Tuesday, September 23, 2008

what is an investment

Investment is the sacrifice of current money for future benefits. There are two basic characteristics of investment, viz risk and time. Depending upon the type of investments one becomes dominant over the other. For example in government bonds etc time is a dominating factor,while in case of stock related options risk is more dominating.
An investment mode can be judged on the following parameters:
1. Rate of return.
2. Risk
3. Marketability.
4. Tax.
5. Convenience.
Depending upon these factors a proper investment is chosen according to need.