No matter what the commercials say, there are only three basic categories of investment: ownership, lending, and cash equivalents. They are products that are purchased with the expectation that they will produce income, or profit, or both.

set of actions with the intent of earning profit. In finance, Investment or investing means that an asset is bought, or that money is put into a bank to get a future interest from it. Investment is total amount of money spent by a shareholder in buying shares of a company.

Key Takeaways. An investment involves using capital in the present to increase an asset's value over time. Investment may include bonds, stocks, real estate, or alternative investments. Investments can be diversified to reduce risk, though this may reduce the amount of earning potential.