An Investor is an individual, company, or any entity that invests capital to make a profit. Their main concern is to maximize return while minimizing risk.
Speculators, who hope to make a higher-than-average profit, have a greater risk tolerance than investors.
There are several types of investments, including real estate, commodities, currency, derivatives, bonds, stocks, etc. Even time (which costs money) is a form of investment.
Investors have various possible functions
Investors may provide loans, buy shares, guarantee to pay creditors, or even contribute with labor.
They may operate both in the primary (injecting capital into a business) and secondary markets (buying stocks from other investors). In other words, they may either make a commitment in exchange for a stake in a business, a fixed return (dividends or interest), or sell their investment later on for a higher price.
When two companies commit to a joint venture and contribute funds to it, they are both investors.
Many people get together and form investment clubs, which pool their resources and knowledge together in order to get more successful investment outcomes.
Etymonline.com says that the English word ‘investor’ emerged in the 1580s with the meaning ‘one who clothes’. In 1862 the meaning had become ‘one who invests money’.
The word ‘investor’ in Spanish is ‘inversor’, Portuguese – investidor, French – investisseur, Italian – investitore, German – Investor, Russian – инвестор, Japanese – 投資家, and Chinese – 投资者.
Two main types of investors
There is the retail investor and institutional investor.
Retail
People who invest for their own personal account rather than for a company or organization. This category also includes collectors of things of value such as antiques, stamps, coins and art.
Angel investors, those who invest in start-up companies with their own money, are retail investors.
Institutional
These are entities which pool money to invest including companies, institutions, and **private equity funds, which operate as investment collectives on behalf of high net-worth individuals.
** Private equity refers to investments made in private companies, i.e. those not listed on stock exchanges.
Those managing pensions plans, insurance reserves, investment trusts, mutual funds, hedge funds, and other funds are also institutional investors, as are businesses that invest either directly or through a captive fund.
Compound phrases with ‘investor’
A compound phrase is a term that consists of two or more words, such as ‘angel investor.’ In business English, there are many compound phrases containing the word ‘investor.’ Let’s have a look at some of them:
Passive Investor
Invests in funds or portfolios without active management.
For example: “She’s a passive investor in index funds.”
Accredited Investor
High net worth individual with access to complex investments.
For example: “He’s an accredited investor in private deals.”
Value Investor
Looks for undervalued stocks with strong fundamentals.
For example: “Warren Buffet is a famous value investor.”
Investor quotes
Steve Forbes, Editor-in-chief of business magazine Forbes, said:
“One thing on psychology, which we’ve always known, is that every investor says they’re long-term – and they are until the market takes a hit.”
American multibillionaire Warren Buffett, said:
“The investor of today does not profit from yesterday’s growth.”
Multibillionaire Bill Gates, co-founder of Microsoft Corporation, said:
“I’m an investor in a number of biotech companies, partly because of my incredible enthusiasm for the great innovations they will bring.”
Jamie Dimon, Chairman, President/CEO of JPMorgan Chase, said:
“The United States has the best, deepest, widest, and most transparent capital markets in the world which give you, the investor, the ability to buy and sell large amounts at very cheap prices. That is a good thing.”