what is investment

 

Whenever we see these things, what basically we look into? First of all, we should know that, what is investment? Investment is the study of the process; investment is the study of the process of committing funds to one or more assets. It emphasizes certain things, it emphasizes on holding financial assets and the marketable securities, which can be traded in the market; and as well as also most of the people can participate in the market. And this concept also is related to the real assets; real asset in the sense,we take the example of housing, we take the example like a real estate market as well as also certain other related market, which are generally concerned with the intangible factors. So, therefore, investment is not confined to only the physical or the financial assets, it basically also related to some of the real variables, which may not be quantified or may not be signified in a physical manner, but still the investor or the people can use those kinds of assets, before investing in the market situation. So, then here whenever we talk about certain things, we should look carefully about their characteristics; and as well as that certain features, how they are different themselves, how we can say one asset is different from the others. Therefore, here basically if you did talk about the investment philosophy, the investment philosophy is nothing but it is current commitment or the holding of the money of other resources in the exception, in the expectation reaping further benefits, and that will compensate the investor for certain things like the time the investor hold the fund, expected rate of inflation uncertainty of the future.

Let us elaborate this concepts little bit further; what exactly in the investment process or the investment philosophy talks about. The investment philosophy is basically what we do or the investment philosophy what basically explains that one investor invest certain things in the market, expecting that he can get certain return in the future or he can maximize the return in the future. And whenever he takes part in the market, what basically he always sees? He always sees that how much time he will take, and how much time he has before getting the return from the market. And as well as also, he always considers the certain objectives; certain objectives in the sense that whenever we take part in the market, we basically see that if I invest in aparticular asset for certain times, this particular in that particular period, my real returns should be maximized. Then definitely the question comes, how to define this real return? So, basically in the financial world, the real return is  the return adjusted to the inflation. And inflation is a buzzword in the market, all of the people who deal with the financial market, they are very much acquainted with the concept like inflation and basically, which talks about the pricing situation in the market. So here, whenever we  see the market will analyze the return, what basically we see? we get certain return, which is defined as the nominal return; for example, we get a return of 20 percent, and in that particular time, the inflation rate is let 8 percent. Then definitely we see that or we can say that the actual return or the real return of the market is 20 percent minus 8 percent that is 12 percent. So, the investor whenever takes part in the financial market for investment to maximize the return, he always sees that what is this pricing situation that time, by which the return can be maximized, which is adjusted to the inflation rate; and that is why the real return can be maximized. And finally, we talk about the uncertainty; what exactly the uncertainty means, because uncertainty is a word, which is very much related to the concept of the risk; and because whenever we participate in certain markets, the return is not assured;and once we say that the return is not assured, the uncertainty is involved there. There are certain variables, which generally takes part the concept of uncertainty; and whenever the investor basically goes for investing in the market, he should always see the uncertainty, and he should analyze the uncertainty, he should analyze certain factors which are responsible for this uncertainty, then only he can get or he can maximize the return with this given circumstances. So, therefore, these three variables like the time and s well as the macroeconomic prospective, he should see the inflation rate and finally, the uncertainty. These three factors should be taken into account or the investment philosophy always takes into account, before analyzing the return in the market case.

why we study investments; or whenever we talked about investment, what is the basic objective of this? The investment objectives is basically, one is in the real terms or we can say that always everybody wants to maximize their wealth to maximize their particular financing position in the market. So, that is why most the individual’s wants to know wants to study the investments or wants to analyze the investment philosophy to manage their own wealth. How they can maximize their wealth with a given amount of the risk or how they can minimize the risk with a given amount of the return. And another way of reading, we can say reading this investment or studying these investments is that they can make a carrier out of this, because in most of the cases in the financial market, if we analyze the investment in a better way, we can work like a security analyst, it will be also useful to act as an portfolio manager in the different concerting forms in the mutual fund etc then as well as also we can work like a registered representative in the financial organization, and as well as also it is useful for certified financial planner. So, these are basically one way, we can say that we can maximize the wealth, if we know how to manage the investment; and number two - it ialso helpful to make the carrier in a certain way, by that we can make our life more peaceful or more systematic