What is the practice of buying a financial product with the hope of earning a profit or favorable returns?

Investing is the practice of allocating money or capital to a financial product or asset with the expectation of generating a profit or realizing favorable returns over time. This process typically involves purchasing stocks, bonds, real estate, or other financial instruments that have the potential to increase in value. The fundamental idea behind investing is that by putting money into a particular asset, the investor anticipates that it will appreciate in value or generate income, such as dividends or interest.

In contrast, the other options present different financial behaviors. Saving involves setting aside money for future use, often in a low-risk environment like a savings account, without the expectation of significant returns. Budgeting refers to the process of planning and tracking income and expenses to manage finances effectively. Consumer spending is the act of purchasing goods and services for personal use, which does not typically involve a focus on profit or return. Thus, investing is clearly distinguished by its goal of earning profits through the financial markets.