The purpose of the investment is to increase the wealth

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When someone invests in buying assets then he expects it will give the benefits in future. These benefits can be in the form of enhancing asset value or in the form of income.

 Purpose of investment:

Investment gives the scope of earning regular income. It will also lessen the pressure of tax liability.  If someone invests in their assets or wealth then it will be multiplied in return.

Types of investment:

There are different types of investment in the financial market. These are stocks, bonds, options etc.

Investors like to hold the company’s share for the different time period hoping that it will give more income in future.

Bonds are different entities of municipality, government and corporation. These give a regular dividend to the investor who buys bonds.

Option gives the right to the buyer to buy and sell the underlying assets without any obligation at a specific price .People use it as a source of earning income.

The difference between the trading and investing:

Trading needs to hold the money for the short term and the investing needs a longer time period to get return .The people who are adventurous, they like trading but the people who like to take less risk should go for investing.

Types of investors:

There are several types of investors. They are pre investor, active investor and passive investor, angel investor, personal investor.. Pre investors are not fit for investing. They have hardly any financial consciousness. Passive investors like to use all the financial knowledge on their personal financial planning. Such as buying a home, saving etc. Active investors use their wealth just like running a business by upgrading their financial understanding. At the initial stage of business owners like to take suggestions from friends, family members, they are called the personal investor. Angel investors are those who use their money at the small business.

The criteria to be successful in investment:

Those who want to be successful in investing, they should stick to their plan no matter how volatile the market is.  Diversification is one of the most important ways to be successful in investing at Diversification does not assure gain or help in avoiding loss. But the shares, securities, bonds can be diversified in different regions, sectors, sizes. Before jumping into the investment in the stock, one needs to analyse the market. Investors need to cut his loss as soon as possible.

Is investment good or bad:

If you like to see that your wealth grows after a long period then investing is a good option. But if you need money as soon as possible then investing is not good for you.

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