THE IMPORTANCE OF INVESTMENTS IN ECONOMIC GROWTH

Abstract

Investment, as a key factor in economic development, refers to the allocation of resources (time, money, effort) by individuals, businesses, and governments to obtain future returns. It forms the foundation for growth, innovation, and stability. Financial investments are divided into two main categories: stocks, which offer potential capital appreciation and dividends; and bonds, which are a less risky option with fixed interest payments. Real estate investments involve the acquisition of properties for rental income and resale purposes, while business investments stimulate economic activity by supporting entrepreneurship and venture capital. Alternative investments, such as cryptocurrencies and art collections, present new opportunities. Risk management is crucial in these areas; diversification helps reduce losses by spreading Ümumi iqtisadiyyat Ġnnovasiyalı iqtisadiyyat və menecmet məcmuəsi № 1/2025 səh.4-12 12 investments across different asset classes. Interest rates, inflation, and government policies impact investment decisions. In recent years, technological advancements have transformed the investment landscape; online platforms and fintech tools simplify investment processes. Simultaneously, the rise of ESG (Environmental, Social, and Governance) investments reflects the integration of ethical considerations with financial objectives. Overall, investment is a significant domain that supports economic growth, creates jobs, and has a broad impact on society.