Having available funds, you should think in a timely manner where they can be invested, because money is depreciating, and bank deposits are not profitable enough. One of the good and reliable ways is to invest. True, in order not to waste available funds, you first need to understand the nature of investments and their classification. The types of investments are quite diverse, and the division is based on several criteria. Consider this topic in more detail.
General view
Guided by the concept and classification of investments, you can successfully choose how and in what to invest available funds. The conditions of a modern market economy make it possible to carry out such operations in various forms, but the risks vary significantly. You can invest in enterprises and securities. This is implemented through stock markets. You can invest in real estate and precious metals, property or intellectual property, promising projects of different directions. With an impressive amount, you can invest in science. True, this requires not only decent financial resources, but also considerable time. The simplest and most widespread option is to purchase securities in the relevant market.
Specialists adhere to different investment classification systems. It depends on the goals pursued by the investor. To divide into groups, it is reasonable to evaluate the object of investment, form of ownership, profitability. They take into account where the money came from, how big the risks and liquidity of the project are. The terms, investment objectives, features of accounting operations are subject to analysis.
Object - the basis of the division into groups
At the same time, special attention is focused on the asset, which the investor receives at his disposal in exchange for invested funds. The classification of investment objects begins with the category of real forms, that is, those when, in exchange for money, the investor receives land, production resources, real estate, machine tools, brands and symbols, signs. This also includes investing in improving the qualifications of staff.
In addition, investment can be financial when a market participant acquires a variety of securities or enters into a money exchange program as a lender for a legal entity, an individual. This category includes leasing.
Considering the classification of forms and types of investments, attention should be paid to speculative projects, that is, involving the investment of money for a short time in order to obtain real profit. Most often, precious metals and state currency act as the investment direction. The investor aims to obtain the highest possible profit in the shortest possible time.
Alternative approach
Classification of forms and types of investments involves the allocation of a separate group of investments directed to physical assets. Such programs aim to raise the level of the enterprise, ensure the development of the company, for which new production capacities and resources are acquired. The second option for prospective investment is in an intangible base, that is, intellectual property. Recently, the practice of acquiring logos, licenses, permits and other similar objects of law has become widespread. Finally, object classification offers a separate category to allocate investment in science, innovation, the development of new technologies.
Analyzing the nature of investments, their classification, types, it is important to mention gross, net investment. Net involves the allocation of free money to the acquisition of an enterprise, a company, and gross is both the purchase of a company and reinvestment. Using this strategy of making a profit, the investor first acquires a legal entity, after which he receives some profit in the process of its functioning, and then reinvests, providing the enterprise with development.
What does a depositor need?
Another classification of investment projects and types of investments is based on an analysis of the goals pursued by the investor. The easiest option is direct investment in an enterprise that already exists. You can purchase raw materials, equipment, real estate. Such an investment always aims at the development of the company.
Another common approach is portfolio investment, when a person who is interested in increasing his funds starts working on the currency exchange, converting available money into securities. During the process, an investment portfolio is formed, which can become both a source of profit and loss - it all depends on the correctness of its creation. This method has recently become more and more popular, it is considered promising and affordable for the masses, since you can enter the exchange market with relatively modest financial reserves.
Other features
Analyzing the nature and classification of investments, it is necessary to pay attention to non-financial investments. This term refers to operations in which the investor acquires intellectual property or such objects that are copyrighted. A promising investment is, for example, the acquisition of a well-known, recognizable brand. You can invest in a patent - often such investments are especially profitable in the expectation of the continued operation of the enterprise, where it is planned to sell them in production.
Another type of investment is intellectual. Its essence is the direction of free money in research, research activity, the creation of innovation. This is risky, since most of the projects do not give real commercial profit. However, the success of at least one project usually pays for all the failures. Most often, such a method of investing is chosen by persons with impressive financial reserves and support from government agencies.
Who is the owner
Considering the types, classification of investments, investment activities, it is reasonable to pay special attention to aspects of the form of membership. To divide into groups, they analyze property rights, that is, find out who owns the money invested in the project, who finances the investor. The simplest option is private investment, when money comes from a legal entity or an individual engaged in investment. Do not lose sight of government investment, when funds are allocated from the budget of a region or a state to implement a project. The consent to such an operation, as well as the control over its execution, is undertaken by specialized structures - ministries, central banks with the appropriate capabilities and powers.
There are foreign investments in this classification: such deposits, the source of which is the owner of the funds, but he is a citizen of a different power, different from the one to which the person wishes to direct his resources.
Finally, there are mixed forms when there are signs simultaneously of two or more of the described categories.
Where did the money come from
When assessing types, classification of investments, investment activity, it is important to remember the division into groups based on the origin of the invested resources. The easiest option is a primary investment, when the initial investment. A person has a certain amount or received it under a credit program, after which he selects the optimal object, project and invests everything in it. A somewhat more complicated option is re-investment, i.e. reinvestment. In this case, there is initial investment, which has become a source of some income, then again invested in the development of the project.
The economic classification of investments includes the concept of ādisinvestmentā. In this case, the interested person either partially or fully removes the funds allocated to it from the project earlier. Most often, this step is explained by the failure of the direction selected for financial amounts. Observing the development of the project, analyzing its present and future, the investor reasonably concludes that there are no prospects here, against which he makes a decision on the withdrawal of funds.
