UK Accounting Glossary
In a business context, investing is the process of committing capital to purchase assets in exchange for the anticipated return from income and/or appreciation of those assets. Thousands of books have been written on investing in stocks, commodities, even art and collectables. There are numerous approaches to investing. In common usage, investing is the process of devoting resources of any type. For example, acquiring new skills is appropriately called investing in oneself. The common usage contains an important subtlety about investing. Resources invested may include not only capital but also time and effort. Not surprisingly, the most sophisticated investors rarely commit funds without first also exercising good judgment about what return can be obtained by potentially devoting expertise as well as money. The venture capitalist and the art dealer are very similar; both are practitioners of such sophisticated investing. Accordingly, many top investment advisors caution against investing money without first investing time to understand the investment opportunity.
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This glossary post was last updated: 9th February 2020.