The act of investing has the goal of generating income and increasing value over time. An investment can refer to any mechanism used for generating future income. This includes the purchase of bonds, stocks, or real estate property, among other examples. Additionally, purchasing a property that can be used to produce goods can be considered an investment.

In general, any action that is taken in the hopes of raising future revenue can also be considered an investment. For example, when choosing to pursue additional education, the goal is often to increase knowledge and improve skills. The upfront investment of time attending class and money to pay for tuition will hopefully result in increased earnings over the student’s career.

Types of Investments and what feeco does.

• Stocks/Equities
• Bonds/Fixed-Income Securities
• Real Estate
• Index Funds and Mutual Funds
• Commodities
• Cryptocurrency
• Investments and Risk

The investment return and risk should have a positive correlation in its simplest form. If an investment carries high risk, it should be accompanied by higher returns. If an investment is safer, it will often have lower returns.

When making investment decisions, investors must gauge their risk appetite. Every investor will be different, as some may be willing to risk the loss of principle in exchange for the chance at greater profits. Alternatively, extremely risk-averse investors seek only the safest vehicles where their investment will only consistently (but slowly) grow.

Investments and risk are often strongly related to prevailing conditions in the investor’s life. As an investor approaches retirement, they will no longer have stable, ongoing income. For this reason, people usually choose safer investments towards the end of their working career. On the other hand, young professionals can often bear the burden of losing money as they have their entire career to make that capital back. For this reason, younger investors are often more likely to invest in riskier investments.