What Is Investment? See Here The Explanation

For entrepreneurs, of course already familiar with the name of investment. So for those of you who are not entrepreneurs, already know what is meant by investment or is there a desire for you to invest? Now in this article, we will understand it more deeply. Come on, we see the explanation together.


Definition of Investment

In general, the definition of investment is the investment of assets or funds carried out by a company or individual for a certain period to obtain greater return. Etymologically, investment comes from the word invest

Investment has a very important role in the economy both domestically and abroad every year. Investors are known as investors, these investors will invest in the form of providing good security guarantees, labor costs and others.

Types of Investment

Investment is an activity that is often done by many people, especially those working in the business world. But investing alone is not a simple thing. Even investment activities themselves have several different types. And here are some types of investment.

Investments are divided into several types and the following are based on assets

• Investments in financial assets: These investments can be further divided into two. First, investment in financial assets carried out on the money market, for example in the form of certificates of deposit, commercial paper, money market securities, and others. The second investment in financial assets made in the capital market, for example in the form of shares, bonds, warrants, options, and others.

• Investment in real assets: This investment is realized in the form of purchasing productive assets, building a factory, opening a mine, opening a plantation and others.

Type of Investment Based on Its Form

• Direct investment. Investors buy and sell part of the investment directly without having to use investment companies or mutual funds. This investment makes investors have control over the daily activities of the company. The investor must be present directly when making this investment so that he knows the owner of the company directly.

• Indirect investment. Investors buy and sell part of their investments through investment companies or mutual funds in the form of securities portfolios. Investors are not directly involved and do not have control over daily activities, but only as shareholders and do not need to be physically present in the investment activities undertaken.