Investment: What is investing?

Investing versus saving and speculating

Investing means different things to different people.

Here at PageRussell we use the word “investing” to describe putting your money away for the long-term in an investment where you can expect a link between the short-term volatility risk taken and the long-term return.

Investing is NOT:

• Putting aside some cash for short-term needs. That is “saving”.
• Putting money in assets which do not provide an income and you do not want to sell to fund your lifestyle. We call these “used” assets.
• Putting your money into something where there is no link between risk and reward. That is “speculating.” Some people call this a “fun fund” or “racing money”. It is OK to knowingly speculate, provided you can afford a 100% loss. The problem is that many unwitting speculators think they are actually investing.