Types of investments in our life
The term «investment» is broad enough to be defined singly and concisely. In different sections of economic science and different fields of practical activity, its content has its distinctive features. In financial theory, investment is understood as the acquisition of real or financial assets. The current costs of which are aimed at generating future returns. Investors themselves realize that by investing today, they will be able to make a significant profit tomorrow.
Representatives of companies try to use all kinds of investments because with their help they get additional channels of financing. If you enumerate the main types of investment, it is necessary to indicate that they can be real and financial, speculative. In the first case, the investor invests in the company, intending to make its activities efficient and profitable. In the second case, the investor makes a profit by any other means, including trading on the stock exchange.
All investments are classified according to the term of deposits. Short-term investments are returned over a short period, but the returns are small. All long-term types of investments guarantee impressive returns, but the money is invested for several years. Sometimes contributions are regular. They are earmarked. The tranches are targeted and used for specific purposes. Investment is carried out in different ways, but most often money is invested in the purchase of securities of prospective companies.
Financial investments do not assume profit from dividends on shares but their subsequent resale.
An exchange is a specially created place where borrowers, the state or enterprises in need of money, and investors, owners of free assets, meet each other and conclude transactions. First, money can be lent. This situation is represented by the bond market — debt securities. In this case, the investor’s income may consist of fixed coupon payments, most often once or twice a year, or in the form of the difference between the purchase and repayment price — discount bonds. In addition to providing a loan, the investor has the opportunity to enter into a share with other owners of the enterprise.
Unfortunately or fortunately, this type of security is not issued by states because ideally it is not sold. But companies that attract investors in the share, offer to buy their shares. This type of investment on the stock exchange is considered the main and most frequent. Investments on the stock exchange include the purchase and sale of real assets, and goods if they are purchased not for their direct use, but solely to benefit from the trade process itself.