Financial investments and their features

The productive activity of organizations that are not investors has a functional focus, which defines it as a priority form of real investment. The choice of this option is directly related to the need for effective use of the relevant resources that are being formed for selected projects.

Financial investments are performed business activities for the acquisition of securities, corporate rights or other monetary instruments. Investing in them free funds can provide for various purposes. The main ones are the following: the transformation of savings into highly liquid property documents, the receipt of a possible future income, as well as control over the issuing institution. In addition, financial investments are a form of application of the free capital of the organization. It has some features:

- allows you to make external investments both on the territory of the country and outside it;

- enables the enterprise to implement strategic development goals, while saving its own funds;

- requires a minimum amount of time to take the necessary management actions (compared to actual projects);

- is committed in the late stages of the development of the organization, after its needs are met;

- financial investments - an independent type of economic activity;

- allows investing in speculative instruments without risk and pursuing the policy as a serious conservative investor;

- requires the promptness of making various decisions in the process of financial transactions.

To solve the problems of evaluation, formation and implementation of the sponsorship policy, it is necessary to take into account the classification characteristics of the deposits. Forms of financial investment are divided into two main groups.

By type of ownership :

- state financial investments are investments that are carried out by the authorities and management at the expense of borrowed funds and extra-budgetary funds, as well as enterprises at the expense of their own capital;

- private deposits are made by non-state organizations, citizens, societies and unions, economic associations and other legal entities acting on the basis of collective property;

- Foreign financial investments are carried out by legal entities of other countries and other states;

- The total investment refers to citizens of a country whose residents they are or are not.

By the ways of participation in the investment process:

- direct investments are operations of economic activities that provide for the investment of capital in the statutory fund of a legal entity (the funds are exchanged for corporate rights);

- Portfolio investments involve the purchase of securities and other financial assets in the stock markets.