Name : Reynaldi Priyadi Simbolon

NPM : C10190193

Definition of Investment
Investment is a term with several meanings relating to finance and economics, the term relates
to the accumulation of an asset in the form of an expectation of future benefits. Sometimes,
investment is also called as capital investment. Investment is a commitment to a number of
funds or other resources made at this time, with the aim of obtaining a number of benefits in
the future. The term bia investment is related to various activities. Invest some funds in real
assets (land, gold, machinery or buildings) and real financial assets (deposits, stocks or bonds).
Investment is one of the components forming economic growth. Simply stated, investment is
defined as the expenditure of capital goods directed to support production activities or
expansion of production (Samuelson and Nordaus). This makes investment have a broad
multiplier effect because it not only encourages the production side, but also stimulates the
consumption side.
In some investment products known as securities or securities. The definition of effect is an
instrument of ownership that can be transferred in the form of securities, shares or bonds,
proof of debt (promissory notes), interest or participation in a collective agreement (Rights),
guarantee to buy shares in the future or instruments that can be traded .

Investment From Business Scope Based on the scope of doing business, investment is divided into two
types including the following:

1. Investment in Real Assets Real Asset Investment is any investment in physical form that can be seen.
Examples such as building a house, building a factory, or by buying gold, gems, diamonds and so forth.

2. Investment in financial assets Investments in Financial Assets are all investment actions in the form of
securities. Examples such as stocks, bonds, bonds and so forth. In investing in financial assets, there are
two events including the following:

• Direct Investment, namely by having the securities of the owner of the letter. An example is
Stock.

• Indirect investments, i.e. investments in the form of securities management represented by

From the explanation about investment above, we can conclude that in general the investment
objectives are:

1. Get a fixed income in any given period of time. For example, such as royalties, interest, rent,
and so on, which of the income can be used for investors' living needs.
2. Getting special funds, for example, these funds are used to expand businesses, social needs,
and so on.
3. Obtain market guarantees to sell products that have been produced and guarantee the
availability of raw materials.
4. Control the company, through ownership of the company's assets.
5. Reducing competition between companies engaged in the same field.
6. Maintain good relations between companies and branch companies.
7. In general, investment objectives are indeed looking for profit. The short-term investment
objectives are:

• Take advantage of excess cash flow for a while

• Obtain additional funds

While the long-term investment objectives, namely;

1. To obtain a fixed income in each period, such as interest, royalties, dividends, or rent and
others.
2. To establish a special fund, for example funds for social purposes.
3. To control or control another company, through ownership of a portion of the company's
equity.
4. To guarantee the availability of raw materials and get a market for the products produced.
5. To reduce competition between similar companies.
6. To maintain relationships between companies.

The following are the objectives of an investment activity in general;

• Obtain future earnings or returns from both the real and financial sectors. For the short term it
is usually obtained from the financial sector, while for the long term it is from the real sector.

• Reducing or suppressing inflation.

• In addition to earning income, this investment activity can reduce inflation, because with the
investment activities the money in circulation can be utilized for productive activities so as to
reduce consumptive activities.

Investment Benefits Some of the benefits that can be obtained from investing are as follows:

1. Can Increase Assets

2. Can Meet the Needs of Life in the Future

3. Life Becomes More Economical

Types of Investment Some financial investments, for example, are as follows:

1. Deposits
Investors will invest funds with a certain period, but generally short-term and earn profits in the
form of interest. The amount of interest on each deposit depends on the risk.
2. Stocks
Stock shares are assets owned by a company. For example, when we own 70% of the shares of a
company, then just as we own 70% of the company's assets. Shares can be in the form of
securities owned by a company that shows ownership of the company. This stock can be sold
with certain terms and conditions.
3. Bonds
A bond is a proof of debt statement. That is proof that someone has given debt to a company or
institution. so the debtor will pay interest within a predetermined period, usually more than 12
months. The advantage of bonds is that they can provide a fixed income and a large interest
when compared to deposits. The disadvantage is when the debtor goes bankrupt so he cannot
repay the debt and of course will have a long enough period to pay it off.
4. Mutual funds
Mutual funds are a place to collect funds collectively or together. The funds collected will be
managed by investment managers, who later the funds collected will be invested. Gains or
losses will be shared by the collective member.
5. Saving money
Saving money is an activity to save money in a bank so that when the money has been collected
can be used by savers later on when needed.

So we can conclude that investment is investing funds or capital at this time, and from these
investments can be enjoyed in the future.