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Introducing about Investment

 


  Investment has become more common among the young generation. They believe that investing can make more money or as a passive income. Well is not totally wrong, however, investment is something value purchased to make more money. The term investment is often applied to stocks, bonds, and other financial instruments, investments also commonly include real estate, artwork, gold, collectibles, and even wine. Keep in mind that there are risks involved with investing. 

  Investing involves putting money into something that has the potential to return a profit. It typically gives a financial stake in the company or other asset in which they invest. There are four common types of investments, so let's have a look closer.

  Stocks. This is the common investment where the companies sell shares of stock to the public to raise money for their operations. Buying a stock means you own a piece of the company. If the company is profitable, your stock will increase in value, and in some cases, you may also be paid a dividend. On the other hand, if the company is unsuccessful, you can lose money as your stock drops in value. Keep in mind that stock is a high-risk investment.

  Commodities. It includes agricultural products, oil, gas, and other energy products and metals such as gold and silver. Their value fluctuates based on market demand. Let's say if there is a shortage of oil, the price of oil will increase and the investment will rise in value. Some people think this investment is quite safer than stock. 

  Bonds. Companies and nations sell bonds to raise money. If people buy a bond, they're making a loan to the company or country. They will receive an interest payment over a fixed period of time. Bonds tend to be less risky than stocks, but the return may be lower. 

  Real estate. Buying homes or a piece of land can be an investment in real estate. The risk varies for real estate investments. Property values can be affected by crime rates in a neighborhood. Real estate investment has always increased the value but it takes a lot of time to get sold.

  Now we do know about investment instruments but why investment is very important? Well, investment ensures present and future financial security. It allows us to grow our wealth and at the same time generate inflation-beating returns. Furthermore, investments have the potential to meet personal financial goals, such as purchasing a house, retirement, and building an emergency fund. 

  The investment choice depends on several factors like risk capacity, age, investment horizon, and financial goals. Make a wise choice for yourself. It will be better to invest after conducting proper research and understanding your investment options. So, begin your investment journey now! Thank you for your time and have a nice day 😀. Happy investing!


References:

  1. What Is an Investment? (2022). Available at: https://www.thebalance.com/what-is-an-investment-5090542.
  2. Why is Investing Important and Where Should One Invest - ICICIdirect (2022). Available at: https://www.icicidirect.com/knowledge-center/article/why-is-investing-important-and-where-should-one-invest.
  3. Investing | What Does It Mean & How Does It Work? (2022). Available at: https://www.annuity.org/personal-finance/investing/.
  4. Top 5 Reasons Why Investing Is Important (2022). Available at: https://dividendearner.com/why-investing-is-important/.
  5. Management, P. (2022) PT Yuanta Sekuritas Indonesia | What is an Investment?, Yuanta.co.id. Available at: https://www.yuanta.co.id/post/what-is-an-investment.


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