

1. Investment Funds

A mutual fund is an investment. What is an investment? An investment vehicle composed of funds held by several investors for the purpose of investing in various categories of stocks and bonds. This type of fund is managed by a professional fund manager, who invests the fund’s money to generate capital appreciation and returns.

2. Robo-advisors

An online investment platform that automatically selects investments for you under the strict supervision of an investment professional.


ETF stands for Exchange Traded Fund. These funds are traded on an exchange, just like shares, so their prices fluctuate throughout the day.


Abbreviation for Sociedad Cotizada Anónima de Inversión en el Mercado Inmobiliario, the Spanish equivalent of a REIT (Real Estate Investment Trust), and internationally this type of fund is called a REIT. This type of fund is known internationally as a REIT.

5. Hedge Funds.

Their objective is to generate above-market returns through sophisticated strategies, such as leveraged derivatives. It should be remembered that these are sophisticated investment vehicles and involve significant risk.

6. Actions

Undoubtedly the best known investment. A share certificate is a certificate showing that you own a portion of a company’s shares. Buying shares gives you certain rights, such as the right to decide on certain matters concerning the company and to share in its profits.

7. Business

Setting up a company is one of the most difficult forms of investment, as it requires not only money but also time. However, it is one of the best forms of investment, as the potential returns are very high.

8. Real estate.

This category is suitable for long-term investments. It includes different types of properties such as flats, houses, offices, land, warehouses, garages and even agricultural land.

9. Crowdfunding

This is investment in a start-up company or project. Entrepreneurs usually present their business idea on the Internet and receive small amounts of funding from a number of small investors. The investor receives shares in the company in exchange for their investment.

10. Bonds

When you buy a bond, you are essentially lending money to a company, government or other organisation. When the bond matures, you will receive a certain amount of interest in addition to the original principal.

11. Bank deposits.

You lend your own money to a bank for a fixed period in exchange for a predetermined interest rate. At the end of the fixed period, you get an initial capital. Generally, the longer the bank deposit, the more interest you will receive.

12. Crowdlending.

Crowdlending, also known as peer-to-peer (P2P), involves lending money to individuals or companies and earning interest in return. In many cases, the money invested in this way is spread across many different loans, thus diversifying and reducing risk.

13. Commodities

Commodities are products that can be bought and sold on a leveraged basis, using financial derivatives, without the need for a physical asset. They tend to fall into three main categories: energy (e.g. oil and gas), metals (e.g. copper and aluminium) and agriculture (e.g. wheat and cotton).

14. Cryptocurrencies.

They are essentially digital or virtual currencies that are not backed by a government. They can be bought and sold online. The number is growing rapidly and there are more than 1600 cryptocurrencies in the world, the most popular of which is Bitcoin.

15. Valuables and collectors’ items

This category includes a variety of items that are inherently rare, i.e. not available in large quantities and therefore desirable and valuable. It may include items such as works of art, diamonds, classic cars, antiques and even wine and whisky.

16. Foreign exchange market (Forex).

The foreign exchange market is the largest market in the world and is very liquid, with billions of dollars in circulation every day. The way to make money on Forex is to buy a country’s currency at the lowest possible price and sell it at the lowest possible price.

17. Gold.

For centuries, gold (like silver) has been considered money and used to make coins. Today it is treated as a commodity, but because of its characteristics it should be placed in a separate category.

An investment is a deposit of money with the expectation of a positive return in the future. In other words, investing means owning an asset or commodity with the intention of earning a return on the investment, or increasing the value of the investment, i.e. increasing the value of the asset over a period of time.


An investment is a way to potentially increase the amount of money you have. Your goal is to buy a financial instrument, called an investment, and sell it at a higher price than when you bought it. Examples of investments are stocks, bonds, mutual funds and annuities.

The best websites to learn how to invest in the stock market

Market Team.

If you want to invest in stocks, you should use these 5 investment tools.

Discount brokers. Unless you work on the trading desk of a large bank, all your investments should be made with a broker.

  • Personal capital.
  • Free portfolio analysis.
  • FeeX.

Frequently asked questions on investment

What is an investment and how does it work?

What is an investment? An investment is a way of potentially increasing the amount of money you have. Your goal is to buy a financial product, called an investment, and sell it at a higher price than when you bought it. These include stocks, bonds, mutual funds and annuities.

What does it mean to invest?

An investment is an asset or item that is purchased in order to generate income or increase its value… For example, an investor may buy a financial asset now in the hope that it will generate income in the future, and later sell it at a higher price to make a profit. There are four main types, or asset classes, of investment, each with different characteristics, risks and rewards

  • Growth.
  • Equities.
  • Real estate.
  • Defensive investments.
  • Cash.
  • Fixed interest rates.

How can I make money from my investments?

  • Play the stock market. Day trading is not for the faint of heart.
  • Earn money by investing in courses. Investing in yourself is one of the best opportunities.
  • Commodity trading.
  • Trading cryptocurrencies.
  • Take advantage of peer-to-peer lending.
  • Trading options.
  • Contracts for the purchase and sale of real estate.

What should newcomers invest in?

Top 6 investments for beginners

  • 401(k) or company retirement plans.
  • Robo-advisors.
  • Investment funds with target dates.
  • Index funds.
  • Exchange Traded Funds (ETFs)
  • Uses of investment

Can I get rich by investing?

Investing in stocks will not make you a millionaire overnight. The road to wealth is slow, steady and continuous. At an average return of 7% a year, your initial investment will double in 10 years. You won’t achieve that goal if you put your money in a piggy bank.

Which investments are the riskiest?

Fixed income includes bonds and bond funds. Equities include equities and mutual funds, the riskiest of the three main asset classes, but with the highest return potential.

How can I start investing safely?

The right path.

  • Try using a biscuit jar.
  • Let a robo-advisor manage your assets.
  • Starting to invest in shares with a small amount of money
  • Immerse yourself in the real estate market.
  • Joining a company pension scheme.
  • Invest your money in investment funds with low upfront costs.
  • Buy treasury bills safely.

What are the five stages of investment?

  • Step 1: Savings account This is the first savings account you should open when you start earning money.
  • Step 2: Start investing
  • Step 3: Planned investment
  • Step 4: Strategic investment
  • Step 5: Speculative investment

How much would I have to invest to earn $1,000 per month?

Even this high-yield investment may not be the answer you are looking for, as you would need to invest at least $100,000 to earn $1,000 per month. In the case of the safest stocks, you would have to pay almost twice as much to earn $1,000 a month.

What do the rich invest in?

The very rich invest in assets such as private property, commercial property, land, gold and even art. Real estate is a popular asset class in their portfolios because it offsets the volatility of equities.

Which investments are the safest and which offer the best returns?

The best and safest investments for your money

  • High-yield savings accounts.
  • Certificates of deposit.
  • Gold.
  • Government bonds.
  • Series I savings bonds.
  • Corporate bonds.
  • Real estate.
  • Preference shares.

Why is it profitable to invest?

  1. Thanks to compound interest, your money will grow faster over time.
  2. You can get used to it, i.e. you can develop the discipline and persistence that are key to building a legacy.
  3. By saving and investing a fixed amount, you can average your investments, buying more when the market falls and less when it rises in value. This is much more effective in the long run.
  4. Investing gives you the experience and knowledge you need to make more informed decisions. The more familiar you are with different types of products and the more you understand their volatility and potential returns, the easier it is to build a portfolio that suits your needs and risk profile.
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