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What Does The Term Investment Mean?

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What does the term investment mean to the everyday individual? Investment by definition, generally, refers to putting money to some type of use through either a purchase, or an expenditure that in turn offers a potential for a return that is profitable. For example, an individual sells a business and realizes a net gain of two hundred thousand dollars; this individual has a plethora of choices concerning this gain in funds. First, he can place the monies in a traditional bank account, usually at a low rate of interest, which is figuratively speaking referred to as sitting on the money, or the individual could utilize the funds for the basis of investment in the stock market with a potential to earn a greater percentage interest rate over a period of time. Of course, an investment and the creation of a stock portfolio offer the potential for the greater return value. However, this course of action requires careful considerations because as Maranjian (2013) reports that in financial concerns there always exist a definite correlation between a return and a risk with a risk representing the potential of money loss, and return the profit driven aspect of an investment.

Additionally, the individual must realize that thorough comprehension of financial terms is an imperative. As Charlie Wells (2013) acknowledged in his Wall Street Journal article information related to investments often appears in both percentages, as well as dollar amounts in both conversations and
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