Investment

An investment is a payment made to acquire the securities of other entities, with the objective of earning a return. Examples are bonds, common stock, and preferred stock.

There are two ways to earn a return on an investment, which are from ongoing payments issued by the investment or through the appreciation in value of the asset.

The concept can also mean the acquisition of fixed assets for internal use, also with the objective of earning a return. This type of investment is much more likely to generate returns through positive cash flows, rather than through appreciation.