Investor

An investor is a person who allocates financial capital with the expectation of a future return (profit) or to gain an advantage (interest). Through this allocated capital, the investor usually purchases some species of property.

Types of Investments

Investments can include:

• Equity
• Debt securities
• Real estate
• Infrastructure
• Currency
• Commodities
• Derivatives such as put and call options, futures, and forwards

Types of Investors

There are two main types of investors:

• Retail investors: Also known as individual investors.
• Institutional investors: These include pension plans, businesses, endowment funds, mutual funds, hedge funds, sovereign wealth funds, and large money managers.

Investor Profiles

Investors can also be classified according to their risk attitudes:

• Risk-averse investors: Prefer lower returns with known risks.
• Risk-tolerant investors: Willing to take higher risks for potentially higher returns.

Investor Protection

Government agencies, such as the U.S. Securities and Exchange Commission (SEC), provide regulations and enforcement to ensure fair markets and protect investors from fraudulent activities.