Investment concepts and types of investment methods
As defined by economists in all fields, investment is defined as capital expenditure on new projects in the utilities and infrastructure sectors such as main and secondary road projects, water supply projects, urban planning preparations, housing projects, electrical installations and energy. In addition to projects on economic activity for the production of goods and services in the production and service sectors, as well as projects on social development in the fields of education and health and communication, agriculture, housing and tourism… In this article, we learn everything about investment.
Let’s take a look at the definition and types of investment, the importance of investment:
Increasing production resulting in an increase in national income and an increase in average per capita income, thereby improving the standard of living and increasing the welfare of all members of the state.
To provide a wide range of services to various parts of the country.
Increasing capital capacities in various fields.
Producing large quantities of goods and services that contribute to the development of investment and exporting them abroad.
To provide different opportunities and work areas that will contribute to the development of society to different individuals and groups.
Financial investment is defined as the investment in financial assets and gives the right to claim on the same assets, and many investors have turned to it as a result of the multiplicity of branches, areas and features that distinguish it from other investment types. and the motivation behind financial investment comes from the need to:
Ensuring economic expansion and development through the purchase of equity shares or bonds and others.
Having sufficient awareness of the person or sector about the importance of investing in certain areas.
Existence of a financial surplus from savings that the owner wants to increase and make a sustainable profit.
human investment
Many consider investment in human capital one of the most important investments and one of the most beneficial in the long run and one of the most important in achieving strategies. It is made by providing tools and methods for the development of people and their abilities, which then contributes. To achieve the goals and strategies drawn and to develop the implementation methods as necessary We list some reasons for investing in people in order for this process to be sustainable:
At the international and global level, countries seek to achieve the highest human investment to be employed in the development of various health, education or operational sectors and many other sectors.
The diversity of projects and new investment opportunities that individuals can have, increasing their income and improving their lives.
long term investment
As we mentioned earlier in the definition of investment, it is the expenditure on a particular project to make a profit. These projects may depend on long periods to generate profits and return on investment. Long-term investments are also considered safe investments. Since it takes a long time, it starts with the investment purchasing process and ends with the profit making process. Investing takes experience and work, as it is possible to rely on a set of rules to help you make a decision, including:
Avoiding rumors and relying on research and analysis.
As a long-term investor, study the market according to the type of investment you want and the feasibility study, as you will need to mitigate risks as much as possible and you will need high liquidity to achieve your goals.
Avoid short-term profit-making risks, as these risks can affect your future plans and projects, even your investment itself. If you prefer to make a profit in the short-term, you should be a short-term investor and that is it. we’ll talk about it later.
short term investment
Known as short-term investments or temporary investments, as they are well-known investments in terms of direction and financial return, usually held in the form of bonds or securities that can be quickly converted into liquidity by companies when needed, aiming to make a profit in a short period of time with high risk. differs from long-term investments, which can be opaque or changeable at times.
Some turn to investment companies with mutual funds in which the investment company collects all these funds in a single fund to invest in the future and make a profit, while others may see it as a safe way for short-term investments.
public investment
Public investment is made through a company or group of companies that invest heavily in a particular area or sector or several sectors at the same time to achieve the highest financial return, and these companies are dependent on government facilities.
private investment
The purpose of obtaining a financial return and profit from the investment by a person or group of people owned by a private company or invested on their own
