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What Is An Investment?

Views 87k2022.08.10
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  • An investment is an asset bought in the hope of generating income or profits over time.

  • Investments are made upon the desire for a  greater payoff, but sometimes an investment may carry risks of missing expectations.

  • Learning is a kind of investment, which could be the most common and must thing for individuals new to investing.

Understanding an investment

An investment is like planting a seed. You cultivate it with your time, patience and expect it to grow into a tree with fruit. When you make an investment, you exchange certain resources (like money, time and land) for assets (like stocks, opportunities, areal estate) with the aim of generating returns or increasing value in the future. For example, if you decide to buy shares of Apple, you are expecting that the asset value will grow over time.

In most cases, an investment involves the outlay of money, especially in the investments such as stocks, options, funds and bonds, among others. However, learning that mainly takes up time and attention is also a kind of investment for most people (in hopes of bringing more incomes), which could be the most common and must thing for individuals new to investing.

Investments are made upon the desire for a greater payoff, but sometimes an investment may carry risks of missing your expectation, taking up your resources or shrinking your assets. Therefore, doing due diligence before making investment decisions is necessary to mitigate risks as much as you can.

Example

Back to $Apple(AAPL.US)$'s investment story. Apple has been the long-term leader in smartphone markets in terms of market shares. With the launch of service offerings, analysts rated that Apple's closed-loop ecology is to be further consolidated, which reminds you of Warren Buffet's moat principle.

Assuming several years ago, you have bought 10 shares of Apple at $50 per share. In2021, Apple' stock price has risen to $140 per share. Your 10 shares of Apple now worth $1,400, which means the investmentappreciates$900 in value regardless of taxes, trading fees, and other costs. It's worth mentioning positive returns cannot be guaranteed in all investments, which is the main feature considered while differentiating investments from savings. If you had bought AMC stocks on Jun. 2, 2021, at $78, each share would have been worth only $35.69 as of Aug. 16, 2021. 

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This presentation is for informational and educational use only and is not a recommendation or endorsement of any particular investment or investment strategy. Investment information provided in this content is general in nature, strictly for illustrative purposes, and may not be appropriate for all investors. It is provided without respect to individual investors’ financial sophistication, financial situation, investment objectives, investing time horizon, or risk tolerance. You should consider the appropriateness of this information having regard to your relevant personal circumstances before making any investment decisions. Past investment performance does not indicate or guarantee future success. Returns will vary, and all investments carry risks, including loss of principal.Moomoo is a financial information and trading app offered by Moomoo Techonologies Inc.In the U.S., investment products and services available through the moomoo app are offered by Moomoo Financial Inc., a broker-dealer registered with the U.S. Securities and Exchange Commission (SEC) and a member of Financial Industry Regulatory Authority (FINRA)/Securities Investor Protection Corporation (SIPC).In Singapore, investment products and services available through the moomoo app are offered through Moomoo Financial Singapore Pte. Ltd. ("Moomoo Financial SG") regulated by the Monetary Authority of Singapore (MAS). Moomoo Financial SG is a Capital Markets Services Licence (License No. CMS101000) holder with the Exempt Financial Adviser Status. This advertisement has not been reviewed by the Monetary Authority of Singapore.In Australia, financial products and services available through the moomoo app are provided by Futu Securities (Australia) Ltd, an Australian Financial Services Licensee (AFSL No. 224663) regulated by the Australian Securities and Investment Commission (ASIC). Please read and understand our Financial Services Guide, Terms and Conditions, Privacy Policy and other disclosure documents which are available on our websites https://www.futuau.com and https://www.moomoo.com/au. Moomoo Technologies Inc., Moomoo Financial Inc., Moomoo Financial Singapore Pte. Ltd. and Futu Securities (Australia) Ltd are affiliated companies.
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