After a long time not providing updated articles about forex, this time I will provide information about the full understanding of investment. Business as an economic activity, which aims to make a profit, can be done in the short term, as well as in the long term. One example of a short-term business is trading, while an example of a long-term business is investing. Almost everyone has made an investment, even though they do not directly know the meaning of investment itself. A simple example is when we deposit our money in the bank, then we are already doing an investment business. Why can saving money in a bank be called an investment? Because by saving our money in the bank for a certain period of time, we will benefit in the form of interest from our deposits. Another example of investment activity is buying property such as land or houses. Because over time, the house or land that we own will increase in value, which of course gives us an advantage. With these investment examples, we can indirectly begin to understand the full meaning of investment.

Over time, the investment business is increasingly being carried out by the general public. Especially by people who have good financial condition. The high level of investment is also influenced by the education level of the community, because people who have a high level of education will have more awareness about the importance of investing because they already know the meaning of investment. If the assets owned are not managed, it will not generate profits, whereas if the assets are managed properly, it will definitely bring profits in the future. In the following, I will discuss the full understanding of investment.

Reilly and Brown state that the full understanding of investment is a commitment to bind current assets for some period of time into the future in order to obtain profits / income that is able to compensate for the sacrifices of people who make investments (investors). What is meant by the meaning of investor sacrifice is as follows:

  1. the attachment of assets at a certain time,
  2. inflation rate,
  3. uncertainty of income in the future.

Based on the information above, we can draw the conclusion that actually the complete understanding of investment is an activity carried out by people (investors) who are directly committed to tying their funds/assets to an investment object within a certain period of time, with the aim of benefiting from changes the value of the investment object.

The investment business will be completed when the desired investment time period has been reached. With the end of the investment period, investors will get back the assets that have been invested, by experiencing changes in value, and profits. However, in the world of investment business, no one can guarantee that at the end of the investment period, the investor will definitely benefit from his investment business. This can happen either because during the ongoing investment period, there are events/events that are not in line with what the investor expected. This is called investment business risk. Thus, apart from having to commit to tying up their funds, investors must also be willing to take risks. That was the information about the complete understanding of investment, hopefully it can be useful for you. By knowing the full understanding of investment, hopefully you can invest wisely.

By admin