Real investments - concept, types and forms of real investment

All investments, in principle, can be divided into two main components:

1. Real investments;
2. Financial investments (which will be discussed below).

Real investments involve direct investment in one or another area of ​​activity (in production, in business, in infrastructure, etc.). Funds are invested directly, without the use of various types of financial instruments.

Financial investments represent the investment of funds in various types of financial instruments, such as, for example: shares, bonds, bank deposits, precious metals, etc. The main purpose of financial investments is, as a rule, to obtain a certain income. But in a number of cases, such investments are made with the aim of acquiring a certain influence on the investment object (see Strategic investor).

Classification of financial investments

Let's first look at a small classification. So, according to goals, all financial investments can be divided into:

• Briefcase;
• Strategic.

Portfolio investments involve investing funds solely to generate income (in the form of interest, dividends, etc.). Strategic investments aim to capture a certain influence on the investment object. They are carried out by purchasing a large share of the company's shares (a blocking or, ideally, a controlling stake).

According to the terms of investment of funds, all investments are conventionally divided into:

• Short term;
• Medium term;
• Long-term.

Short-term investments involve investing funds for periods not exceeding one year. As a rule, this type of investment is designed to generate income from the difference in the exchange rate value of the purchased financial instrument. The investor expects to buy cheaper and then sell more expensive (long position) or vice versa, first sell more expensive and then buy back cheaper (short position).

Medium-term investments are made for a period of one to five years and are aimed at combining income received both from the ownership of financial instruments (dividends, interest) and income received as a result of realizing the difference in their exchange value.

Long-term investments may not have any limited period at all, or they may be designed for fairly long time intervals (from 5 years or more). In this case, the emphasis is on generating income from owning a financial instrument. A long-term investor does not plan to speculate on the difference in rates of the securities he purchased, although, of course, he is interested in the growth of their value.

Based on the type of financial instruments purchased, all investments are divided into:

• Equity;
• Debt.

Equity investments involve the purchase of financial instruments that provide ownership rights (a certain share in the business of the issuing company). Such instruments have an unlimited circulation period and allow you to receive regular income from the current activities of the issuing company (in the form of dividends).

Debt investments are investments in financial instruments that do not provide ownership rights to the investment object. They have a limited period of validity, during which they pay a set interest income, and at the end of which the principal amount of the debt (the amount of money for which the debt financial instrument was originally purchased) is returned.

In addition, we can distinguish such types of financial investments as:

• Individual;
• Collective.

Individual investments involve direct investment of funds in various types of financial market instruments (securities, currency, cryptocurrency, precious metals, raw materials, etc.). And collective investments are carried out by investing money in various types of investment funds, which, in turn, directly manage the entire totality of funds received from shareholders.

Definition

Financial investments are usually understood as investments of monetary capital in various financial instruments - stocks, bonds, commodity futures, etc. In essence, this is the purchase of speculative assets with the aim of their further resale at a more favorable price. What investments are called real?

Real investments are investments in the real sector of the economy, that is, in production and the service sector, in the creation of tangible and intangible assets. If we look at investments from the point of view of macroeconomics, then these are investments in the general improvement of the material well-being of society.

Thus, real investments are investments in maintaining the economic complex, as well as in its modernization and expansion. In this case, investments can be aimed at acquiring or creating both tangible and intangible assets (intellectual property objects - production licenses, artistic works, software, etc.).

Real investment is, in most cases, financing large, expensive projects. If, when making financial investments, you can buy securities in small quantities for literally a few thousand or even a few hundred dollars, in the real sector any investments almost always represent fairly large amounts.

For this reason, real investors are either wealthy individuals or legal entities with large capital. Only they are wealthy enough to provide financing for projects for the construction, modernization and expansion of production complexes of various sizes.

Why you need to invest

If you are a regular reader of my blog, then you hardly need convincing that to improve your financial well-being you need to invest. However, there are always at least two points of view. I also came across the following opinion: “Why risk your money in unclear and risky investments, if it’s normal?” Surely you yourself know people who get by without any investments. For this reason, I want to express my arguments about why I consider investments not just entertainment for the rich, but a vital necessity for a person at any level of income.

Money quickly loses value due to inflation

This is especially true for the countries of the former USSR (not counting the Baltic states). By simply putting part of your salary into a nest egg, you are agreeing that every year that money will lose up to 15% of its real value, and sometimes even more - and that's not cool at all.

Inflation is an increase in the prices of goods and, as a result, a decrease in the purchasing power of money. 10% inflation means that prices have risen by 10% on average, but you can buy 10% less goods on average for the same amount of money.

The easiest way to solve the problem of inflation is to buy dollars or euros, which depreciate much more slowly than other currencies:

Comparison of annual inflation in the CIS countries, the USA and the Eurozone.

Plus, when buying currency, you expect to earn money, among other things, from the difference in rates - and this can already be called a financial investment. To be convinced of their effectiveness, it is enough to recall 2013-2014 in Russia and Ukraine, when national currencies fell by 2 and 3 times against the dollar, respectively. Practice shows that such crises occur once every 5-10 years.

You can also receive passive income in foreign currency by depositing money in a bank, although rates on deposits in dollars and euros rarely exceed 1-2%, so you can hardly count on more than covering inflation. If you want to earn something, then you should go, for example, to the American stock market, which has an average return of 6.5% per annum.

Investments bring money without spending a lot of time

Time is a very valuable resource, but for a normal life we ​​have to convert it into money. What to do when you want to earn more than you do now? When it comes to traditional wage labor, you can:

• look for a place with a higher salary, but alas, not everyone is destined to become presidents of large companies or super-in-demand specialists who are paid really a lot;
• work beyond measure, using the limit of a person’s working capacity in the region of 80-100 hours a week, but again, this is not for everyone and is generally very harmful to health.

Actually, why do many people dream of becoming the head of a large company? Not just to earn money, but for others to work for them and create additional profit for the business, and therefore for its owner, with their labor. Exactly the same approach is used in financial investments : you become the head of a company called “Investment Portfolio” and hire employees - financial instruments that earn you money:

This is exactly what my own investment portfolio looks like at the time of writing. The main task, as its owner, is to monitor the work of subordinates (investment instruments), “hire” good ones and “fire” bad ones. It’s similar to the job of a director of a regular company, only the time commitment is much lower - only a few hours a week, which allows me to do other projects - develop a blog, develop tools for investors, spend time on training, etc.

It’s not a fact that you will have a normal pension

The sensational pension reform in Russia, the lowest Ukrainian pensions in Europe and global trends in general indicate that it is quite difficult to count on a secure old age from the state. And in general, just surviving until retirement will be an achievement:

Retirement age for 2021, according to Wikipedia

I don’t like at all that I have to work until I’m 60 and then still get pennies. Of course, it may be possible to live normally on retirement in Europe, but it certainly won’t work for us. One way or another, you will have to rely on your own strengths, and you need to prepare now, especially if you are still young - there will be enough time to achieve a strong financial position.

Investments help solve the pension problem. Firstly, you can get good passive income by investing in instruments that generate profits regularly - deposits, bonds, shares with dividends, real estate. Secondly, by investing, you can significantly increase your savings in the years remaining until retirement age - the effect of compound interest will play an important role in this.

Investing improves financial literacy

The ability to properly manage financial resources is difficult to overestimate, because money in the 21st century means life. What do you think will happen if we “restart” the financial system and distribute, say, $5,000 to every person on the planet? In a year, some people will become millionaires, and some will become beggars. Moreover, the rich people will mainly be people who were rich before, which means they knew how to handle money well.

What skills do financially literate people have? They:

• know how to keep track of income and expenses and understand where money comes from and where it goes;
• know financial planning skills and thanks to this they can achieve big goals;
• know how to spend money wisely and create new sources of income;
• In general, they have the right money mindset, which makes them financially successful.

In general, in order to properly manage your finances, you need to learn quite a lot of different things, many of which are closely related to mathematics. You're lucky if you're interested in this in life, but if not, where do you get the motivation? Well, the desire to earn money is a great motivator. It is enough to invest a small amount out of curiosity (you are a reasonable person and will not risk a lot of money without preparation) and watch it, so that you become interested in studying investing.

