Investment Product

What is an 'Investment Product'

An investment product is a product purchased with the expectation of earning a favorable return. Investment products can be income-producing, as with fixed-interest earning products, or more speculative in nature, as with stocks and options. A wide variety of investment products exist, including, but not limited to, stocks, options, futures, bonds, mutual funds, certificates of deposit, money market investments, ETFs and annuities.

BREAKING DOWN 'Investment Product'

Investment products are available for individual and institutional investors, and are purchased in an attempt to generate a profit. Some investment products, such as certain types of bonds, provide a fixed interest payment in addition to a return of the initial investment at the time of maturity. Other types of investment products, such as stocks, entail greater risk and while earnings (and profits) are anticipated, they are not guaranteed. An investor who diversifies will have a variety of investment products in his or her portfolio to manage risk.

RELATED TERMS
  1. Investment Vehicle

    A product used by investors with the intention of having positive ...
  2. Investor

    Any person who commits capital with the expectation of financial ...
  3. Wide Variety

    A merchandising strategy in which a retailer stocks a large number ...
  4. Portfolio Investment

    A holding of an asset in a portfolio. A portfolio investment ...
  5. Fixed-Interest Security

    A debt instrument such as a bond, debenture or gilt-edged bond ...
  6. Contribution Margin

    A cost accounting concept that allows a company to determine ...
Related Articles
  1. Mutual Funds & ETFs

    5 Reasons to Choose Mutual Funds over ETFs

    Discover five reasons to choose mutual funds over ETFs, such as the wide variety of funds available, the higher service quality and the lack of commission fees.
  2. Retirement

    Retirement Planning For 20-Somethings: Choosing And Managing Your Investments

    The types of assets in which your savings are invested will significantly impact your return on investments and, consequently, the amount available to finance your retirement. As a result, a ...
  3. Products and Investments

    How to Create a New Financial Product in 10 Steps

    The 10 steps outlined here are essential to the creation of a new financial product.
  4. Savings

    Teaching Financial Literacy To Teens: Investing

    Many teens are interested in learning about investing, including investment types, risk management and fundamental and technical analysis.
  5. Investing

    Top Alternative Investments To The Stock Market

    Dislike the stock market or want greater diversity? Here are some alternatives.
  6. Investing Basics

    What's an Investment?

    An investment is an asset purchased with the expectation that it will generate income or appreciate over time. In finance, common investments include stocks, bonds, real estate, mutual funds ...
  7. Investing Basics

    How To Create Capital Protected Investment Using Options? (MSFT)

    Does "Capital-Protection" guarantee in an investment product sound attractive? Wait! Here's how you can create a better one for yourself, at low-cost!
  8. Mutual Funds & ETFs

    Debt Mutual Funds Vs. Fixed Deposits

    Learn about the advantages and disadvantages of debt-oriented mutual funds and fixed deposit accounts, including how each investment generates income.
  9. Investing Basics

    Defining The 3 Types Of Investments

    The first step to being a successful investor is knowing what is and isn't an investment.
  10. Options & Futures

    Stock Safety: Top 3 Ways to Limit Your Losses

    First time stock investors may ask, is there any way to buy insurance on stocks to prevent losses?
RELATED FAQS
  1. Is there any way to reverse the law of diminishing marginal returns?

    Learn more about how consumer spending, supply and demand impact production decisions. Find out more about the law of diminishing ... Read Answer >>
  2. What are some ways a company can expand its product line?

    Understand what a product line is and why it's important. Learn about specific ways in which a company can expand its product ... Read Answer >>
  3. What are some of the limitations of only looking at the rate of return for an investment?

    Learn why only reviewing the rate of return for an investment poses a risk to the investor and what additional factors should ... Read Answer >>
  4. What are the differences between product bundling and product lines?

    Understand the differences between product bundling and product lines. Learn why a company would want to expand its product ... Read Answer >>
  5. What are the main kinds of annuities?

    Learn about the four basic types of annuities, and why the different investment and payout options are suitable for different ... Read Answer >>
  6. Do production costs include the marginal cost of production?

    Learn more about marginal costs of production and production costs. Find out how businesses can use marginal cost calculations ... Read Answer >>
Hot Definitions
  1. Goodwill

    An account that can be found in the assets portion of a company's balance sheet. Goodwill can often arise when one company ...
  2. Return On Invested Capital - ROIC

    A calculation used to assess a company's efficiency at allocating the capital under its control to profitable investments. ...
  3. Law Of Demand

    A microeconomic law that states that, all other factors being equal, as the price of a good or service increases, consumer ...
  4. Cost Of Debt

    The effective rate that a company pays on its current debt. This can be measured in either before- or after-tax returns; ...
  5. Yield Curve

    A line that plots the interest rates, at a set point in time, of bonds having equal credit quality, but differing maturity ...
  6. Stop-Limit Order

    An order placed with a broker that combines the features of stop order with those of a limit order. A stop-limit order will ...
Trading Center