• The term investing can be associated with various activities but the common aim of these activities is to make the funds invested during the time period generate more wealth.
    • Investing should help enhance the investor’s wealth.
    • The sources of funds to be invested include assets already owned, savings, and borrowed money. To invest requires that you save first. You forego today’s consumption.
    • Individuals and businesses can put their money in real or financial investments.
    • Real investment generally involve some kind of tangible asset for example real estate such land, a house; factory, machinery, etc. Financial investments involve contracts (in paper form or e-contracts) as stocks, bonds, etc
  • Speculation: It involves purchasing the saleable securities whose prices are likely to increase rapidly within a short term horizon so that they get a quick profit. Speculators are always looking for and buy at low prices and sell at dear ones.
  • Types of investors:  Two types of investors: individual and institutional investors. 
    • Individual investors (sometimes called retail investors) are individuals investing on their own.
    • Institutional investors are entities such as commercial banks, insurance companies, investment companies, pension funds and other financial institutions.

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