Investment banks may also provide guidance to companies who are considering issuing shares publicly for the first time, such as with an initial public offering (IPO). In an investment, you are providing some individual or entity with funds to be put to work growing a business, starting new projects, or maintaining day-to-day revenue generation. Investments, while they can be risky, have a positive expected return. Gambles, on the other hand, are based on chance and not putting money to work.
An investment bank provides a variety of services to individuals and businesses, including many services that are designed to assist individuals and businesses in the process of increasing their wealth. Investment banking may also refer to a specific division of banking related to the creation of capital for other companies, governments, and other entities. Investment banks underwrite new debt and equity securities for all types of corporations, aid in the sale of securities, and help to facilitate mergers and acquisitions, reorganizations, and broker trades for both institutions and private investors. Investment banks may also provide guidance to companies who are considering issuing shares publicly for the first time, such as with an initial public offering (IPO). In an investment, you are providing some individual or entity with funds to be put to work growing a business, starting new projects, or maintaining day-to-day revenue generation. Investments, while they can be risky, have a positive expected return. Gambles, on the other hand, are based on chance and not putting money to work. Gambles are highly risky and also have a negative expected return in most cases (e.g., at a casino). An investment is typically a long-term commitment, where the payoff from putting that money to work can take several years. Investments are typically made only after due-diligence and analysis has been undertaken to understand the risks and benefits that could unfold. Speculation, on the other hand, is pure directional bet on the price of something, and often for the short-term. Speculation is a distinct activity from investing. Investing involves the purchase of assets with the intent of holding them for the long-term, while speculation involves attempting to capitalize on market inefficiencies for short-term profit. Ownership is generally not a goal of speculators, while investors often look to build the number of assets in their portfolios over time.
Investment
