Investment doesn’t have a single brief definition it is rather a broad bearing to the economy and the business organization. Any new capital accumulation into the organization is an investment. The value of the organization’s machinery, plant, building etc. is its investment. In more simple terms investment is the purchase of the financial assets although the concept of some economists differs from financial investment from real investment. Some theories give a more brief idea on investment saying, investment is a conscious decision on an entity to deploy money on it as a security issued by a financial institution in order to obtain larger returns from it in the longer run. This not only increases the value of the asset but also provides ongoing income coming from it. Now, this might be a collective description of a broader term because there are at least eight well-known types of investment recognized by organizations around the world.
The various types of investment include:
Autonomous investment – the investment that doesn’t change with the variation of the income, it remains constant on the assets such as a house or a public building. This type of investment is usually carried out by the state on the infrastructure of the economy.
Induced investment- this is rather opposite to autonomous investment, it varies with the change in income. The more the investment more the income and more consumption, it tends to increase the demand.
Other types of investments are; financial investments, real investment, planned investment, unplanned investment, gross investment and net investment.
Each of the type of investment has its own outcome or return and is important for the financial aim of the organization. Investment is important for the financial security of the organization; it is not easy to secure money in the bank account thus the act if investing is carried out by the organizations. Investing in stock or other entities provide easy returns, not just organization but individuals all over the world purchase shares and secure their income for long period of time. Although with the fluctuation of the stock marker investment is never without risk of loss. No matter how big or small it’s running premises are, no organization can proceed without investment, the risk of attaining an investment is better not investing at all. The invested financial security tends to help the organization when there are unplanned business needs and financial crisis.