concept of investment

1. in general investment means the purchase of shares securities and any sorts of assets. but in economics such activities are only known as transfer of ownership because this sort of investment does not increase the aggregate income and employment. therefore, such investment-is known as financial investment because this won't increase real investment. but in economics any transaction that increase the real capital and yields additional income is known as investment. for this reason money invested in the purchase of shares and securities of different companies cannot be taken as investment. such transactions don't increase the national income and national capital. thus any economic replication with the use of additional capital which increases the capacity of national production and additional income is known as investment.so, investment is the increase in supplant of capital which helps in the increase in the production and productivity. so , to spend on shares of different industries fixed capitals such as machinery and building, preparation of consumption goods by employing various raw materials, expenditure on development and construction, etc. area known as investment.
2. investment means increase in the real capital fund. in other words investment is that part of the income which is spent to earn more income with the employment of capital goods. all the expenditures that her involved when establishing new factories, increasing the efficiency of old factories, improvement and expansion of transportation, construction of various buildings, etc. are taken to be investment. investment is also analyzed from individual as well as social point of view as the analysis of saving. personal investment is also of two types. they are:
3. 1. financial investment
4. when an individual uses the personal saving in purchasing shares and securities or bonds of any existing companies then that is known as financial investment. financial investment does not increase the quantity of real capital in the society because in such investment one does the selling and the other doer the purchasing. this won't increase the aggregate investment.
5. 2. real investment
6. if an individual uses the savings in a new company or construction of a new building instead of purchasing old shares and debentures of existing companies, then this will increase the real capital. this is known as the real investment. the main objective of real investment is to increase the capital assets and the amount of goods.