investment n
1. the act of investing; laying out money or capital in an enterprise with the expectation of profit [syn: investing]
2. money that is invested with an expectation of profit [syn: investment funds}]
3. outer layer or covering of an organ or part or organism
4. the act of putting on robes or vestments
5. the ceremonial act of clothing someone in the insignia of an office; the formal promotion of a person to an office or rank [syn: investiture]

Investment \In*vest"ment\, n.
1. The act of investing, or the state of being invested.
2. That with which anyone is invested; a vestment. Whose white investments figure innocence. --Shak.
3. (Mil.) The act of surrounding, blocking up, or besieging by an armed force, or the state of being so surrounded. The capitulation was signed by the commander of the fort within six days after its investments. --Marshall.
4. The laying out of money in the purchase of some species of property; the amount of money invested, or that in which money is invested. Before the investment could be made, a change of the market might render it ineligible. --A. Hamilton. An investment in ink, paper, and steel pens. --Hawthorne.

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Investment is putting money into something with the hope of profit. More specifically, investment is the commitment of money or capital to the purchase of financial instruments or other assets so as to gain profitable returns in the form of interest, income (dividends), or appreciation (capital gains) of the value of the instrument.

Investment comes with the risk of the loss of the principal sum. The investment that has not been thoroughly analyzed can be highly risky with respect to the investment owner because the possibility of losing money is not within the owner's control. The difference between speculation and investment can be subtle. It depends on the investment owner's mind whether the purpose is for lending the resource to someone else for economic purpose or not.

In the case of investment, rather than store the good produced or its money equivalent, the investor chooses to use that good either to create a durable consumer or producer good, or to lend the original saved good to another in exchange for either interest or a share of the profits. In the first case, the individual creates durable consumer goods, hoping the services from the good will make his life better. In the second, the individual becomes an entrepreneur using the resource to produce goods and services for others in the hope of a profitable sale. The third case describes a lender, and the fourth describes an investor in a share of the business. In each case, the consumer obtains a durable asset or investment, and accounts for that asset by recording an equivalent liability. As time passes, and both prices and interest rates change, the value of the asset and liability also change.

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