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What is Investment definition/concept

Investments are actions carried out with the purpose of obtaining profit or benefit. So, for example, an investment involves an outlay of money equivalent to a value in exchange for an amount of greater value. Investments are a common practice in a market economy that allows resources to be mobilized relatively easily and efficiently from less productive sectors to more productive ones. Investment

An investment can cover the entire production chain of an economy. However, the area that studies these processes in more detail is the one specialized in the capital market . In fact, a continuous process of capital circulation involves a detailed study in order to obtain a profit and avoid a loss from any point of view. In this sense, there are some widely used strategic approaches that facilitate this task and certainly are not exempt from any controversy. Investment

One of them is called fundamental analysis, which focuses on knowing the intrinsic value of an asset. When we look at a certain asset, such as a stock, we see its price changing in the market. The person dedicated to fundamental analysis thinks that perhaps it has a different price than it should have; a value that tends to adjust at any time. Thus, it seeks to find out in the company’s balance sheets, its usual profits and debts in recent years and its relationship with the competition; with these data, an evaluation of the company and the value of its share can be obtained to identify whether it is cheap in relation to the price that the market assigns. Investment

The other approach is called technical analysis . This is based on the price to be discounted, and if we look at its evolution on a graph, we can see patterns that repeat over time. Thus, when this type of analysis is carried out, it is sought to identify these patterns to predict a trend in the price of the product in question.

However, in the investment world, there are several objections to both positions as a consequence of a theory regarding the behavior of markets. According to this theory, the market behaves in an efficient way and it is impossible to obtain a return, where prices manifest all the known information .

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