What are the main investment assets? In short, these are cash or financial assets, tangible property, raw materials, materials, or intellectual property that belong to a particular person. But this is clearly not enough.
Introductory information
Perhaps everyone who reads this article knows that investments are investments aimed at increasing capital or obtaining a certain benefit. Based on this formulation, it is not difficult to reach the logical conclusion that an asset is an object into which material goods are directed. This is done in order to achieve the goals set by the investor. The main property of an asset is its ability to ensure the fulfillment of tasks. So, if initially the goal is to get the highest possible income, then it is necessary to ensure that it has high profitability. If the task is to obtain a certain social effect, then investments should provide it. There are many approaches to ensure a successful investment. For example, you can act independently by studying and analyzing information. Or, as an option, invest in the assets of an investment fund so that professionals are already thinking about where to invest. That is, there is always a certain set of options. From them follows the preferred activity.
So what are the main investment assets?
There are several classification approaches. The most popular is the following:
1. Money. These include real estate, equipment, inventories, raw materials, materials, jewelry.
2. Financial assets. These are cash, bank deposits, bills, bonds, stocks.
3. Intellectual assets. They mean copyrights, licenses, patents and more. An investor can provide a basis for developing a specific technology, writing a song, a book, creating a unique product. After which, thanks to the consolidation of ownership, it is possible to receive passive income for life.
4. Business assets. Investing in them is characterized by high profitability and significant risks. The most common option is a franchise, that is, the use of a proven strategy and work under the name of a well-known name (brand), which is often accompanied by partner support. But building a business from scratch is also possible. In this case, the associated risks, prospects should be assessed and decisions should be made based on the data obtained.
Why are investments necessary?
There are a lot of options for possible goals: generating income, preserving capital, advertising, PR and much more. For each of them there is a range of acceptable tools. Some of them are effective for generating income, while others are suitable for preserving capital. Moreover, the more literate the population is economically and financially, the higher the standard of living in the country, as well as the more potential assets that can be used for investment. For those who do not want to spend time studying the nuances and constantly monitoring the market, it is possible to use the services of special organizations - mutual investment funds. There are others, but these are the most popular and at the same time considered the first step for investment. Asset management of mutual investment funds is carried out by professionals who, as a rule, receive a certain percentage of income.
How to choose, in favor of what to make a choice?
Assessment will help in this difficult task. It is necessary in order to select exactly the asset that meets all the requirements of the investor. It should be noted that the assessment procedure can give only a quantitative picture of the situation. Therefore, it should not be limited to it. So, if the potential profit is impressive, and the value of the asset is high, then this is not at all a guarantee of the success of investments. For example, society may additionally negatively relate to it. A similar thing is observed at the start of industries that poison the environment.
Valuing an asset
How to do it? In short, the valuation of investment assets should be carried out according to the following principles:
1. Critical approach to the collection and analysis of information that will be used.
2. Carefully compare the results of the assessment with the statistical data of enterprises operating in the market.
3. To get the correct numbers, use several mathematical estimation methods.
All this will not allow you to nullify the risk, but significantly reduce it - this is quite possible. Among the methods you can advise to pay attention to:
- assessment of conditional requirements;
- discounted cash flows;
- comparative.
A little about the specifics of different assets
Each species has its own characteristics, due to which their reaction to various external and internal factors, information and news background, political statements and the like are different. Therefore, the concept of diversification of the investment portfolio was invented. In other words, it is necessary to have a variety of assets in order to reduce risks and minimize losses. In this case, if something went wrong somewhere, then the possible losses will always be able to compensate for other investments.
From this position, the so-called distressed assets are especially relevant. They arise from business owners, securities, material forms of ownership due to financial difficulties or even bankruptcy. Distressed investment assets are of interest if only because they sell them at a low price. But working with them is better for experienced professionals who are knowledgeable about the market situation. Indeed, it is highly probable that they will not receive profit, but only one loss (partial or full).
A little more about classification
Attentive readers may have noticed that the investment assets discussed earlier are divided on too general principles. To understand what is being discussed, this approach will come down. But for an in-depth study of the situation - no. Therefore, other approaches are used. For example, grouping assets into categories (also known as classes). Here, stocks, bonds, raw materials and currency are highlighted. Each asset class reacts differently to incoming economic news. They can also be classified based on specific features. For example, on a sectoral basis (energy companies, agricultural enterprises, and so on). If you buy stocks in the financial markets, then they are considered as direct investments. Whereas bonds are fixed income investments. At the same time, real estate can be distinguished as a representative of an interesting situation. Why? The fact is that they are both a type of tangible assets and a category for investment. And so it can go on for a very long time.
Work with various attachments
If uncorrelated assets are combined in one portfolio, then risk exposure in different markets is diversified. This is due to the fact that the dynamics of their prices are rarely synchronous. For example, if the value of stocks decreases, then the cost of raw materials does not always repeat this dynamics. Moreover, different classes do not even react to the same news: some may grow, others may fall. It should be noted that in conditions of economic downturns, problematic assets often arise. Their value falls even in the absence of a correlation between them. But at the same time, if there is no long experience, you should start small. In this case, there are two approaches that should be paid attention in the first place: individual and collective professional. Let's look at each of them.
Individual investment
In this case, you have to act independently, taking all responsibility, losses and income. In the Russian Federation, for citizens who want to master this area, a preferential tool is called the “individual investment account”. In the case of him, for example, tax breaks are provided. This is done in order to interest more citizens. For example, direct benefit in the most optimal case can reach several hundred thousand rubles - you must agree, this is very good. The most popular reason for such investments is to increase savings. This is achieved in two ways - by increasing the value of the property or paying interest on investment assets. If we talk about abroad, then earnings on the price of stocks, bonds and other securities are very common there. While interest is seen more as a pleasant addition. Such accounting of investment assets is due to greater instability, therefore these two factors are more or less equal.
Collective and professional investment
Here, the best example is the activity of a mutual investment fund (Mutual Investment Fund ). What is its essence? There is a group of people who want to increase their capital. But there is no desire to manage it. In this case, they create an association (without registering a legal entity), deposit funds and transfer them to trust management for professionals. They acquire the assets of an investment fund. After a certain time period (usually a quarter), the results of operations are summarized, and all income (loss) is divided between the participants in proportion to their contributions. Investment management of assets of this type has its risks (fraud, an incompetent specialist), but with proper care and careful selection, it is suitable for beginners.
What do portfolios consist of?
When this issue is resolved, the chosen strategy has a great influence: safe, moderate, risky. Asset management of investment funds in the first case consists in investing in even not highly profitable, but reliable instruments. Usually - allowing to block inflation and bringing a few percent profit per year. Moreover, the probability of loss is minimal. Whereas a risky strategy involves investing in dangerous assets that could potentially bring big profits in the future. Most of them are unsuccessful placements of funds. But with a competent and successful approach, it is possible to find a project that allows you to ensure hundreds and thousands of percent of profit. This is a desired goal for any investment company. An asset of this quality can significantly improve the financial situation and get a significant gain. But all this is accompanied by significant risk.
Conclusion
So it was examined what the main investment assets are, what specific divisions exist, how certain goals are achieved, individual moments of individual and collective activity and interaction. This is quite enough to get a general idea of the subject of the article.