Invest

Invest means to allocate money or resources with the expectation of future benefit, such as income, capital appreciation, or strategic advantage. The act spans personal finance, business, and public markets. The term comes from Latin investire, meaning to clothe or to furnish; in financial usage it denotes committing capital with the expectation of future return. Commonly, individuals invest to grow wealth over time or to generate income, while institutions invest to meet long-term liabilities. Investing typically involves risk—the possibility that returns will be lower than expected or that capital will decline—and relies on forecasts about markets, economies, and specific assets.

Investments are often categorized by asset class. Equities (stocks) offer potential for growth but come with price volatility. Fixed income (bonds) provide income and capital preservation but credit and interest-rate risk. Real estate involves property ownership or REITs. Commodities, currencies, and alternatives diversify risk. Investors may pursue passive strategies, such as index funds or ETFs, or active strategies, where managers select securities in an attempt to beat a benchmark. Diversification aims to spread risk; a long-term horizon and compounding help increase wealth.

A typical investing process includes defining financial goals and risk tolerance, researching options, considering costs and taxes, and constructing a diversified portfolio aligned with time horizon. Ongoing tasks include monitoring performance and rebalancing to maintain target allocations. Important considerations include fees, liquidity needs, tax implications, and regulatory constraints. Metrics such as return on investment, compound annual growth rate, and risk-adjusted measures help evaluate performance but carry uncertainties.