At the same time, it’s worth starting to keep track of your investments in order to evaluate your results and understand how much you earned in currency and as a percentage. At least that's how I started. The main thing is to take the first step, then you will probably get involved in the process, and along the way you will definitely learn to better manage your finances.

If you think about it, you can find many more arguments in favor, but this is enough, in my opinion. Everyone should invest, it is a real necessity. Where can you invest money profitably? This is the next section of the article.

Characteristic

Real investments are investments in real assets of an enterprise, which can be divided into two subgroups: tangible and intangible. In textbooks devoted to the study of economics, real investments may be called capital investments, since they can exaggerate the amount of capital in the future.

Financial investments are a combination of monetary investments in securities, deposits and equity participations. Financial investments are investments in long-term financial instruments that can generate additional income in the future. Also, the purpose of such investments may be to protect them from various financial risks: inflation, crisis, theft. In fact, monetary investments are considered a rather complex category that needs to be considered in detail.

Distribution of profits for each type of investment

Profit from investment refers to ancient Roman private law and the modern civil economy of the country. The size of each share is determined by the success and return on investment, payback period and cost goal. There is also a payback point and marginal profit for each project.

Maximum percentage

The maximum interest threshold for an investor may vary, although it is unlikely that someone will be able to share a share of future income with the bank by asking for an interest-free loan, right? The bank will not be able to give money for air without knowing whether it will at least get its money back. It’s easier with investors - if the project reaches a million, and he wants 10% of his investments, then his payment will be that same 110%. If the contract already specifies interest on the project, then it is more expensive.

For example, an investor will invest $1,000 at 10% per annum. Within a year, you have created a financial niche and enriched your capital by $1,000,000. This means that you give the investor $1,100, regardless of how much your company brings you. If he assigned you 1% of your income, you would give him $10,000.

In standard contracts:

1. If the company does not achieve the desired payback results, the investor is entitled to 30% of your income and another 20% (of the remaining amount) for failure to fulfill the plan.
2. If the company reaches payback later than the agreed period in the contract, the investor receives 20% for the delay from the project income.

In the second case, 20% can be returned to the company if it passes the break-even point, bringing all the required interest to the investor.

However, no investor in a failed project will receive 100% of the invested funds, not counting interest. He will benefit only from a portion of the costs, so the money is invested in several companies at once.

Interesting: How to buy Apple shares? Cost and dynamics

Loan funds usually set fixed interest rates or floating rates in advance. For contributions to tangible and intangible assets, investors can require up to 49% or a share of the company. Long-term investments bring up to 15% annually from the company, starting from the moment the payback threshold is passed. When a company operates on profits and paying off taxes, the percentage increases. Mutual funds can buy back by assigning 10% of the amount from a failed investment.

But PAMM accounts can bring income up to 70% above the investor’s invested funds. Banking products will give up to 18-21% per annum, and leasing – up to 5%, taking into account costs. Real estate and metals will add 18-19% to the previous figure if the sales market is positive and demand is fast. The percentage of profit from investments in online currencies reaches 160-210%, but very rarely.

Algorithm for self-assessment of profit

To assess the effectiveness of investments for any deposit, use the formula:

1. Methods of expert assessments.
2. Method of statistical planning.
3. Method of horizontal and gender analysis.

We consider in detail the assessment of the payback of the product:

ROI = P/IC , where P is net profit, IC is the volume of investments.

Rate of return on investment:

ARR = CF/K , where CF is annual income, K0 is the amount of initial investment.

Further, after receiving the data, discounting cash flow methods are taken into account.

Kinds

The concept of “real investment” includes the following areas of capital investment, attracted from outside or sourced from internal reserves for a certain time interval:

The fact that real investments can be directed to the acquisition of fixed assets means their relative safety. Equipment has a stable value over a long period of time, and in case of failure or bankruptcy, it is subject to sale.

Financial investment is investment in shares and other securities issued (put into circulation) by an enterprise. In case of bankruptcy, they may partially or even completely lose their value. At the same time, there is a possibility of their rapid and significant growth. For example, the rapid growth of cryptocurrency or Microsoft shares.

Let's look at the advantages and disadvantages of the two main types of investments.

Financial investments have another advantage, which is expressed in the variety of forms available. They can be carried out in three markets: stock, foreign exchange and credit and deposit (by placing funds in bank accounts). All of them are equipped with electronic platforms, which simplifies their management.

Description of investment types

Let's take a closer look at each type of popular investment in our time, where you can save or increase capital. Each type can be interpreted by type of investment, depending on the purpose for which the money is intended.

Bank deposits

Banking products have long formed an ideal market for investments. Here, each participant can invest their capital to accumulate or increase. There are also conditions for legal entities who are given the opportunity to put money into circulation for the development of a project financed by the financial authority itself. The bank can act as a guarantor or as the object of financing itself.

Lending to borrowers

The other side of the coin of the previous type of investment. When a bank offers amounts at interest to needy citizens. This is the issuance of funds at preferential rates, the formation of a mortgage loan, leasing. The goal is for a bank or financial organization to increase its money supply. The consumer can use the bank’s money to create a financial niche for paying off interest and the amount itself, or invest in the purchase of real estate.

Venture funds

Venture funds are financial organizations that invest their own money and investors’ money in startups, early-stage projects and small businesses. According to statistics, a venture fund is recognized as the riskiest type of investment, since almost 80% of investments do not pay off, the remaining 20% ​​allow you to earn as much from contributions to the project as is required to cover losses.

Therefore, they still exist due to risks. Here it is important to choose a strategy and analysts who can predict benefits in the context of inflation and the difficult economic situation of the country and achieve them.

Currency, securities, real estate, metals

Currency markets (in particular Forex) have always been famous for quick money. These are simple deposits into the purchase of currency. Let's say the dollar exchange rate is 10 units. The investor buys at this price for $100 and then sells for 15 units when the price rises. Thus, each dollar will bring him one and a half times more than he spent. The net gain will be about 30%.

Interesting: 14 ways to increase money without risk

Securities also allow you to benefit from price differences. Having purchased it at one price, you can then sell it at another, or remain the owner until the company enters the international level. Owners of shares can receive income from companies and also influence decision making in the company depending on the number of holdings.

Real estate and precious metals are eternal markets, since the former is always replaceable, and the latter disappears over time. Investments in real estate were discussed above. Individuals or legal entities (developers, investors) can receive quick money and interest from the sale of objects. As for metals and stones, these are long-term investments. Subjects are stored in banks, storage cells. In 90% of cases, this forms the bank's capital reserve. If the owners of the bullion take it in cash, the bank will go bankrupt.

On the other hand, metals will never bring the necessary income if they are not in circulation. Therefore, in order to receive interest from the use of minerals by a bank or financial institution, it is important to always replenish reserves or leave bullion for lifelong storage.

If you decide to invest money in metal for the purpose of subsequent resale, you should give preference to typical popular types. A stable price increase may attract investors to metals that will be used in the construction and technology markets. Even investments in the mining of zinc and copper can bring in “real and lasting” money, after which the investor sells the mining technology or a company for processing it.

Private stock markets, mutual funds, ETFs

Mutual funds and venture mutual funds have proven themselves to be fast and relevant ways to increase capital, with a relatively low level of risk, compared to direct investments in startups and other small businesses.

The monetary capital of a mutual fund is formed at the expense of investors, and the direct management of the money is taken over by the management company, which decides to allocate funds in one volume or another to an entire portfolio of companies. This is especially true for venture investments: the investor must have high qualifications and experience in order to correctly distribute investments in such a high-risk portfolio. In this case, it is much safer to trust the team of professionals from the mutual fund management company. Losing a small percentage of income to pay for their work in this case seems more than justified.

An ETF or exchange-traded fund is also a fairly attractive investment direction. Such funds include shares of companies included in any stock index. Let's say if you want to invest in the S&P 500 index, instead of buying shares of each of the 500 companies, you can invest in the corresponding share of an ETF that replicates the structure of the index. The shares of such an ETF are also traded on the stock exchange and their movement almost completely copies the dynamics of the selected index.

Internet and cryptocurrencies

Perhaps the riskiest way to increase your money in our review is trading in the cryptocurrency market. Perhaps only today they provide the opportunity to increase your capital tens or even hundreds of times in a matter of days, but do not be mistaken! The probability of losing everything is very high. The cryptocurrency world today is in its infancy, which is why the volatility of virtual coins is much higher than fiat money.

