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A security or derivative. An investment vehicle may be rigidly structured, as in an asset-backed security, or it may be quite basic, like a stock or bond. One uses an investment vehicle in order to make a profit on the capital one has invested in it. An investment vehicle may involve the purchase of a debt obligation, which entitles one to repayment with interest, or it may involve buying an ownership stake in a business, with the hope that the business will become profitable. Many different investment vehicles exist, and each is subject to greater or lesser regulation in the jurisdiction in which it takes place. Each one has its own risks and rewards; choosing the correct investment vehicles for a portfolio requires a combination of astuteness, knowledge of the market, timing, and good luck.
Farlex Financial Dictionary. © 2012 Farlex, Inc. All Rights Reserved
A specific investment having attributes that are intended to accomplish certain goals. Examples of investment vehicles include common stock, preferred stock, bonds, options, futures, annuities, and collectibles.
Wall Street Words: An A to Z Guide to Investment Terms for Today's Investor by David L. Scott. Copyright © 2003 by Houghton Mifflin Company. Published by Houghton Mifflin Company. All rights reserved. All rights reserved.