INVESTMENT MANAGEMENT
Description
1.0 INTRODUCTION
The term „investing" could be associated with different activities, but the common target in these activities is to „employ" the money (funds) during the time period seeking to enhance the investor"s wealth. Funds to be invested come from assets already owned, borrowed money and savings. By foregoing consumption today and investing their savings, investors expect to enhance their future consumption possibilities by increasing their wealth. However, it is always useful to make a distinction between real and financial investments. Real investments usually involve some kind of tangible assets, such as land, machinery, factories, etc. Financial investments involve contracts in paper or electronic form, such as stocks, bonds, etc.
An investment is the current commitment of rupee for a period of time in order to derive future payments that will compensate the investor for; (1) The time the funds are committed, (2) The expected rate of inflation, and (3) The uncertainty of the future payments. The "Investor" can be an individual, a government, a pension fund, or a corporation. Similarly, this definition includes all types of investments, including investments by corporations in plant and equipment and investments by individuals in stocks, bonds, commodities, or real estate. In all cases, the investor is trading a known rupee amount today for some expected future stream of payments that will be greater than the current outlay .
1.0 MEANING OF INVESTMENT
Investment activity involves the use of funds or savings for acquisition of assets & further creation of assets. Investment is an employment of funds on assets in the aim of earning income or capital appreciation.
“Investment analysis is the study of financial securities for the purpose of successful investing.
“An investment is the purchase of goods that are not consumed today but are used in the future to create wealth”.
“An investment is a commitment of funds make in the expectation of some positive rate of return”. Example – equity shares, preference share and debentures etc.
According to oxford dictionary “investment is defined as the action or process of investment money for profit”.
According to keyness “investment is define as the addition of the value of the capital equipment which has resulted from the productive activity of the period”.
DEFINITION
1.0.1 Definition-Economic sense
“Investment means the net additions to the economy"s capital stock which consists of goods and services that are used in the production of other goods and services” (Capital formation).
Investment is the net addition made to the nation"s capital stock that consists of goods and services that are used in the production process. A net addition to the capital stock means an increase in the buildings, equipments or inventories. These capital stocks are used to produce other goods & services
Definition–Financial sense
“Investment is a commitment / employment of funds made in the expectation of some positive rate of return. If the investment is properly undertaken, the return will commensurate with the risk that the investor assumes”. - Donald E. Fischer and Ronald - J. Jordan
Financial investment is the allocation of money to assets that are expected to yield some gain over a period of time. According to keyness “investment is define as the addition of the value of the capital equipment which has resulted from the productive activity of the period”. "Sacrifice of certain present value for some uncertain future value"– WILLIAM F. SHARPE
"Purchase of a financial asset that produces a yield that is proportional to the risk assumed over some future investment period"– F. AMLING
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