The dictionary states that investing is "to put (money) to use, by purchase or expenditure, in something offering potential profitable returns, as interest, income, or appreciation in value." Somewhat similarly, I like to define investing as an investor supplying capital to an investment market with an expectation of a future return. The expected return is dependent upon the market that is invested in and the risk commensurate with that market.
Many investment "managers" or "professionals" use the term investing to disguise purchasing of a product, gambling, or other types of irrational speculation. They claim to know better than the aggregate knowledge of publicly traded markets or have access to pricing "mistakes" that few others are aware of. Achieving investment returns greater than the market are only possible when taking on above market risk. This increased risk often becomes inappropriate to the point that investing has morphed into speculating or betting. The majority of the investors I know do not have the means or desire to take these type of risks with their savings or future retirement assets. As I continue to share my thoughts on investing, I will expand on ways to actually implement these ideas.
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