work, meaning that there is some implicit risk that the related project(s) may fail, resulting in a loss of money. Investing also differs from speculation in that with the latter, the money is not put to work per-se, but is betting on the short-term price fluctuations. KEY TAKEAWAYS • Investing involves deploying capital (money) toward projects or activities that are expected to generate a positive return over time. • The type of returns generated depends on the type of project or asset; real estate can produce both rents and capital gains; many stocks pay quarterly dividends; bonds tend to pay regular interest. • In investing, risk and return are two sides of the same coin; low risk generally means low expected returns, while higher returns are usually accompanied by higher risk. • Investors can take the do-it-yourself approach or employ the services of a professional money manager. • Whether buying a security qualifies as investing or speculation depends on three factors—the amount of risk taken, the holding period, and the source of returns. Understanding Investing Investing is to grow one's money over time. The expectation of a positive return in the form of income or price appreciation with statistical significance is the core premise of investing. The spectrum of assets in which one can invest and earn a return is a very wide one. Risk and return go hand-in-hand in investing; low risk generally means low expected returns, while higher returns are usually accompanied by higher risk. At the low-risk end of the spectrum
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