LeoGlossary: Appreciation (Asset)
Appreciation is the increase in the value of an asset over time. This is something that both investors and traders seek (unless one is short selling). The difference is the time frame they are looking at.
Most people focus upon securities but the list of what people use to see appreciation is long. It can include:
- real estate
When it comes to investing, this is different than seeking yield, which is mostly focused upon the return on assets that tend to be based upon the fixed income model.
Speculation is known for taking on risk, often leveraging up a position to capture the appreciation of whatever asset being betting upon.
The ebb and flow of markets is what creates appreciation.
The opposition of this is depreciation, which is the decline in value of an asset over time.
Both of these are captured via different accounting functions.
Posted Using LeoFinance Beta