Another reason for the withdrawal of capital is the emergence of an alternative project, more interesting and profitable. If the investor does not have free funds to participate in the new program, he may demand the return of his money from the previous program, thereby gaining the opportunity to participate in the new program.
Reliability and Risks
One of the parameters evaluated in classifying the types of investments is their level of reliability and the riskiness of the planned event. Of course, the most peaceful option is the complete or almost complete absence of dangers, but in practice this does not occur, it is only modeled, created artificially. In our country, the most typical risk-free investment method is to invest in a banking structure. If you choose a financial company participating in the insurance program, the amount up to 1,400,000 rubles is reimbursed to the investor even if the system burns out. But the benefits are highly controversial.
When classifying types of investments, their risk level can be estimated as slightly less than the average steady-state value in the market. In this case, they talk about a conservative investment of money. Moderate projects are the risk corresponding to the average market indicators, and aggressive ones are those for which the parameter is higher than the standard one. For some investors, the most attractive projects are aggressive, when the riskiness is above average, but also the greatest profit.
Will bring benefits
Another aspect in the classification of types of investments is their liquidity. By this value, you can evaluate the program as a high level, medium, low, as well as a complete lack of liquidity. It is better to give preference to such projects for which the indicator is high, since at any time the investor can exit by selling assets at a price higher than what was paid to them at the time.
Another approach to classifying types of investments is their duration. Allocate projects whose implementation lasts less than a year. They are classified as short-term. Medium - lasting more than a year, but less than three years. The last type of this classification of investments is long-term, that is, projects designed for a three-year implementation period and a long duration.
Accounting and location
Assessing the options for accounting operations, all investment projects are divided into net and gross. The terms are related. Gross - this is an investment for a certain strictly defined time period. Net are gross, from which depreciation is deducted.
Another classification method is separation based on signs of territorial affiliation. To form groups, you must first choose which country or region to consider base. For example, you can take our country as such a starting point. Then the investment taking place within Russia is internal, and everything that is directed beyond its borders is external.
Responsibility and Profit
Investing is a process that attracts the attention of not only professionals in this field, but also beginners, as well as individuals who have a certain amount, but do not want to delve into the intricacies of the market. These can use the services of professional intermediaries who are ready for some remuneration to take on management tasks. It is this practice that has been especially widespread recently. A typical example is the transfer of financial reserves to a trader for the conclusion of exchange transactions. Based on the chosen work strategy, the investor becomes the owner of active or passive investments. In the first case, he decides where and how the funds will be used, in the second - he gives control over them to a third party who takes responsibility under the agreement.
Another option for classifying investments is by asset type. You can invest in tangible and intangible aspects. At the same time, the investorās choice in favor of forming a portfolio of securities or investing in a real project is the basis for classifying investments by type of asset.
Investor interest
If the average person wants to participate in the investment program, but does not have a thematic education or specific information that allows you to confidently choose the best course of work in the market, it is reasonable to seek help from an intermediary. There are several types, each has its own positive and negative sides. Wanting to achieve passive income, some join a mutual fund, make a deposit in a bank, direct money to trust, or participate in a private pension program. You can invest available funds in real estate, become a member of the currency and stock exchanges, as well as consider the possibilities of venture, hoarding investment.
Mutual fund
Perhaps this is perhaps the easiest method of participation in the investment program. Everyone wants to acquire a share, share in the portfolio created by professionals in this business. On the website of a particular fund you can find out from which securities of which companies the organizationās portfolio is formed. At the end of the reporting period specified in the agreement, all participants receive their shares. Their value depends on the size of the acquired share and the income received by the fund. As a rule, calculations are made based on the results of the year. Managers with special education are responsible for the selection of securities for portfolio formation. A shareholder only invests money, but bears no responsibility, cannot correct decisions made by managers.
As a rule, a mutual fund in its portfolio has securities of various promising enterprises, and reliable funds have several portfolios at once. Each of them has its own profitability indicator. This strategy avoids āstoring all eggs in one basketā, which means that the risks for each individual fund participant are minimal.
Who else to trust money
One of the safe options is a deposit in the bank, but you canāt count on high profitability here. In our country, just such an approach is now the most common, as it provides guarantees for the full return of the invested. But do not forget about inflation, significantly exceeding the interest on deposits, even the most profitable. This means that making a profit when participating in a deposit program is practically impossible, the real benefit is that the citizenās savings will not depreciate as much as when they are stored āunder the mattressā.
Another option is the transfer of funds to trust. This method is somewhat similar to mutual funds, but the yield is strictly personified. The investor transfers the money to the selected specialist who deals with operations on the stock and currency exchanges, thereby providing his client with income (or loss). It is very important to be able to choose a professional who works honestly and is interested in maximum profitability for the client. Otherwise, the risk of losing money is high. As a rule, no compensation is provided for, therefore, the selection of a manager is a difficult task involving risks.
Where to invest?
Among other types of investments, a good option is cooperation with a non-state pension fund. Here you canāt count on big profits, but for the average person who does not have large sums, this method allows you to provide at least some financial plus in the long run. Specialized firms offer all those interested to transfer to them for management a certain amount, from which a pension will be formed in the future. The assets that the client already has today, under the management of the enterprise, are gradually increasing, and the payment of this money will be carried out according to the agreement. Among the positive aspects is the possibility of transferring the accumulated inheritance.