Even experienced Forex traders should not relax: crypto exchanges are a special world, with their own rules, where the usual methods of technical analysis do not always work, and news and completely unpredictable speculative manipulations play the most important role.

We advise novice investors to invest only amounts in cryptocurrencies, the loss of which will not harm your budget too seriously. And the most important thing:

Do not invest credit or borrowed funds in cryptocurrency trading under any circumstances!

Forms

When you have capital and your goals are clear, you can move on to choosing a form; investments in real assets are varied. Among the main forms the following list can be distinguished:

1. Acquisition of finished production or property . Of course, you can do everything yourself, that is, build everything from scratch, but sometimes it is easier to buy out an already functioning enterprise, or at least one that is equipped and for some reason not working. The simplest and most typical example is the purchase of a bankrupt. The question arises - how not to continue this unprofitable path. But this is a question for the investor. If he buys, it means he knows what he is doing. It is especially common in entire sectors of the economy - mergers and purchases of small competitors.
2. Capital investment in the form of construction . Here we invest in real assets - real estate or any infrastructure facilities. For example, you can invest in the construction of a cottage community or fulfill orders for equipment of a certain area for special needs. In general, many people engage in such investing, although, at first glance, it does not look like an investment in construction - they buy apartments at the construction stage, receiving a discount. Simply put, equity participation.
3. Reconstruction, repurposing and modernization as investments in a real sectorR. They are all related to construction to one degree or another. Reconstruction allows you to save money because you don’t have to buy a new and expensive object, but you can reconstruct the old one (and then sell it, as an option). The same is true with repurposing - this is often done with industrial real estate, this is due to the fact that they usually have all the necessary communications. Example – high energy consumption requires a special electricity supply. It's easier when it's already in the building.

   

   With modernization, everything is a little simpler - this can be called the usual improvement of any link in production, or the production itself as a whole. That is, for example, there is a weak point in the production chain that prevents performance from improving. This situation is far from uncommon, which is why such attention is paid to optimization, and this, in turn, implies the removal of ineffective elements and improvement (modernization) of simply weak ones. Investments in the form of modernization can have an excellent effect on the entire production as a whole.

4. Partial real investment . The simplest example is that we sell worn-out equipment and buy new, more efficient one. The reasons for selling or simply getting rid of equipment can be different - non-compliance with the requirements of supervisory authorities, changes in legislation in certain areas or in general, the need to change the production cycle or renewal due to market conditions. There can be many reasons; there is also such a thing as a planned update, not only of equipment, but also, for example, of raw materials.
5. Real investment in intellectual property or permitting documentation. You can’t just go ahead and start producing medical products. To do this, it is necessary to meet special requirements; sometimes it is easier to buy out a production facility that already has everything necessary. This is a combination of the first form and an intangible asset. Even your own development as a manager or just a specialist will cost money - and this is also an investment, and quite a real one at that.

   

This also includes technologies and innovative solutions. What was relevant yesterday may no longer be of use to anyone today. A typical example is the electronics industry. Of course, few people own enterprises that produce high-tech electronic equipment. Then you can look at simpler options - the same field of cosmetic medicine. Every year something new appears, and, oddly enough, it requires new equipment and staff training. Now there are two to three dozen different procedures offered, and the range is constantly growing.

Real investment for legal entities

Before you start investing, it is worth remembering that this is done by professionals! From an investor, such investments require knowledge in the field of labor management, knowledge of markets for goods and services and the specifics of their expansion, knowledge and skills in the field of financial investments and financial management, and much more. Otherwise, there is a huge risk of losing all your investments!

In order to start making real investments, you need to take into account risks, write business plans, and calculate the rate of return, payback time and many different parameters. Well, if you deal with this matter seriously and thoroughly. It seems difficult, but I will try to describe the main points that will help you navigate real investing if you still want to do it.

Firstly, if you have your own enterprise/firm, you will have to make real investments in any case, because it is this kind of investment, unlike financial ones, that gives you huge competitive advantages, especially over time.

Secondly, in Russia there is Federal Law No. 39-FZ “On investment activities in the Russian Federation, carried out in the form of capital investments.” Before making real investments, you can familiarize yourself with this law, so that later there will be no questions either to the law or to yourself. He is not big.

Thirdly, you need to understand what goals you are pursuing when making real investments.

Objectives of real investment:

1. Sometimes real investment is necessary when you simply cannot do without it in order to stay afloat - laws or circumstances dictate. An example of such an investment could be increasing the environmental safety of an enterprise and reducing the toxicity of waste, which the state may legally require of a company.

If these requirements are not met, it will be impossible to carry out activities in principle, so such investments become mandatory and necessary. The same investments include improving the working conditions of workers, if this is also required by the state by law.

1. Increasing the efficiency of the enterprise. In order for a company to remain competitive, its equipment, technological processes, conditions and work procedures for employees also need to be changed and improved. For example, it often happens that you come to work in an organization (as a hired worker or simply to perform some technical or programming work), and the computers there are so old that managers do several hours of work that requires time, in a good way, several hours. minutes, half an hour, maximum hour. Efficiency is extremely low, and without updating the technical base, no matter how hard you try to train managers to work faster, nothing will work.
2. If you are going to conquer new markets or increase your company's share in the current market, you will often have to make real investments to expand production volumes. If you produce a tangible product, then this is an absolute necessity for your business.
3. If you are going to create a completely new product or a completely new service and want to create a new enterprise for this, then you will make real investments in creating new production facilities.

When you decide on the goals that you are pursuing in your enterprise and for the sake of which you are going to make real investments, it is worth studying the main forms of real investment.

Selecting an object

When choosing a production facility where funds will be invested, some significant factors should be assessed. These include the following:

• the investment project is carefully studied;
• the market is analyzed to make sure that the goods produced are promising and in demand;
• possible distribution channels are located;
• customer reaction to products is assessed;
• all competitors and their proposals are identified;
• the estimated profitability of the project is calculated.

The risks and potential profits from work depend on the correct choice of investment object. If an investor does not have the necessary knowledge and capabilities, then he can use the help of specialists who, in a short period of time, will study a specific area of ​​\u200b\u200bthe company's activities, after which they will transmit a detailed report to the customer.

Key differences between investing and financing

The investment process begins with the expenditure of own or borrowed funds, and assumes in the future that income will exceed expenses.

Financing presupposes the availability of own funds or the receipt of funds from external sources, which the investor uses at the present time, but in the future must return them with interest if he received them on credit.

From the borrower’s point of view, a credit transaction is the financing of his activities, which involves receiving a certain amount of money, using this amount at his own discretion, subject to mandatory repayment and payment of interest. For the lender, funds transferred to the borrower for a certain period on the terms of repayment, in order to receive interest, represents an investment of his capital in order to generate income.

From a formal point of view, investing always begins with the expenditure of funds, and financing presupposes the availability or receipt of funds at the beginning of the corresponding financing project.

Risk analysis for an investment project

Each business firm makes its own decision regarding the acceptable level of risk. It identifies risks affecting the company's activities and decides what level of risk is acceptable to it. This kind of action is called a risk management system. This system includes qualitative and quantitative risk assessment. A qualitative risk assessment is the first step in a comprehensive approach to risk management. It can be relatively simple, its main task is to determine possible types of risk, as well as factors influencing the level of risk when performing a certain type of business activity.

As a rule, a qualitative analysis of business risk is carried out at the stage of developing a business plan. At this stage, the entrepreneur must identify the main types of risks that will affect the planned results of the company. The most commonly used method is the expert method.

Quantitative risk assessment. The purpose of quantitative assessment is to attempt to regulate this type of risk. There are various methods: 1. Statistical

The essence is to measure the statistics of losses and profits that occurred in a given or similar production, as well as to establish the frequency and magnitude of a particular return. Based on the analysis of the results, the most probabilistic forecast for the future is compiled. The main tools of this method are variation, dispersion and standard deviation from the mean. 2. Method of analogies

When analyzing the risk of a new project, data on the consequences of adverse risk factors on other projects and firms can be very useful.

