Investment companies- this is a new form of credit and financial institutions, which received its greatest development in the post-war years, although it existed in the pre-war period. The priority in their development belongs to the United States.
Investment companies raise funds by issuing their own shares, which are then invested in securities of industrial and other corporations. Thus, through the acquisition of securities, they finance various sectors of the economy on an equal basis with other financial institutions.
Currently, there are investment companies of closed and open types.
Investment companies closed type issue shares in a certain quantity at once. A new buyer can only purchase them from previous holders at the market price. Investment companies open pit, which are called mutual funds, release their shares gradually, in certain portions, mainly for new buyers. These shares may be transferred or resold. A more convenient organizational form is open-ended companies, since constant emissions allow them to constantly increase their monetary capital and thus constantly increase investments in corporate securities. In general, the organizational form of investment companies of open and closed types is based on the joint-stock form.
A peculiarity of investment companies is that among the buyers of their securities the share of financial institutions and commercial and industrial corporations is increasing. Each investor in an investment fund is required to pay commissions when purchasing, holding shares and managing the deposit. The size of the commission varies and depends on the financial power and reputation of the company. It should be noted that in the post-war period, open-type companies (mutual funds) developed at the fastest pace in developed capitalist countries.
The development of investment companies is closely related to the dynamics and scale of the securities market. The higher the level of development of the latter, the higher the degree of development of investment companies. Such companies operate most successfully in the USA, Canada, England, Germany and Japan.
The basis of passive operations of investment companies are the proceeds from the sale of their own securities, share capital, reserve fund, and real estate of the company.
Active operations of investment companies are specific and differ from similar operations of other financial institutions. Investment companies of both types invest the bulk of the funds raised from the sale of their own shares in shares of various corporations and companies: 80% of the assets of investment companies are shares, and in recent years, in addition, they have been investing in corporate bonds. There is a specialization of investments: some companies concentrate their investments in ordinary shares, others in preferred shares, and still others in bonds. In addition, there is industry specialization when companies acquire securities, for example, only railway companies or engineering companies. automobile, electronic corporations.
Since the development of investment companies depends on the state of the securities market, mainly shares, frequent fluctuations in stock prices are reflected in the financial condition of investment companies. Falling stock prices and especially stock market crashes slow down the development of the latter, and in some cases lead to their bankruptcy. This was also observed in the USA in the mid-70s and early 80s of the 20th century.
Investment companies attract wide sections of the population to investment activities, i.e. small investor, thanks to which it is possible, firstly, to mobilize significant funds for investment in the economy, and secondly, to create a certain illusion that everyone can become an owner of shares and, therefore, an owner. For this purpose, papers are sold at low prices and are accessible to the middle class. In the USA, for example, stock prices in the post-war years ranged from 2 to 30 dollars. Typically, small investors are attracted during a stock market boom, when stock prices are rising. In crisis situations, they usually suffer heavy losses. The practice of Western countries shows that the main investors are large individual and collective investors, and control over the activities of investment companies is exercised by the largest shareholders.
In the 1970s, new open-ended investment companies emerged that were called "money market mutual funds" ( MoneyMarketMutualFunds). This type of investment company develops mainly in the USA and Canada. Their name stems from the fact that these companies operate in the securities market mainly with short-term securities.
Like other open-ended investment funds, they also issue shares, but very cheap ones - at a price of $1 per share. At the same time, the cost of one share does not change as a result of fluctuations in loan interest, and therefore the shares have fixed prices. This led to a wide influx of clients into such funds, providing them with fairly large savings. For example, the assets of money market funds in the United States since July 1970 increased to $200 billion in 1982, and in the early 1990s amounted to $300 billion.
The formation of passive operations of these companies is carried out mainly through the issue of cheap shares. They invest money in short-term securities: short-term federal bonds (short-term bills), municipal bonds, commercial paper of private corporations, as well as in financial instruments (bills accepted by banks, certificates of deposit of commercial banks). Some funds of this type specialize in federal government securities only.
Funds in the United States have a number of benefits compared to other investment funds: they are exempt from the requirement to maintain required reserves at the central bank (the Federal Reserve) and do not pay taxes on municipal bonds. In addition, one more circumstance should be noted: for a long time, the interest rate on their shares was higher than on deposits of commercial banks, amounting to 5.25%, and deposits in savings and loan associations, reaching 5.5%. The lower interest rate in these financial institutions is due to the rules of the Federal Reserve System. This led in the late 1970s to widespread outflows of money into money market mutual funds from banks and savings and loan associations, which significantly deteriorated their liquidity. Therefore, since 1982, interest rates were deregulated in the United States and money market deposit accounts were introduced ( MoneyMarketDepositAccount), which allowed for the regulation of cash flows between commercial banks, savings and loan associations, and money market mutual funds. As a result, funds in deposit accounts increased and money began to flow out of money market funds, which significantly reduced the size of their assets.
By the late 1980s and early 1990s, competition for funds between banks and funds entered a more robust phase, with the former taking advantage of federal deposit insurance and the latter taking advantage of freedom from Fed reserve requirements. At the same time, money market mutual funds began to conduct and expand speculative operations. Thus, they began to be used as companies to hold interest payments and dividends pending reinvestment. In addition, many private individuals who managed their own assets had the right to open their own share accounts (share accounts). This allowed shareholders to quickly and freely transfer funds from money market mutual fund accounts, depending on market conditions, to the accounts of investment funds that invest in long-term securities.
