Investment

Investment or investing is a term on saving or deferring consumption. An asset is usually purchased, or equivalently a deposit is made in a bank, in hopes of getting a future return or interest from it.

A major difference in the use of the term investment between the economics field and the finance field is that economists refer to a real investment (such as a machine or a house), while financial economists refer to a financial asset, such as money put into a bank or the market, which may then be used to buy a real asset.

Business Management
The investment decision is one of the fundamental decisions of business management: managers determine the assets that the business enterprise obtains; these assets may be physical , intangible, or financial. Whatever the type of asset, the manager must assess whether the net present value of the investment to the enterprise is positive; a net present value is calculated using an enterprise's marginal cost of capital.

Economics
In Economics, investment means a purchase of capital goods, goods which are not consumed but instead in future production. Examples include building a railroad, or a factory, clearing land, or putting oneself through college. The investment function in that aspect is divided into non-residential investment and residential investment.
Investment is often modeled as a function of income and interest rates. An increase in income will encourage higher investment, whereas a higher interest rate may discourage investment as it becomes costlier to borrow money. Even if a firm chooses to use its own funds in an investment, the interest rate represents an opportunity cost of investing those funds rather than loaning them out for interest.

Finance
In finance, investment means buying securities or other monetary or paper assets in the money markets or capital markets, or in fairly liquid real assets, such as gold as an investment, real estate, or collectibles. Valuation is the method for assessing whether a potential investment is worth its price.
Types of financial investments include shares or other equity investment, and bonds . These investments assets are expected to provide income or positive future cash flows, but can increase or decrease in value giving the investor capital gains or losses.
Trades in contingent claims or derivative securities do not necessarily have future positive expected cash flows - so are not considered to be assets, or strictly speaking, securities or investments. Nevertheless, since thecash flows are related to those of specific securities, they're often studied as or treated as investments.
Investments are often made through intermediaries, such as banks, mutual funds, pension funds, insurance companies, collective investment schemes, or even investment clubs. Though their legal and procedural details differ, an intermediary generally makes an investment using money from many individuals, each of whom receives a claim on the intermediary. When people retire on a private pension, they use the fund they have built to buy an annuity - a financial vehicle that pays them an income until death. How high that income is depends on two factors - how big the fund is and what rate the annuity will pay.

Personal finance
In personal finance, money purchases shares, to be put in a collective investment scheme or used to buy an asset with an element of capital risk. Saving in personal finance refers to money put aside, normally on a regular basis. This distinction is important as investment risk can cause a capital loss when an investment is realised, unlike saving where the more limited risk is cash devaluing due to inflation.
In many instances the term saving and investment are used interchangeably. For example many deposit accounts are labeled as investment accounts by banks for marketing. To help establish if an asset is saving or an investment you should consider where your money is invested.

China Investment

Investment by Chinese businesses surged in the first five months of the year according to new official figures - by 30 per cent compared with the same period in 2005. The figure is further evidence that China's economy might be growing too fast, and a central bank official has expressed some concerns. A senior official in the Chinese central bank said they will, as he put it, "remove fuel from the fire", to reduce the risk. The idea is to constrain commercial banks' lending. Banks that lend too much may be required to buy low interest financial assets, reducing the amount they have available to lend to business.

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