Investment Focus

Saving and Investing is hard work. Not only do you have to try to invest properly, but you'll be faced with a mountain of advice and a myriad of options. Hard indeed.

Our hope is that this group will become a hub of information that will allow others to learn from mistakes as well as ask professionals advice.

Ultimately, we know there is an army of Investors out there that want to know how to invest and we want them to be here, discussing and chatting to make it an easier mountain to climb.

The three barriers to entry are: Not enough money, time or knowledge. We'll all try and help you to smash through all those barriers.

Investment has different meanings in finance and economics.

In economics, investment is related to saving and deferring consumption. Investment is involved in many areas of the economy, such as business management and finance whether for households, firms, or governments.

In finance, investment is putting money into something with the expectation of gain, usually over a longer term. This may or may not be backed by research and analysis. Most or all forms of investment involve some form of risk, such as investment in equities, property, and even fixed interest securities which are subject, inter alia, to inflation risk.

In contrast putting money into something with a hope of short-term gain, with or without thorough analysis, is gambling or speculation. This category would include most forms of derivatives, which incorporate a risk element without being long-term homes for money, and betting on horses. It would also include purchase of e.g. a company share in the hope of a short-term gain without any intention of holding it for the long term. Under the efficient market hypothesis, all investments with equal risk should have the same expected rate of return: that is to say there is a trade-off between risk and expected return. But that does not prevent one from investing in risky assets over the long term in the hope of benefiting from this trade-off. The common usage of investment to describe speculation has had a effect in real life aswell: it reduced investor capacity to discern investment from speculation, reduced investor awareness of risk associated with speculation, increased capital available to speculation, and decreased capital available to investment.

In finance, investment is the application of funds to hold assets over a longer term in the hope of achieving gains and/or receiving income from those assets. It generally does not include deposits with a bank or similar institution. Investment usually involves diversification of assets in order to avoid unnecessary and unproductive risk.

In contrast, pound cost averaging and market timing are phrases often used in marketing of collective investments and can be said to be associated with speculation.

Happy investing and best of luck!