Investment Analysis
Branches of knowledge knol series
Investment Analysis deals with investment decision making.
Investment has many definitions, explanations and usage.
Reilly and Brown defined investment as deployment of savings in such a way that the amount increases over a time. This they contrasted with storing the savings below the mattress in which case the amount remains the same.
Investment can be done in physical assets or financial assets. Investment analysis as a popular subject deals with investment in securities (financial). But nowadays popular subjects like real estate investment analysis also are available.
Investment, speculation and gambling can be differentiated and were differentiated by many authors.
Investment has a low risk attached to it. The risk is not zero but it is relatively low risk. Speculation has high risk and there is high probability that the entire capital committed to the transaction or portfolio can be lost.
Gambling is creation of games based on chance. The risk is high and the risk is not a natural risk that somebody or other has to bear in the society. They are created opportunities for chance gains and losses.
Benjamin Graham is hailed as the dean of security analysis or investment analysis. Warren Buffett studied and worked under Bejamin Graham
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