Abstract
Investment is a term frequently used in the fields of economics, business management and finance. It can mean savings alone, or savings made through delayed consumption. Investment is an activity that is undertaken by those who have savings. Savings is the excess of income over expenditure. However, all savers need not be investors. For example, an individual who sets aside some money in a box for a birthday present is a saver, but cannot be considered an investor. On the other hand, an individual who opens a savings bank account and deposits some money regularly for a birthday present would be called an investor. The motive of savings does not make a saver an investor. However, expectations distinguish the investor from a saver. The saver who puts aside money in a box does not expect excess returns from the savings. However, the saver who opens a savings bank account expects from the bank and hence is differentiated as an investor. The expectation of return is hence an essential characteristic of investment. An investor earns/expects to earn additional monetary value from the mode of investment that could be in the form of physical/financial assets. A bank deposit is a financial asset. The purchase of gold would be a physical asset. Investment activity is recognized when an asset is purchased with an intension to earn an expected fund flow or an appreciation in value.
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