In lay terms, it refers to the acquisition of an asset for the purpose of creating value over time (in the hope that its terminal value would exceed its initial value, with the additional amount being an investor’s gains). In this context, the word may denote buying stocks or bonds or even a house, but not a physical productive assets such as a plant, equipment, or inventory. The purely financial meaning of investment coincides with this meaning. Therefore, the word “investment” revolves around the purchases of stocks, bonds, derivatives, commodity contracts, and even antiques, artistic masterpieces, and real estate, if the purchaser’s intent is to transfer purchasing power to the future. If these assets serve as stores of value, they are investments for that purchaser.

From an economics point of view, investment refers to the purchase of plant, equipment, inventory and other productive assets by a firm. It also includes an individual’s purchase of a new home.

Investment implies that the preservation and safety of principal (the amount invested) is particularly important.