When using this method, databases on the risks of similar projects, research data from scientific institutions, as well as in-depth surveys of project managers are used. This data is processed to identify dependencies in completed projects in order to take into account potential risks when implementing new projects. When using this method, it is necessary to take into account the specific features of the project used. 3. Method of expert assessments

The method consists of processing the opinions of experienced entrepreneurs and specialists in this field. 4. Economic and mathematical methods

These methods allow you to most accurately assess the level of business risk; all calculations in these methods are carried out using the apparatus of probability theory; two main methods are distinguished: 1) Modeling

2) Game theory - “playing out situations” - choosing the best possible strategy, evaluating the results.

Classification of investment risks (33)

It is believed that risk can and should be managed, that is, using various measures that make it possible to predict the occurrence of a risk event to a certain extent and take measures to reduce the degree of risk. In many ways, the effectiveness of risk management is determined by the classification of risks. Risk classification will mean the distribution of risk into specific groups according to certain criteria, aimed at achieving set goals. The risk classification system includes groups, categories, types, subtypes and varieties.

Depending on the possible result (of a risk event), risks are divided into two large groups: 1. Pure 2. Speculative Pure risks mean the possibility of obtaining a negative or zero result. These include natural, environmental, political, transport and part of the commercial risks (property, production and trade). Speculative risks mean the possibility of obtaining both positive and negative results. These include financial risks that are part of commercial risks. Depending on the main cause of risks, they are divided into the following categories:

1. Natural - associated with the manifestation of elemental forces of nature: earthquakes, floods, storms, fires, epidemics,

2. Environmental - related to environmental pollution caused by human activity

3. Political - risks associated with the political situation in the country and the activities of the state. They arise when the conditions of the production and trade process are violated for reasons not directly dependent on the business entity.

These include:

— the impossibility of carrying out economic activities as a result of the aggravation of the internal political situation in the country, military operations, nationalization, confiscation of goods, enterprises, etc. — introduction of a deferment (moratorium) on external payments for a certain period due to the occurrence of emergency circumstances.

— unfavorable change in tax legislation

— prohibition or restriction of the conversion of national currency into the currency of payment 4. Transport — risks associated with the transportation of goods by various modes of transport.

5. Commercial - represent the danger of losses in the process of financial and economic activity and mean the uncertainty of the results of a specific commercial transaction. Based on their structural characteristics, commercial risks are divided into: 1). Property - associated with the likelihood of loss of property of an entrepreneur or company due to negligence, theft, sabotage, overvoltage of technical and technological systems, etc. 2). Production - with losses from stopping or suspending production as a result of various factors, primarily with the loss or damage of fixed and working capital, as well as risks associated with the introduction of new equipment and technology. 3). Trade - risks associated with losses due to delays in payments, refusal of payment, non-delivery of goods, etc. 4). Financial - associated with the likelihood of loss of financial resources or cash and, in turn, will be divided into:

I. Risks associated with the purchasing power of money - Inflationary (money depreciates in terms of its purchasing power) - Deflationary risks (the risk that there is a fall in the price level, and as a consequence - a deterioration in conditions and a decrease in income) - Currency risks (the danger of foreign exchange losses that are associated with changes in the exchange rate of one currency in relation to another during inter-economic, credit and exchange transactions) - Liquidity risks (the risk of losses when selling securities or other goods and assets due to changes in the assessment of their quality and use value)

II. Risks associated with investing capital, or investment risks - Risk of lost profit (the risk of indirect or collateral financial damage - lost profit as a result of failure to carry out any enterprise) - Risk of decreased profitability (the risk of decreased profitability may arise as a result of a decrease in interest and dividends on portfolio investments, as well as deposits and loans. Interest risks - the danger of losses by commercial banks, investment structures, etc. as a result of interest rates on raised funds exceeding the rates on loans provided, as well as the risks of losses that investors in connection with changes in dividends on shares, interest rates on bonds, certificates and other securities. Credit risks - the danger of non-payment by the borrower of the principal debt and interest caused to the creditor, as well as the risk of such an event in which the issuer that issued debt securities will not able to pay interest or principal on them. Credit risk can also be a type of risk of direct financial loss) - Risk of direct financial loss

Exchange risks - the risk of loss from exchange transactions, for example, the risk of non-payment on commercial transactions and the risk of non-payment of commissions to a brokerage firm. Selective risks are the risk of making the wrong choice of investment types. Most often, this is a type of security, compared to other securities when forming an investment portfolio) Bankruptcy risk is a risk associated with the wrong choice of capital investment, leading to a complete loss of equity capital and the inability of a given entrepreneur or company to meet its obligations.)

Classification according to the probability of the expected level of losses 1. Acceptable risk is the risk that can lead to a complete loss of profit from the project.

2. Critical risk - associated not only with a complete loss of profit, but also with the probability of not receiving a certain share of revenue, up to the payback point.

3. Catastrophic risk is the risk that usually leads to bankruptcy of the company, loss of investments or property of the entrepreneur, and which may also pose a threat to the loss of freedom or life of the entrepreneur.

Analysis

First of all, a detailed analysis of financing is carried out. The real state of investment for a certain previous period of work is analyzed. The policy of managing real investments involves a thorough study of existing experience. It is important to assess the degree of investment activity of the company, as well as determine the degree of efficiency and effectiveness of programs that have already been started and completed at the previous stage of work. The analysis takes place in several stages. Real investment management should be based on objectivity:

1. First, they examine the dynamics of financing in the growth of real assets, as well as the percentage of real financing in the volume of total investments of the enterprise.
2. Then the level of effectiveness of individual financing programs and the degree of their successful implementation are examined.
3. Then it is important to find out how successful past investment programs have been. It is necessary to determine the exact amount of investment that is required to complete the programs.
4. At the fourth stage, the final stage, an analysis of the effectiveness of financing programs that have already been completed is carried out. It is determined to what extent they correspond to the planned indicators at the operational stage.

Content

Real investments - what are they? Financial investments - what are they? Types of real and financial investments Main types of real and financial investments The main relationship between real and financial investments Real and financial investments - their main differences Sources of real and financial investments 1. Own funds 2. Borrowed funds 3. Raised funds Management of real investments - 6 main steps Step 1. Conduct a market analysis Step 2. Determine the form of investment Step 3. Determine the required amount of investment Step 4. Select an investment project Step 5. Assess the effectiveness of the project Step 6. Monitor the implementation of the investment project Finally

Strategy

One of the key conditions for sustainable economic growth is the activation of the state’s investment policy. This strategy involves a system of measures that determines the structure, volume and directions of capital investments, an increase in fixed assets, as well as their renewal in accordance with the latest achievements of technology and science. Investment policy regulates and stimulates the financing process, creates conditions for the sustainable development of the socio-economic sector of the country, region, a certain industry, and entrepreneurship in general. The most important areas provided for in the strategy include:

1. Strengthening government support in the development of priority areas of the economy.
2. Formation of an institutional and legal environment conducive to stimulating investment in the real sector.
3. Coordination of regional and federal strategies src=»https://uspeshnick.ru/images/static/img/a/20380/203417/16067.jpeg» class=»aligncenter» width=»500″ height=»333″[/img ]

Investment projects for a portfolio of real investments

A portfolio of real investments is a collection of several investment projects in the real sector of the economy, subordinated to certain tasks and goals. Theoretically, such a portfolio could be owned by a private investor who invests his capital in various enterprises in order to minimize risks while maintaining high rates of return on investments.

However, in practice, a portfolio of real investments is, as a rule, a set of investment projects implemented at a specific enterprise with the aim of increasing production volumes, reducing production costs and expanding the distribution network.

Any portfolio of real investments is characterized by extremely low liquidity. It often has zero value as a speculative asset and can only generate profit for the investor in the medium to long term. This is due to the fact that the only way to make a profit from these investments is the production and sale of products (services) of the enterprise in which the funds were invested.

A portfolio of real investments is very difficult to manage and is directly related to the management of the enterprise itself. For this reason, the real investor is often either the owner of the company (individual or other legal entity) or the company itself.

Within one enterprise, a portfolio of real investments is formed from investment projects based on the general development strategy of a given business entity. Accordingly, profiting from these investments is directly tied to increasing production volumes, reducing costs and expanding the customer base.

As an example of such an investment portfolio, let’s take a small agricultural enterprise that is on the verge of large-scale expansion. The owners and management decide to implement several projects at once:

• purchase new tractors;
• acquire additional land plots for new agricultural crops;
• build a livestock complex;
• hire and train additional staff.

