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Variable Investment is an investment with a return comprised exclusively of changes in the value of the asset. This subjects owners to capital gains and losses and principal is not guaranteed. All other things being equal, an investor would expect a higher rate of return as a trade-off for accepting greater risk.
Synonyms: variable investment vehicle
For context, zero-coupon bonds, non-dividend paying stocks, collectibles and holdings of raw land all are examples of variable investments. The incidence of companies that pay no dividends is higher than one might expect, particularly for small public companies.
Many buy-and-hold investors elect to own variable investent vehicles for the tax advantage of not paying incremental taxes on dividends and interest.
Doc: A variable investment is generally best
suited for? . . ...Class?
Lia: Investors with a high tolerance for risk.
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