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Investing is the process of buying an asset with the aim of making a profitable ‘return’ from that purchase over a period of time.
The return might come in the form of income, such as rent (in the case of a property purchase), or from dividend payments (in the case of shares, see more below).
There may also be the potential for capital growth. For example, when the value of a property increases, or when a company’s share price rises compared with the asset’s price at the initial time of purchase.
Investment is not the same as saving, where you put money on deposit and receive interest. With an investment, the money used to make the original asset purchase is at risk if, say, a company performs badly and its share price falls in value.
Investing in stocks and shares specifically allows investors to buy and own part of a…
