Investment demand is what it sounds like: demand for investment.
So...who’s demanding that investment? Businesses. They need you to invest in them so that they can expand, making both you and them money.
Some businesses might need computers and desks, while others need factory equipment and warehousing. Entities needing this kind of capital pay for your having invested in them in two primary ways: by writing debt to investors, i.e. selling them bonds (which are promises to pay back principal and then rent on that principal, i.e. interest, along the way), and selling equity to investors, i.e. a slice of ownership in that entity.
When investment demand is low, businesses aren’t currently in the business of expanding, but are either just trying to stay afloat, or are shrinking (which is generally bad for the economy and the stock market...especially in such a globally connected world).
When investment demand is high, it means businesses are doing the feel-good dance, because the economy is humming along swimmingly, allowing them to grow, which brings in more profits.
Related or Semi-related Video
Econ: What is Outflow of Capital?2 Views
And finance Allah shmoop What is the outflow of capital
All right well you are a stunningly deep sleeper One
day you fall asleep on the beach just before the
tide comes in When you wake up covered in you
know seaweed and surrounded by a flopping fish You find
that everything you brought to the beach was washed out
to the sea Your towel's your beach umbrella You're cooler
with the mango juice and the cops you know made
out of coconuts And your wallet Yeah that thing with
that stack of cash you brought for vacation Well capital
outflow in a nutshell Well in a coconut shell anyway
Riel life capital outflow refers to the same concept but
only on a national level That is assets move out
of the country They flow out Investors pull their money
out of one place because they think their cash will
be better off somewhere else You're an investor in a
Su Mak farm in the small Mediterranean nation of Slovenia
The king dies and his dopey son takes over the
throne So yeah you're sure the new king's policies will
ruin the country's economy and run everything businesswise into the
ground So you closed down your Su Mak farm and
you buy another one in a neighbouring country with a
more stable future in a way smarter Qing Capital Outflow
out of Slovenia and into its neighbour That's what's happening
Well Capital outflow doesn't just involve foreigners moving money from
one overseas investment to another Citizens of a country might
move assets out of that nation if they think they'LL
be safer somewhere else So let's go to China It's
a country with a restrictive government and not a huge
respect for the rule of law for its individuals Like
if you're a rich person in China well you'LL want
to get as much of your money out is you
can most likely anyway move it somewhere else somewhere safer
somewhere less scrutinizing So you take what cash you can
and you look for investments elsewhere outside of the restrictive
rules of China So you buy an apartment in Paris
and maybe a small castle with little golf course in
Scotland and then you come back around and buy a
cotton candy factory with corn in Iowa Or maybe you
start looking at ASU Mac Farm along the Mediterranean Yeah 00:02:09.365 --> [endTime] just not inched Slovenia
Up Next
M1, M2, and M3 are different measurements of economic money supply. Ah, well...we were hoping it was some sort of James Bond, MI6 thing.
What is Net Investment? Net investment encompasses how much a company spends on the products that help them conduct business, stuff like equipment,...