Understanding What is an Investment PDF Print E-mail
Written by The RupeeManager Team   
Friday, 09 December 2011 22:26
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For those who want to get started on their investment journey, there are some frequently asked questions and doubts. It goes like this, what is an investment, why should we invest, how to invest, how to buy stocks, etc.

These are very basic questions but we are faced with such queries every day. Relevant links: Get started on Investing or The basics principles of Investing. Let's start with understanding what is an investment.

The dictionary meaning of investment is :

  • The action or process of investing money for profit or material result.
  • A thing that is worth buying because it may be profitable or useful in the future.
  • Another important reason why we need to invest is that we need to outrun inflation. Rs 1000, if left un-invested would lose value as the things you buy in Rs 1000 today will cost Rs 1100 next year assuming an inflation rate of 10%.

    So you need to invest Rs 1000 so that it grows more than Rs 1100 by next year so that the value of your money does not diminish.

    We will cover some basic questions on how to invest smart and how to buy stocks in the coming articles. Stay tuned

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