Investing Is taking a risk with a portion of your savings such as by buying stocks or bonds , in hopes of realizing higher long-term returns. Unlike bank savings, stocks and bonds over the long term have returned enough to outpace inflation , but they also decline in value from time to time. The rate of returns and risk for savings are often lower than for other forms of investment. Return is the income from an investment. Risk is the uncertainty that you will receive an expected return and preservation of capital.
Savings are also usually more liquid.
That is, you may quickly and easily convert your investment to cash. The decision about which investment to choose is influenced by factors such as yield, risk, and liquidity. Investments may produce current income while you own the investment through the payment of interest, dividends or rent payments. When you sell an investment for more than its purchase price, the profit is known as a capital gain, also called growth or capital appreciation.