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.