Every individual saves some part of his or her income for any unexpected situation. In addition to this, saving is also important for every person as an sufficient amount of money in the account after retirement will ensure a better and tension free life. But putting money just in the locker is considered as a dead investment as the saved amount will not grow. Investment has been categorized by financial experts and economists. It must be clearly established that investment involves a long-term commitment.
Investment management can be defined as purchase and sale of investments within a portfolio. The area of investment management is quite wide which includes banking, budgeting activities and taxes; but in general perspective, investment management refers to the trading of securities and portfolio management to attain some desired goals.
Financial and Economic Meaning of Investment:
Investment is the allocation of monetary resources to assets that are expected to some gain or positive return over a given period of time. These assets range from safe investments to risky investments. Investments in this form are also called ‘Financial Investments’.
From the point of view of people who invest their funds, they are the suppliers of ‘Capital’ and in their view, investment is a commitment of a person’s funds to derive future income in the form of interest, The financial and economic meaning of investment are related to each other because investment is a part of the savings of individuals which flow into the capital market either directly or through institutions, divided in ‘new’ and second-hand capital financing. Investors as ‘suppliers’ and investor as ‘users’ of long-term funds find a meeting place in the market.
Longer life expectancy or planning for retirement, increasing rates of taxation, high-interest rates, high rate of inflation, larger incomes and availability of a complex number of investments.