The concept of investment refers to economic terms. Investments inherently represent various investments that can bring profit in the near future. Making a profit is the main purpose of investment.
In practice, the concept of investment has some distinctive features. Financial investment is a set of cash costs for various types of financial assets (such as stocks, government securities, etc.).
Material investments (aka investments) are, first of all, investments in real estate or other property (buildings, structures, inventories or building materials).
Intangible investments are also financial investments in various studies, in advertising activities or in staff training.
The concept and types of investments depend on their purpose of use in real practice. The effectiveness of such investments largely depends on their structure. The structural component of investments varies depending on their type, on the area of use and their percentage in the total investment portfolio.
Based on the structural component, the concept and types of investments can be further divided into direct real investments and portfolio investments . What is their difference?
The concept of real investments already implies the direct personal participation of the investor in the work of investment investments. For example, this is a cash investment in the authorized capital of at least 10% or the purchase of shares of an economic entity. Portfolio investments have a slightly different purpose and structural content. The concept of portfolio- type investments involves the purchase of a whole portfolio of valuable assets in order to increase their own income from profits from them in the future, but at the same time does not oblige the investor to actively manage and control their movement.
The modern development of the national economic complex as a whole has greatly expanded the concept of investment and their types . These are agricultural investments, and production, and infrastructure, and demographic investments in the human factor. The penetration of investments in various fields of activity significantly accelerates economic growth in public life. This is directly related to fundamental changes in production, with the possibility of introducing nanotechnologies, the latest techniques in various areas of economic activity through investment.
Increasing the growth of land allotments, using a new raw material base, updating technical skills and introducing environmentally friendly technologies - all this became possible in connection with the use of investments. For any economy, cash investment is a real mechanism for its growth and development. Investments are also divided into long-term and short-term, convertible and speculative. According to the degree of risk, they can be divided into high-risk and low-risk, by the terms of use - into unlimited, medium-term, long-term.
Investments at all levels play a crucial role in the development of production by updating and modernizing production processes, improving the quality of products and their competitive ability. Investments are also used to carry out environmental conservation measures, which also contributes not only to the development of companies and their normal functioning, to profit, but also significantly affects the restoration and development of the environment. This, of course, is of no small importance in the life of each individual person. After all, the flora and fauna of our planet over the many years of development of civilization has changed significantly, their development and existence is under threat. Therefore, environmental investment is no less important for any state.