The current commitment of money, assets and other resources in the anticipation of future gains and benefits. An investor forgoes current consumption, expecting to receive more value in the future. Therefore, investment constitutes a sacrifice of something of value today in return for future benefits. For example, an individual might buy shares of stock in pursue of future proceeds in terms of income (dividends) and capital gains (price appreciation) that will justify his money and time committed to this investment as well as the risk associated with that. Likewise, companies do invest a wide array of resources (cash, inventory, equipment, fixed assets, etc) in the expectation of profits later.
March 15, 2024
