Local Investment Advisor in Leavenworth, KS

“Investment” is an interesting word.  When most people who think of the word investment, they usually think of the first definition (from dictionary.com):

to put (money) to use, by purchase or expenditure, in something offering potential profitable returns, as interest, income, or appreciation in value

It is not until the sixth entry that we get to another definition:

a devoting, using, or giving of time, talent, emotional energy, etc., as for a purpose or to achieve something

The first definition is easy – it allows anyone who simply has money and purchases something with the potential for profitable returns is someone who as made an investment.  Notice that there is not a requirement for a rational analysis regarding how a potential return might be achieved.  Just the mere existence of both a purchase and a potential profitable return create an investment.  Therefore, a person who engages in such activity — well, that person must be an investor.

The sixth entry requires a bit more diligence.  This definition requires an application of effort; the use of time, talent, and energy.  As an example, “I am heavily invested in this project.”  So putting forth extra skill, determination, and effort is required.

It was Graham, of course, who stated that “in the easy language of Wall Street” a person who makes a purchase of sale, for whatever reason, becomes an “investor”.  Yet, clearly a more intelligent approach — something using the sixth definition requirements of time, talent, and energy — then a person becomes an investor in less easy terms.  So it is best to be the sixth definition.  This is the type of effort I put into analyzing securities for my clients.