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  • What is investment?


    In a

    transaction,

    something

    is exchanged for

    something else.

     

    To this,

    we can add

    the concept of time.


    This splits

    the concept of transaction

    in two:


    In a

    barter transaction,
    something

    (in the present)

    is exchanged for


    something else

    (also in the present). 

    In an

    investment transaction,
    something

    (in the present)
    is

    exchanged

    for
    something else

    (in the future).  



    Note that,

    by adding

    the concept of

    time,

    we also add

    the concept of

    risk.

    (The present is certain – but the future is uncertain.)