Each item on this list is a real investment project that can be financed both from the operating profit of the enterprise, and from funds raised from outside through the mechanism of issuing shares and bonds, or from credit funds. Well, all these projects together are combined into a single portfolio, which at the same time is the overall development strategy of this company.

Control

It is carried out by specialists who have the necessary knowledge and investment experience, and includes several stages:

• analysis of the past investment experience of the company and its competitors;
• determining the required amount of investment;
• choosing the form of real investment that needs to be implemented in production;
• search and identification of profitable investment projects;
• analysis of selected options for their effectiveness;
• creation of a real investment program;
• implementation of the selected investment program.

Among the numerous examples of financial investments, one can highlight Yandex, whose dividend quotes are constantly growing; one share of the company costs about 2 thousand rubles.

A simple example of real investment is the purchase of equipment for a furniture workshop, when you, as an investor, purchase a format-cutting machine and receive part of the profit, according to the agreement, from the sale of products that are produced using this equipment.

Real investing is an excellent alternative to passive income, and for large enterprises it is impossible to stay afloat and develop without them.

Profitable investment options

As I already wrote, there are a lot of investment options, and the more money you have, the more opportunities open up. They can vary greatly in terms of profitability, but in general they comply with the rule:

The higher the profitability of an investment instrument, the higher the investment risks!

Many novice investors are unaware of this pattern and invest their money where they offer the highest percentage. And then they are unpleasantly surprised when they lose their deposits. So, let's figure out where you can invest money today and what risks are inherent in each investment instrument.

Bank deposits - low returns and low risks. Probably the most famous and simplest way to invest money: a person comes to a bank, leaves money there for safekeeping and receives a fixed bonus for this in the form of interest on the deposit. Among the advantages are the predictability of profit and insurance through the state deposit guarantee fund. Unfortunately, the return on bank deposits is close to inflation, and you won’t earn much from them.

Stocks - Returns and risks depend on the stocks chosen. A traditional method of investing, known since the 17th century: an investor buys a share in a joint-stock company and receives the right to dividends and part of the property in the event of liquidation of the company. It is also possible to make a profit of hundreds and thousands of percent due to the increase in the price of the company’s shares. Pros: high historical returns, wide variety of options, good liquidity, ability to invest online.

Bonds - yield on average is close to bank deposits, there are risky options with high rates of return. Bonds are debt securities that, after a certain period of time, give the right to return their face value with interest (coupon income). The nominal and real value of bonds may differ, which makes it possible to earn on the difference in prices (discount income). Together with shares, they are included in the traditional set of a conservative investor.

Mutual investment funds (MUIFs) are organizations that professionally manage investors' capital in the securities market. Profitability can be either higher or lower than bank deposits, depending on the composition and success of the mutual fund's investment portfolio. Investors receive part of the fund's profit in proportion to their contribution (share).

Real estate - profitability and risks are low, but the volume of such investments in the world exceeds any other investment options. And all because real estate is considered one of the most reliable and profitable investment instruments in the long term; good real estate has been relevant for decades. There is a distinction between residential and commercial real estate, but the ways of making money are the same - renting or resale.

Investing in art is one of the classic ways of investing, which can bring good profits to those who understand this area. The most famous way to invest in art is to buy paintings by famous artists. The price of a painting does not depend on the cost of its creation, but on the fame of the artist, the uniqueness and value of the painting, its age, the popularity of the style and the historical era.

Precious metals , more precisely gold, silver, platinum or palladium. You can invest in metals in different ways: buy bars, gold coins or jewelry, trade gold through a broker, open unallocated metal accounts. Investments in precious metals are made for years in advance; growth trends can last a very long time (2001-2012, for example), just like their absence (gold prices have not risen since 2013).

Investments in education are necessary for every person in the modern world, but everything does not end at school and university. No matter what industry you work in, there is always something to learn. Perhaps the best financial return can be obtained from learning how to invest and manage personal finances. It is also beneficial to invest in professional courses related to business.

Forex investment is an interbank currency exchange market with a huge turnover (several trillion dollars per day), which can now be accessed by investors with any income level. The following methods of investing in the foreign exchange market are of greatest interest: PAMM accounts (trusted capital management), copying transactions (trading using successful public strategies), trading advisors (fully automated trading).

Cryptocurrencies are a modern way of investing that experienced an incredible boom in 2021 and an equally impressive decline in 2018. The prospects for investing in cryptocurrency are unclear, investing in it for the future is risky, but the fact that this technology is the future is a fact. The most famous and popular is the Bitcoin cryptocurrency, followed by all the others, but in 2019-2025 new currencies from big business will certainly appear that could shake Bitcoin’s leadership.

Financial pyramids and HYIPs are a trap for beginners and an interesting investment opportunity for experienced investors. New pyramids/hype schemes appear and disappear every day; investing in them is very risky. The main working tactic is to double and withdraw the initial deposit. To improve results, many investors engage in advertising and attracting new clients.

Startups are an interesting modern way of investing, which, if successful, can bring very large profits. A startup is not yet a ready-made, well-functioning business, its main value is the idea and the team, and the end result of the work is a product that can attract the attention of a large number of customers. It was from startups that such giants as Apple, Twitter, Facebook and Amazon grew up.

Investing in websites is the purchase of Internet resources in order to make money from advertising. An interesting way to invest money, a good resource pays for itself in 1-3 years, plus you can always resell it. To successfully invest in websites, it is highly advisable to understand website building - the words HTML, SEO, WordPress should not be intimidating. It is even more profitable to invest in your own website, which you know well and understand where it is more profitable to spend your budget.

Social networks are an interesting platform for investing. Everyone who understood their power in time has already gathered an audience around them and is successfully promoting their business or advertising other people’s products. Thanks to investments in social networks, even now you can quickly gain subscribers and start earning income from advertising your products or through offers from advertisers who will find you themselves.

In order not to lengthen an already lengthy article, I talked about each type of investment only briefly. I plan to devote a separate article to this issue in the future, so subscribe to blog updates so as not to miss anything.

Grade

The economic assessment of material investments is carried out according to the classical scheme: indicators of return on investment, the payback period of investments in an investment project, the present net value and the internal rate of return of the project are determined. The main thing for an investor is the internal rate of return indicator. If this indicator is lower than the refinancing rate of the Central Bank, the investor will prefer to invest his funds in more efficient assets or even in financial assets with a higher yield.

Risk management in real investing

Analysis and risk management when making real investments is one of the main tasks of the investor. Although investments in the real economy are considered more reliable compared to the financial sector, risks still exist. This is an objective phenomenon that exists both at the industry level and at the level of an individual enterprise. The specifics of managing them is a separate science.

When implementing any investment project, one must take into account the possible risks that investments will not be able to pay for themselves for reasons that arise at the macroeconomic and local level. For any investment project, an assessment of the degree of risk is made, taking into account its specifics, and possible methods and features of their management are also provided. The following types of risks are distinguished:

1. Risk of insolvency. This implies the possibility that during the implementation of the project the investor will run out of money and the project will be disrupted, and the investments already made will be lost.
2. Design risk. The danger of having significant errors in the business plan or technical design that could greatly affect the profitability or even the possibility of implementing the original project.
3. Execution risk. Unskilled performers can ruin all the original plans by doing the job poorly, taking too long, or increasing costs excessively.
4. Marketing risk. The possibility that consumer demand for the product for which the project is being created will be lower than expected.
5. Inflation risk. As a result of inflation, the costs of implementing the project will greatly increase, or the final real profit will be less than the real costs.
6. Tax risk. The possibility of new taxes appearing or existing ones being increased, which will cast doubt on the economic feasibility of the project.
7. Structural operational risk. During the operation of an already implemented project, current operating costs may increase for various reasons and reduce its profitability.

And these are just some of the most common problems that have to be taken into account when conducting risk analysis and management.

Risks

Investments in real assets are potentially more profitable than portfolio investments, but usually less profitable than venture or private equity investments. Obtaining returns from real investments involves certain risks:

• financial – lack of funds to implement the project;
• marketing – incorrect calculation of profit from investments;
• inflationary – depreciation of asset values;
• human - inexperienced specialists can harm the project

There are other types of risks that do not depend on the enterprise. For example, the collapse of the country's economy, war, the introduction of new taxes, etc. To minimize risks, real investment management should be carried out by highly qualified specialists who have experience in identifying common problems at the planning stage and eliminating them during project implementation.

