investment

An expenditure to acquire property or other assets in order to produce revenue; the asset so acquired. The placing of capital or laying out of money in a way intended to secure income or profit from its employment. Securities & Exchange Commission v. Wickham, D.C.Minn., 12 F.Supp. 245, 247.

To purchase securities of a more or less permanent nature, or to place money or property in business ventures or real estate, or otherwise lay it out, so that it may produce revenue or gain (or both) in the future.

See also investment contract.

To clothe one with the possession of a fief or benefice.

See investiture.

For capital investment, see capital.

See also legal investments

- legal list

- Prudent Man Rule

@ investment advisor

Any person who, for compensation, engages in the business of advising others, either directly or through publications or writings, as to the value of securities or as to the advisability of investing in, purchasing, or selling securities, or who, for compensation and as a part of a regular business, issues or promulgates analyses or reports concerning securities. Uniform Securities Act, No. 401(f)

@ Investment Advisors Act

Federal statute which regulates activities of those who furnish investment advice and counselling. 15 U.S.C.A. No. 80b. The Act is administered by the Securities and Exchange Commission which, among other things, requires registration of investment advisors

@ investment banker

A financial institution that underwrites and sells new securities.

In general, investment bankers assist firms in obtaining new financing. An underwriter, the middleman or broker between the corporation issuing new securities and the public. The usual practice is for one or more investment bankers to buy outright from a corporation a new issue of stocks or bonds. The group forms a syndicate to sell the securities to individuals and institutions. Investment bankers also distribute very large blocks of stocks or bonds-perhaps held by an estate. Thereafter the market in the security may be over-the-counter or on a stock exchange.

See also underwriter

@ investment banking

Underwriting and selling primarily new issues of stocks and bonds to investors.

See investment banker

+ investment banking

Business of underwriting or distributing bond, stock or other securities issues

@ investment bill

Type of bill of exchange purchased at a discount and intended to be held to maturity in the form of an investment

@ investment company

Any issuer which:

(1) is or holds itself out as being engaged primarily, or proposes to engage primarily, in the business of investing, reinvesting, or trading in securities;

(2) is engaged or proposes to engage in the business of issuing face-amount certificates of the installment type, or has been engaged in such business and has any such certificates outstanding; or

(3) is engaged or proposes to engage in the business of investing, reinvesting, owning, holding, or trading in securities, and owns or proposes to acquire investment securities having a value exceeding 40 percentum of the value of such issuer's total assets (exclusive of Government securities and cash items) on an unconsolidated basis. Investment Company Act, No. 3.

A company or trust which uses its capital to invest in other companies. The most common kind of investment company is the mutual fund. An investment company differs from a holding company in that the latter seeks control of the ventures in which it invests while an investment company seeks the investment for its own sake and normally diversifies its investments.

There are two principal types:

the closed-end and the open-end, or mutual fund (closed-end mutual fund; open-end mutual fund).

Shares in closed-end investment companies are readily transferable in the open market and are bought and sold like other shares. Capitalization of these companies remains the same unless action is taken to change.

Open-end funds sell their own new shares to investors, stand ready to buy back their old shares, and are not listed. Open-end funds are so called because their capitalization is not fixed; they issue more shares as demanded.

See also mutual fund

@ Investment Company Act

Federal statute passed in 1940 which regulates investment companies. 15 U.S. C.A. No. 80a-l et seq.

See investment company

@ investment contract

A contract, transaction or scheme whereby a person invests his money in a common enterprise and is led to expect profits solely from the efforts of the promoter or a third party. S. E. C. v. W. J. Howey Co., 328 U.S. 293, 298, 66 S.Ct. 1100, 1103, 90 L.Ed. 1244, 1249.

The placing of capital or laying out of money in a way intended to secure income or profit from its employment. State by Spannaus v. Coin Wholesalers, Inc., Minn., 250 N.W.2d 583.

To fall within scope of the federal securities acts an "investment contract" must involve three elements:

(1) an investment of money,

(2) in a common enterprise, and

(3) an expectation of profits solely from the efforts of others. Hector v. Wiens, C.A.Mont., 533 F.2d 429, 432

+ investment contract

A contract in which one party invests money or property expecting a return on his investment.

See also investment contract

- security.

@ investment credit

See investment tax credit

@ investment indebtedness

Debt incurred to carry or acquire investments by the taxpayer in assets that will produce portfolio income. Limitations are placed upon interest deductions that are incurred with respect to such debt (i.e., generally to the corresponding amount of investment income)

@ investment property

Generally, any property purchased for the primary purpose of profit. The profit may be from income or from resale

@ investment security

Under U.C.C., an instrument issued in bearer or registered form as a type commonly recognized as a medium for investment and evidencing a share or other interest in the property or enterprise of the issuer. No. 8-102(l)(a).

See also investment contract

- security

@ investment tax credit

Federal legislation designed to stimulate investment by business in capital goods and equipment by allowing a percentage of the purchase price as a credit against individual and corporate taxes due and not merely as a deduction from taxable income. The Tax Reform Act of 1986 generally repealed this credit retroactively for most property placed in service after January 1, 1986.

See also recapture of investment tax credit

+ investment tax credit

A reduction in federal taxes for purchasing certain property-primarily equipment. The objective in providing the credit was to encourage companies to make acquisitions resulting in a stronger economy. The Tax Reform Act of 1986 repealed the investment tax credit for property acquired after January 1,1986 with some exceptions for transition property

See also tax credit

@ investment trust

A company which sells its own stock and invests the money in stocks, real estate, and other investments.

See also investment company

- mutual fund

- real estate investment trust

@