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Investor Wiki

 

In an effort to provide you with all of the opportunities of the modern financial markets and provide the most complete information support, Bolmax Management presents you the quintessence of knowledge about the effective investment of money in the form of Wikipedia.

 

Bolmax Management Investor Wiki is: 

 

  • Everything you wanted to know about the investment in a succinct, simple and clear form
  • Lots of facts and practically useful data, a minimum of dry theory and cumbersome wordings
  • A complete list of financial terms with definitions and examples

Learn the main article about the investment and then go on the links that are the most interesting for you for more information about the economy, investment and the financial markets terminology.

 

Investment

Investment is the process of investing in assets, the value of which, presumably, will grow, allowing the investor to receive income. It is expected that future income will exceed the cost of acquisition of these assets.

Investment is an essential condition for  functioning of the economy as funds transferred to savings, are withdrawn from economic circulation – roughly speaking, put in an envelope, while when investing, the funds are involved in trafficking, providing both income for investors and growth of the economy as a whole.

 

Yield and risks of investment

All investments can be characterized by two main indicators – risk and yield. This ratio helps to evaluate the effectiveness of investment activities.

In classical economic theory, the higher the investment yield, the higher the risk – i.e. the risk of loss of income or loss of the invested capital. However, the main goal of investors is to make the highest possible profits at low risk.

Risk minimization is achieved by various methods, the most common of which are the objects of investment diversification (portfolio) and the rules of money management.

 

Differences between investment and other economic activities

In contrast to lending with the clear terms of refund and interest, the investment income is received only in case of the overall profitability of the project. The company lending is impossible or difficult for the majority of private investors, while the investment in business’s shares is affordable for private investors even with small capital.

It is difficult to identify a clear distinction between the investment and speculation. Essentially, the objectives, the nature of the contracts concluded and other important features of investment and speculation in the financial markets are similar. The time factor is often described as a distinctive feature, but formally speculative operations can be long-term and investment takes a minimum of time. Another difference is that speculation suggests receiving income in the form of the difference between the funds invested in the purchase of the asset and the proceeds from its sale, and investment can generate income during the ownership of the asset, for example, in form of dividends on securities. However, in today’s financial markets, speculators are called persons conducting independent operations on purchase and sale of financial assets with a view to make a profit, and investors – people who use a variety of instruments without the direct market access.

 

Investment opportunities for private investors

Individuals and companies with a relatively small capital, however, can use quite a wide range of investment instruments such as:

  • Investments in bank deposits
  • Opening of unallocated bullion accounts
  • Investing in real estate, jewelry, art objects (real investment)
  • Direct investments in start up projects and small businesses
  • Transfer of funds to individual asset management
  • Investment in an investment fund, including an open-ended fund

Each of them possesses its own advantages and disadvantages, different ratio of risk and yield, so before you make an informed decision to invest, you need to carefully examine the basic features of modern financial instruments and investment instruments.

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