Investing as a tool for preserving and increasing capital

Profitability. Forecasting. All these components are very important for the correct approach to investing money. Taken together, all factors can affect the result. If one of them borders on risks, the chances of positive income will decrease by 10%. In an ideal economy (when calculations are made using formulas taking into account possible predictable risks), the share of investments allows you to win 80% of the income. The remaining 20% ​​is attributed to possible force majeure. This is a theoretical aspect, but in real situations everything is much more complicated.

To preserve and increase capital, various methods and strategies are often used - some trust the banking sector, others invest in business. The refinancing rate, market share and the macroeconomic situation as a whole are also taken into account. Therefore, many businessmen, investors and savers are divided by types and types of investments.

Stock

Shares are equity securities. By purchasing a share, an investor invests funds in the authorized capital of the issuing joint stock company and automatically becomes a co-owner of the joint-stock company, acquiring the right to receive part of the profit - dividends.

Promotion

There are three ways to make a profit by investing in stocks:

• making a profit based on an increase in the exchange rate, for example, an investor buys a share at a cheaper price and sells it at a more expensive price;
• making a profit based on a decrease in the rate, for example, an investor can take shares from a financial intermediary - a broker, sell them at a high price, and when the rate decreases, can buy back the shares at a lower price, after which he returns the shares to the broker, and the profit received from the difference the buying and selling rate goes to the investor;
• receiving dividends, usually once a year or once a quarter.

There are two types of promotions:

• ordinary - their owners have the right to directly manage a joint-stock company, to develop a dividend policy, their liquidity on the stock market is higher than that of preferred ones, and profitability directly depends on the rate of inflation in the state.
• privileged - their owners have the right to priority payment of established interest on the profit of the joint-stock company, payment is carried out within a strictly designated period, regardless of the financial results of the joint-stock company.

  

The advantages of investing in shares are: high profitability of assets, minimal starting investments (you can purchase a small share of shares in a joint stock company, and later, as they are issued, expand your stake). There is also a downside - disadvantages, including: high risks, commission fees if an investor purchases shares through a broker.

Sources of real and financial investments

Both real and financial investments require a certain amount of initial capital. Somewhere more, somewhere less. It all depends on the object in which you intend to invest your funds. In practice, there are three main sources of funds for investment.

1.Own funds

Both real and financial investments can be financed from your own pocket. In real investing, this “pocket” is the company’s free cash. And in financial terms, this is the “pocket” of the investor himself.

2. Borrowed funds

Often, when there is a lack of own funds, investors attract borrowed funds. As a rule, loans are taken out from a bank.

In case of real investment, taking out a loan justifies itself. It pays off in spades in the end. But when investing financially, it is better not to do this. Here the end will no longer justify the means.

3. Funds raised

In this case, funds are taken from the state or from third parties - shareholders, equity holders, co-owners.

Funds are usually raised by making real investments. When it comes to financial investing, this is not advisable.

Based on the foregoing, it becomes clear that all of these methods listed above are used only for real investing. When investing financially, it is advisable to use only the first method, that is, only your own funds.

Bonds

To make money on the stock market, but with less risk, investors prefer to invest at least part of their money in bonds. Their advantage over stocks is their more stable and predictable price. In this respect, bonds are similar to bank deposits, but they bring higher income - on average, 20% higher than deposits. In times of crisis, bonds are considered the main protective asset.

Pros. Higher yield than on deposits. At the same time, bonds provide a clearly predicted and fixed income - this makes them easier to manage than shares. Bonds are also highly liquid: they can be easily sold on the market without losing profit.

Minuses. There is a risk that the issuer will go bankrupt. Yes, for large players such a probability is low: blue chips rarely burn out, and federal, subfederal and municipal bonds will almost certainly remain in price. But smaller companies may suffer from the crisis, which will have a detrimental effect on investor income.

Investment risks

For people who are not used to investing, the word “risk” seems quite scary, because it means the chance of losing money, often earned through hard work. However, the truth is that money in any form and in any place is constantly subject to various investment risks - even if it is in a safe, inflation will still take its toll. To at least not lose money, you have to invest.

I think from the last section of the article you already understood that risk-free investments do not exist in principle. Whatever investment instrument we take - deposits, shares, real estate, metals, PAMM accounts, crypto - each is subject to at least several sources of risk. They can have different effects on the outcome, but the investor has to take them all into account if he wants to increase his chances of making money. Of course, it is possible to find assets with minimal risk and additional guarantees, but their profitability will allow the maximum to defeat inflation - a bank deposit, for example. But if you want more, you will have to take risks, because there is a rule proven by theory and practice: “The higher the profitability, the higher the risk.”

However, risk is a beast known to science and you can well predict why money may be lost, and forewarned means forearmed. Each investment instrument has its own set of risks, for example, when investing in PAMM accounts, you may encounter the following:

• trading risk - the probability that a PAMM manager will trade unsuccessfully;
• non-trading risk - the likelihood that the broker through whom I invest will go bankrupt;
• currency risk - the probability of depreciation of the deposit currency on a PAMM account or an unfavorable change in the exchange rate.

It wouldn't be much fun if economics hadn't developed various ways to protect against risks. The simplest and most effective is the creation of an investment portfolio taking into account the requirements of competent risk diversification. Investing in several instruments at the same time allows you to smooth out the roller coaster of individual investment instruments into a smooth, pleasant growth line:

The return graph of a portfolio of three instruments is much smoother than each individual asset graph, which indicates lower risks.

Another way to reduce investment risks is to select only the highest quality options from the entire list of offers. That is, do not invest money in everything you like, but only in the best or the best. In this case, the chances of earning and not losing become much higher.

Diversification and careful selection of investment instruments are the most effective ways to reduce risks, but they do not completely eliminate the likelihood of losses. Unfortunately, you can’t invest money without risking anything, you just have to get used to it. If, of course, you want to beat inflation.

Precious metals

Investing in precious metals is almost always popular among investors. This is due to the fact that this type of metal has always existed and will exist tomorrow and the day after tomorrow. In addition, precious metals are always in demand. This asset is often called eternal. This feature of this type of asset is used as risk diversification. It is generally accepted that the cost of precious metals cannot fall to zero like the cost of shares; therefore, investors often purchase these metals to neutralize (reduce) their risks.

You can invest in precious metals both in material form (ingots) and by purchasing metal through banks by opening metal accounts. Precious metals usually include gold, silver, palladium, and platinum. This tool is actively used in long-term investment strategies.

Real investment for individuals

Individuals can make real investments in various ways:

1. Purchase real estate, land and then rent it out. Or wait until the value of the property increases and sell it for much more;
2. Purchase any equipment and also rent it out. Or wait until the price of the equipment increases and sell it for much more. Only here it is important not to wait, otherwise new technologies can completely devalue all your equipment;
3. Register your right to any intellectual property that will generate income in the future;
4. Invest in precious metals or stones, collectibles, etc.
5. Organize your own company.

The first 4 types of real investment can be carried out by any individual with or without status. Drawing up the documents necessary to carry out these types of activities does not take much work, so you do not need to hire an accountant, you can do everything yourself.

But when you create your own company, the opportunities for real investment become much greater, but the responsibility for taxes and accounting also increases, so you will have to hire an accountant. Usually in such cases an LLC is already registered.

Deposits

Banks attract money from individuals and companies to then lend it out or trade in financial assets. They guarantee repayment of interest on the deposit, as well as a full refund of funds upon expiration of the period chosen by the client.

There are deposits in foreign currency, but practice shows that such investments are unreliable.

Two important aspects.

1. In Russia, according to the law, the state will reimburse the full amount of the deposit in the event of a bank collapse, if it is less than or equal to 1,400,000 rubles.
2. Now the best strategy is to choose a longer term, because the deposit rate follows the key rate, and the Central Bank intends to lower it.

Features of real investments, their pros and cons

1. Real investments do not depreciate in value the way a national currency does. If the exchange rate can jump back and forth, and the value of money among the population, accordingly, too, then the value of real investment objects does not jump anywhere at such a pace.

