# What is Investing?

First of all, let's define **what investing means**.

It can include **buying financial instruments**, which we will discover shortly.

Investing is useful for several reasons:

* Investing enables individuals and organizations **to grow their wealth over time**, essentially earning additional income;

* Investments can **generate a steady stream of income** without requiring active effort;

* Investments **support economic growth** by providing capital for businesses to expand, create jobs, improve infrastructure, and more.

# Common Types of Investments

Considering assets for investing, **the most common** are:

However, it's important to note that **investing always carries a risk**.

Investing in a **single asset** is **relatively simple** but **carries considerable risk**. 

However, by spreading investments across **multiple assets** — a process known as **diversification** — the investment process becomes **more complex** but also **significantly reduces risk**.

We will delve deeper into diversification **in the upcoming chapters**, covering how to compute **essential components** and select **the most effective diversification strategies** using Python.

Which of the following cannot be considered an investment asset under certain conditions?

This course will help those who have knowledge of Python and Probability Theory and want to get some basic knowledge of Portfolio Management, including fundamental financial concepts like risk and return, basics of portfolio optimization and influence of factors on portfolio's behaviour.

To start, we'll explore some fundamental financial concepts that will be essential for the rest of the course. These include investing, diversification, portfolio, return and risk. We'll also learn how to use Python to work with them.

Now that we've covered the basics of portfolio analysis, it's time to explore methods for choosing optimal weights for our portfolio. Specifically, we'll discuss fundamental concepts in portfolio optimization, including Modern Portfolio Theory and its key component - the Efficient Frontier. Additionally, we'll learn how to balance high returns with low risk, and how to determine the weights for a portfolios that achieves the best possible return-risk trade-off or the lowest risk, all using Python.

Finally, after covering the fundamentals of portfolio analysis and optimization, we’re ready to dive into predicting our portfolio's behavior and understanding the impact of various factors on it. Practically, we'll explore the basics of Factor Analysis, including different types of factors and several models built around them.

Investing Basics

What is Investing?

Why to Invest?

Common Types of Investments

Awesome!

Investing Basics

What is Investing?

Why to Invest?

Common Types of Investments