Investment Definition and Legal Meaning

On this page, you'll find the legal definition and meaning of Investment, written in plain English, along with examples of how it is used.

What is Investment?

It refers to the asset or money which are put into bonds, shares, property or to utilise those funds in a business with expectation of future profit.

History and Meaning of Investment

Investment is a popular term in the world of finance and refers to the act of investing money for future returns. Its history can be traced back to the Babylonians who made investments as early as 2000 BC. Over time, the concept of investment evolved into a more structured process with stocks, bonds, real estate and more being established ways of investing.

Investment in its current context means putting funds into stocks, bonds, real estate or a business with the goal of achieving long-term growth and future returns. Historically, Investment was only accessible to a small group of wealthy individuals, but with the introduction of online investment avenues, investing has become much more approachable and accessible to the general public.

Examples of Investment

  1. Individuals can invest their money in stocks to hope for long term capital appreciation and profits.
  2. A company may invest in a market research firm to learn more about its market and customers.
  3. A real estate investor may invest money in a rental property in order to earn rental income and also profit from appreciation over time.
  4. A venture capitalist may invest in a start-up company to get a stake in the company in expectation of future profits.

Legal Terms Similar to Investment

  1. Securities: Refers to stocks, bonds, or other financial instruments that can be bought and sold.
  2. Portfolio: A collection of investments held by an investor.
  3. Dividend: The portion of profit earned by a company that is distributed to its shareholders.