For example , for individuals who bought apartments for renting or resale: the apartment gradually increases in price, and its growth rate often exceeds the rate of inflation in a stable economy. An apartment does not depreciate in value like currency. Real business investments also give a huge impetus to its development, outpacing inflation for a long time.

1. Real investments carry fewer risks (an apartment will most likely always cost a lot of money, a machine or machine will most likely work for a long time and cost a lot). You don’t need to risk an apartment or a machine, a patent, like a financial instrument on the market.

If you have made real investments, you see them in a material form, and real investments do not carry any “air” like in the market.

1. At the same time, the return on real investment is high . This is not a minimum percentage in the bank, not dubious and incomprehensible management of your assets, this is a real increase in production efficiency that brings you profit every day. Perhaps not right away, but in the future, yes.
2. It is with the help of real, rather than financial, investments that a business has the opportunity to develop faster, more efficiently, better, and wider . New technologies will increase production efficiency, new equipment will allow you to produce higher quality products, which means you will have more customers and, accordingly, you will be able to earn more money.
3. Real investment objects can quickly become obsolete due to rapid technological progress. It seems that they updated the equipment, improved the technological processes, and while all this was being implemented and developed, the competitor had already bought something more technologically advanced, because suddenly a completely new technology appeared on the market. It may be like that. Therefore, real objects require continuous investment and support.
4. Real investment objects are very illiquid. While any financial instruments can, in principle, be sold very quickly (except for crisis and stagnation), equipment, especially equipment that has already been in use, most often cannot be sold quickly.

Or the purchased raw materials may not have time to be sold or sold, and they will deteriorate. But there will be nothing for financial instruments, and they will also sell faster on any free financial market.

If you have already firmly determined that you want to make real investment in your organization, then you need to understand through what means this real investment can be made.

Currency market

Ways to invest in the foreign exchange market:

• Direct purchase of currency;
• Independent trading in the currency section of the stock market (futures on currency pairs);
• Independent trading on the FOREX foreign exchange market;
• Investing in PAMM accounts on FOREX.

A simple purchase of US dollars or Euros, as the entire recent history of the domestic economy (with its numerous crises and other Black Tuesdays) shows, is a very effective way to invest Russian rubles. Just take a look at the chart below.

Dynamics of changes in the dollar exchange rate against the Russian ruble

And this is not the whole price history, but only since 2009. Before this, as you probably remember, the dollar was even cheaper.

In addition, it is possible to invest in so-called currency pairs. This can be done both in the currency section of the stock market (through currency futures) and directly in the FOREX market. By definition, doing this through the exchange is safer. After all, exchange trading is a well-established and legally regulated mechanism, in contrast to trading on FOREX, which is carried out through the intermediary of dealing centers (many of which generally operate under a betting license).

In general, it should be noted that currency pairs are a tool for speculation rather than for investment. They can also be used to hedge risks.

Among other things, there is also the opportunity to invest in PAMM accounts of managing traders trading in the foreign exchange market. However, due to the fact that PAMM investing is carried out through the same dealing centers, this tool also cannot be called reliable.

Financial investment markets

The main markets in which financial investments are made include the following:

• Stock market;
• Currency market;
• Market of precious metals and alloys;
• Cryptocurrency market.

Financial instruments such as shares and bonds are traded on the stock market In addition, here you can invest in various types of derivatives, such as futures and options. The stock market includes exchange and over-the-counter components. The securities of the largest enterprises and government securities are traded on the exchange market. The over-the-counter market supports the turnover of those securities that, for various reasons, were not included in the listing of official exchange platforms.

The foreign exchange market represents the entirety of foreign exchange transactions taking place in the world. Its basis is the interbank FOREX market, which does not have any specific trading platform (like a stock exchange, for example), but represents the entire set of communications that ensures communication between its main participants (banks, large transnational companies, investment funds, brokerage companies , dealing centers, etc.).

The market for precious metals and alloys includes both transactions directly with precious metals themselves, and with securities tied to them. The main metals (which account for the lion's share of all transactions) in this market are: gold, silver, platinum and palladium.

The cryptocurrency market is a relatively new formation in the financial markets. It appeared at the time of the creation of the world’s first cryptocurrency, Bitcoin, and this significant event took place in 2008. Partly due to its relative youth, this market has not yet been fully formed. Many countries do not have a specific legislative framework to regulate it, and in some places it is generally outlawed.

The cryptocurrency market includes all the infrastructure that ensures their existence and circulation. This infrastructure includes: cryptocurrency exchanges, exchange offices that allow the exchange of cryptocurrencies for fiat money, computing power intended for generating and storing cryptocurrencies.

Successful examples

Let's not reinvent the wheel and immediately turn to the powers that be for advice. As decades of proven practice has shown, the most profitable financial investments are those that are long-term in nature. The great investor F. Carret liked to say that the vast majority of fortunes were made by people who did not sell the securities they purchased for years. The basis of the long-term strategy is transactions that in the long term turn into millions in profits. As a rule, such investors work on the basis of macroeconomic indicators, study news from newspapers and market conditions. No complex mathematical calculations are needed for this type of investment.

Consider how the eminent investor Thomas Price bought shares of certain companies after careful analysis of the financial performance of an individual company and the industry as a whole. In 1954, this man invested 10 thousand dollars in securities, and 40 years later his capital amounted to 2.3 million. This may seem too long to some. But children and grandchildren will certainly remember old Thomas with gratitude.

Managing real investments - 6 basic steps

Financial investment management is similar to the method written in the article “Investment Management”. Below we will look at how to properly manage real investments.

Real investment management is a truly complex process that requires investors to have sufficient knowledge, skills and experience. And also, the obligatory presence during the entire investment process of cold and sober calculation, combined with an analytical mind and good intuition.

The investor must necessarily justify the need to invest funds, develop a consistent and step-by-step plan, and conduct constant monitoring of the project.

Step 1. Conduct a market analysis

Before any investment, it is imperative to study the market conditions and other economic parameters. For example, you should not start releasing a new product without first studying the demand for it.

Step 2. Determine the form of investment

Any investor must independently determine for himself the forms of investment.

For example, for large production facilities this means expansion and construction of new facilities. And for smaller enterprises, this means modernization and/or automation of production in order to reduce costs.

Step 3. Determine the required amount of investment

Any investment, like money, loves a thorough, thorough and accurate account. And before investing, it is imperative to make an accurate calculation of why, why and how much money needs to be invested.

Therefore, every enterprise must have a special economic department, which must make all the necessary calculations. If this is not the case, then you need to contact specialists, for example, an outsourcing company.

Step 4. Select an investment project

At this step, it will be necessary to select a specific investment project, which, first of all, depends on the goals and specifics of the enterprise.

The investment project itself is a document that must indicate the following indicators:

• purpose and timing of investment;
• the main idea of ​​the project;
• options;
• the amount of resources required for implementation;
• calculation of performance indicators.

As a rule, project development is carried out by specialists with appropriate education. If these are not available, it will be necessary to hire third-party specialists.

Step 5. Assess the effectiveness of the project

Specialists with special education and experience should also evaluate the effectiveness of investment projects.

Here the necessary costs, amounts and timing of the planned profit must be taken into account, on the basis of which an efficiency indicator is derived. After which a detailed and step-by-step plan for the implementation of this project is drawn up.

Step 6. Monitoring the implementation of the investment project

Careful and high-quality control over the implementation of an investment project is the basis of SUCCESS. Therefore, this must be taken very seriously. Moreover, real investments, unlike financial ones, require the direct participation of the investor. And to manage such a project you need time, patience, and a strong and strong character.

In addition, in addition to negotiating and monitoring the implementation of the project on site, it will be necessary to ensure that the money is not stolen, and also manage to efficiently manage the work of the staff.

Comparison

To summarize the above, having assessed the features and characteristics of both types of investment, a cheat sheet was compiled that takes into account their similarities and differences.

If you are not a millionaire, you should not consider real investments from a practical point of view, but you can invest money in financial instruments - stocks, bonds, other securities, precious metals, mutual funds.

Even though this type of investment is less profitable, and the risks here are increased, with skillful management, gaining experience and knowledge in the economic sector, you can count on increasing your own capital.

What is real investment?

Someone may decide that exploring new directions and horizons is a thankless task, especially if you have some capital and have already managed to invest it in a profitable business. Why look for something new if things are already going well?

