investment process by definition - is the process of placing the funds or any other capital, the purpose of which is to obtain future profits.In other words, the investment process can be thought of as a kind of action, in which the investment funds or any other capital invested by the investor, work on it and thus bring him earning potential.That is, the investment can be regarded as one of the possible ways to generate profit through investment.
The investment process is an integral part of the modern economy.The investor actually serves as a lender, however, the risk of investing is different from credit risk.The loan and interest, regardless of the profits should be returned within a specified time, and thus bring income.Calculate the return on investments and income can only be a profitable investment project, otherwise the investment may be lost.
The investment process consists of a series of procedures that allow the investor to choose an investment project, the size of the investment, the time of its implementation, most investments and, finally, monitoring the implementation of the project.
However, not everyone from small investors have the time to choose alternative solutions, not to mention the expertise required.
It is no accident emergence of a large number of different forms of collective investment designed to meet these needs.Perhaps the most common and promising form of collective investment is an investment company.
Investment is a specially organized form of financial intermediary, which attracted investors from the funds are used to acquire financial assets.Investors, in turn, are endowed with certain rights in respect of both the acquired assets and profits.
Thus, one of the main functions of investment companies is to combine the capital of many investors having similar investment objectives.They usually exist in the following organizational forms:
- mutual funds (open-ended investment company);
- closed-end investment funds.
investor in such a way is exempt from the need for many, perhaps, and he knew enough of procedures, for example, the calculation of risk, accounting and taxation - is responsible for all experienced managers.
investment fund gives investors the opportunity to reduce investment risks.This is - a universal way to invest their capital, as in this case, you can choose the optimal ratio between the risk of investments and the level of their profitability.
Investor Fund formally proportion to make a contribution, owns shares of each of the shares of investment fund assets, but in fact, in reality, to participate in the management of JSC can not - his interest in the meeting of shareholders formally represent managers who when buying shares it these powersI passed.The real and the formal owner of all shares as a legal entity is an investment fund.
emergence of forms of equity investment process easier transfusion of capital from one branch to another.We can say that funds are huge taps capital.Thanks to them, ordinary investors can save and accumulate capital, while avoiding the risks inevitably associated with investments.
It is obvious that the investment process, like any other, which is subject to the achievement of specific goals, needs to be managed.
