To put it in layman’s terms, an investment occurs when existing monetary resources are used to generate more money. Any form of purchase of financial products or valuable items, with the expectation of generating favourable returns in future is known as an investment. Such investments can be made in property, equities, shares and bonds, among others. Investments made in stocks, bonds, real estate or cash are clubbed under traditional investments. Other types of investments made in commodities, precious metals, hedge funds and so on fall under the category of alternative investments. The term investment should not be confused with speculation, with the latter referring to the act of putting money into an event with the expectation of deriving any type of short-term gain. Hide this