But such an inexorable thing as statistics shows that more than half of successful investors were able to count on high income precisely because of the regular development of new directions.

Real investments are a little-studied area for private individuals; it is believed that this is the domain of large companies, because the amount of financial investments is substantial. Real business investments represent the purchase of assets directly related to the production cycle.

For example , there is a dental clinic that does not have available funds. The investor purchases the necessary new generation equipment - modern medical equipment, in return he will receive a portion of the profit according to the terms of the contract.

There are several most popular forms of real investment:

• Purchase of new offices, factories, industrial enterprises - ready-made complexes;
• Construction and expansion of real estate;
• Opening of additional branches and representative offices;
• Changing the production cycle and technologies - through the purchase of new innovative equipment;
• Purchase of patents, trade names, brands, rights to use them;
• Investing in scientific developments.

This type of investment in Russia is not in high demand, especially among individuals. This is not surprising: entry requires capital measured in millions and billions of rubles . But the payback here is much greater, and the risks are reduced, because the money is directed to support material production.

Types of real investments

Investing in production development is not always voluntary; it also happens that investment is mandatory - without it, the company will not be able to function.

We are talking about compliance with environmental regulations, safety regulations, compliance with regulations and standards. As an example, a plant produces vegetable oil and pollutes the air, an investor invests money in the purchase of filters for an agreed percentage of income.

However, there is a general classification that divides investments into three types:

• Gross is a generalized type of investment that was made during the period of operation of the company or during the reporting year. All funds aimed at modernization, consolidation, increasing competitiveness, and improving productivity belong to this group. In fact, this includes capital that allowed the enterprise to modernize its production assets;
• Updates - it’s no secret that the essence of any company’s work is not only to function stably, but also to develop - not to stand still, to offer customers new products and opportunities. The enterprise directs free money to the production of additional product categories, development, and innovation;
• Expansion - includes external expansion, when the company opens new offices, conquers additional industries, or enters the national or international market. You should invest money only if the company's products are in demand. For example, Samsung sees that its electronics are quickly selling out; in order to meet the needs of the population, new areas are purchased, workers are attracted, and additional workshops and factories are opened.

Money for development, regardless of the type of investment, a company can take from its own funds, obtain loans from banks, or attract other enterprises and individuals interested in making a profit. It is often recommended to seek help from the state: if the product is strategically or socially significant, useful for the population, rare or innovative, you can count on business subsidies.

Examples of real investments

To make it easier to understand the mechanism of working and increasing capital, we can give a couple of examples of real financial investments:

• The Wimm Bill Dann company, which produces dairy products, attracted investors to purchase new equipment. The goal is to maintain existing positions in the market, reorient production, that is, preference was given to goods from the budget category;
• Kerama Marazzi, a leading Italian manufacturer of ceramic tiles, decided to expand production by purchasing new premises - an additional workshop. For this purpose, investors were attracted who purchased the former Coca-Cola plant building and converted it to solve new problems.

Often real investments are not at all focused on obtaining benefits, but are socially significant.

For example , the city administration of Orel was looking for investors to install LED lighting on the streets - Rostelecom agreed to carry out the work. The company expects only to return the costs incurred without receiving income. Another example is the organization of toll travel across the railway bridge in Ryazan, which allowed local residents to significantly save time in morning and evening traffic jams.

What is financial investment?

The definition of financial investment, as the name suggests, is investing money for future development, generating income over a short or long period.

Every person, familiar or unfamiliar with the world of business and capital, still makes financial investments. For example, when he pays for his education, he goes to language courses in order to find a well-paid job in the future.

However, often under financial Investments are still understood as cash investments of available funds in all kinds of instruments. The field for activity is quite wide, so you can choose one of the areas of work:

• The stock market is certainly popular among beginners, although only a few achieve results here. Entry does not require a large sum, but you do need knowledge, an understanding of the principles of how everything works;
• The credit and depository market is less risky; capital is spent on the purchase of government bonds and corporate debt receipts. As an option - bank deposits, they can also be considered as a low-income, but practically non-risky way of obtaining benefits;
• The foreign exchange market - the object of the investor in this case - is a currency that can be traded on special electronic platforms, playing with quotes and exchange rates.

The main advantage of financial investments is their simplicity - even with a limited amount of capital, without sufficient experience and knowledge, you can enter a certain niche and expect to make a profit. For a beginner who does not have access to real investments, this option is the most profitable, and indeed the only possible one.

Types of financial investments

The choice of direction for investment is huge for every investor, so you need to weigh the pros and cons and understand which option is attractive in your case. It is necessary to determine what is more important - high income, the opportunity to increase capital in a short time, or risk reduction? The most popular types are:

• Futures and options contracts - derivative financial instruments require preparation for the investor, otherwise there is a high probability of losses. Working on the stock exchange also requires time, but the entry size here is minimal. The risk is significant - you can get both profit and loss;
• Mutual funds - the idea of ​​investing is that the investor buys securities from the fund or through an intermediary. Asset management is carried out by a specialist; accordingly, the amount of income directly depends on his abilities and on the policy of the chosen organization;
• Stocks are the riskiest, but most attractive way to invest, allowing you to make the maximum profit if the company prospers. This security is an opportunity for speculation, that is, when its prices increase, the owner can sell the asset on the stock exchange. On the other hand, it will be possible to receive dividends and interest on the company’s income on a regular basis. If the company turns out to be unprofitable, you risk only the amount of money that you spent on buying shares;
• Investments in precious metals - gold, silver, platinum are constantly growing in price, but even if there is a decline, in the long term you can see a stable increase. This type of investment is less risky, but is long-term - buying and quickly selling precious metals, receiving income, is unlikely to work, such a transaction has no economic feasibility;
• Bonds are usually represented by large corporations and the state; they are easy to buy, for example, at Sberbank, but such an instrument is more classified as debt obligations. The risks here are always reduced, although they exist, but the income is not very large - a comparative assessment makes it clear that bonds are sometimes less profitable than regular time deposits.

Financial investments are distinguished by the degree of risk, income, features and period during which one can count on profit. We can say that such investments are an ideal option for beginners; they do not require a large amount of capital. However, due to the fact that people without experience buy stocks, futures and options, and then “merge” them at a reduced price, there is an opinion that the market risks are enormous, and some sincerely believe that they cannot count on income at all costs.

Examples of financial investments

There are a lot of examples of companies raising funds from outside; this is a common way to improve their financial situation. Money should be the source of enterprise development. For clarity, two examples can be given:

• Sberbank - dividend yield is 5%, purchasing preferred shares allows you to increase your capital during the year, the average price of one security is within 200 rubles;
• Yandex - the dividend rate is about 6%, quotes are growing steadily, and you can buy one share of a successful company for about 2,000 rubles.

It will be possible to invest in the development of hundreds of enterprises around the world. PayPal, Netflix, Apple, Amazon are obvious proof of this. In addition, investors should pay attention to less popular, but extremely promising companies.

Leasing as a method of financing real investments

Leasing as a method of financing long-term investment projects is an excellent alternative tool for raising funds. In a stagnant economy with high inflation and high rates on bank loans, leasing allows you to successfully implement expensive investment projects with a long payback period. How it works?

Inflation can eat up all the profits from long-term investments, so an outside investor is not interested in a real investment project designed for a long term. If the enterprise does not have enough of its own working capital for such a project, it only has a bank loan. But due to high interest rates, investments in real assets may turn out to be unprofitable.

The solution to this situation is leasing. A third-party investor purchases the relevant property (for example, industrial machines) and leases them to the industrial enterprise. As a result, the investor receives a rental profit that covers the level of inflation, and at the same time remains the owner of the property, which can be sold after the lease agreement expires.

In turn, the enterprise receives for use the property it needs, the rent of which is covered from the profit generated by this property. Moreover, the cost of rent is lower than payments on a bank loan.

One more fundamental point should also be noted regarding this source of investment financing. A bank loan can only be taken out from a bank in the country in which the enterprise is located. The law prohibits direct lending from foreign banks with lower interest rates. But a leasing agreement can be concluded with non-residents, that is, you can rent property from companies and individuals registered in another country.

By the way, the decisive prerequisite for the influx of real foreign investment is precisely the high cost of bank loans in our country. Foreign investors are willing to participate in leasing schemes, which are quite safe and at the same time provide all parties with excellent conditions for making a profit.