How to choose an investment company? At the moment, many investors who are new to this business are asking this question.
Investments in capital are considered a real way to regularly generate profits. In such a situation, the investor is looking for an investment but reputable company.
Below, the article discusses in detail the main nuances that you need to pay attention to when choosing an investment organization.
Selecting a suitable investment company - procedure
When choosing a suitable investment organization, the investor performs the following actions:
- analyzes a website about an investment company;
- chooses an organization that has a high rating and has been successfully operating for several years;
- analyzes the type of return security that the company provides;
- analyzes the number of clients of the company;
- studies ways to withdraw and enter investments;
- analyzes the organization's registration documents;
- determines the size of its own future profit;
- studies the rating of the best and most reliable investment institutions in the Russian Federation;
- reads reviews of similar companies.
After completing the above steps, the investor selects the most suitable and reliable investment firm.
Investment firm - its main functions
An investment company is a financial institution that collectively invests capital from investors in various stocks and other securities.
Such a company performs 2 main functions:
- diversifies deposits;
- manages the investment portfolio.
When investing, such organizations use the capital of the founders.
Such companies are legal entities. They place their shares on the market to make a profit and subsequently make additional investments.
At the moment, investment organizations in the Russian Federation are in great demand among investors. Such organizations have a license to conduct brokerage or dealer activities.
Such firms not only accept investments, but also provide loans to their clients. Such investment organizations are investment banks.
There are 2 types of investment organizations:
- closed type. When investing money in shares, the capital of the company's founders is used. Such capital has a fixed, specific structure;
- open. Such organizations regularly increase their budget when issuing new shares.
How investment companies work
Investment organizations are developing very well in the United States. With trust management of his enterprise, the investor transfers his money to professional traders. Such firms, in turn, speed up the investor’s entry into the financial markets.
Investors sometimes do not have enough money to correctly determine their risks and distribute money on various stocks.
As a result, when purchasing shares of an investment organization, the investor ensures a constant income.
At the moment, investment companies are reinvesting funds in various directions. As a result, if some shares fall in price, others, on the contrary, increase, and the investment firm retains its capital.
How to choose the right investment firm
The safety of money depends, first of all, on the reliability of the investment firm to which the investor wants to entrust it. At the moment there are many different financial pyramids that consider themselves investment companies.
Thus, each investor must follow a certain algorithm of actions when choosing a reliable partner.
Studying an investment firm's website
Today, almost every company, regardless of what it does, starts its own website on the Internet.
More often than not, it is through information from the website that an investor first becomes acquainted with a company. In such a situation, the online user evaluates the level of the investment institution based on the Internet page.
First, the investor checks how long has the website been running. In such a situation, he uses various free online services.
Next, network user analyzes website design, navigation, information about the organization, etc.. If an investment organization has specific awards, it is often written about in the media.
Reputable companies are a priority
Until recently, the stock market in the Russian Federation practically did not work at all. In the USSR there were no financial exchanges at all, because almost all organizations belonged to the state.
As a result, investment firms first opened in the Russian Federation only in 1992. If such a company does not publish its opening date on the website, then most likely this company or newbie or scammer.
As a rule, it is specialists from the investment company’s technical support service who inform the online user about the start of the company’s work on the market when a corresponding request is received.
The history and reputation of an investment organization are the 2 main factors by which the reliability of such an institution can be assessed.
Determining the security category of financial returns
Any investment is in any case associated with risk. Sometimes even a bank goes bankrupt and does not return the deposited funds in full, although in fact such investments are the safest.
Investment institutions deal with a variety of stocks. Shares are the most highly liquid financial instruments, however, it is not always possible to correctly determine in which direction the price of an asset will go.
When investing capital in an experienced investment company, the investor partially reduces the risks, but does not completely eliminate the possibility of draining the investment.
For investments in securities there are 2 types of financial return security:
- fixed – the amount of profit is set in advance;
- variable – associated with activity in the financial market.
Fixed profit equal to 6–8%. This is slightly more than the income from the bank's foreign currency deposits.
Variable income, as a rule, is higher, but has increased risks.
Number of company clients
By the number of clients of an investment firm, the investor determines how much such an organization is trusted. The more Russian citizens and organizations turn to an investment company, the better. This has a positive impact on the amount of capital managed by investors.
The investor also studies the company’s partners. In such a situation, the trader looks to see if there are famous European brands among them (in particular, well-known banks in Switzerland or England).
Input and output methods
Well-known investment companies offer investors flexible and comfortable conditions. Such institutions provide the investor with many methods for withdrawing and depositing money, and at the same time attract a large number of investors.
Thus, the investor uses the following methods for entering and withdrawing his investments:
- electronic means of payment (WebMoney, Yandex Money, QIWI, etc.);
- transfers through a bank;
- use of credit cards;
- transfers by mail, etc.
If the website of an investment institution lists only 1 of the above-mentioned withdrawal and deposit methods (in particular, Bitcoin), then such a company is often a financial pyramid.
Studying company registration documents
In the Russian Federation, investment organizations operate only under a license.
The presence of company registration documents on the website indicates the open and non-fraudulent activities of such an institution.
The investor checks the authenticity of the company's documents on the official websites of government agencies that issued a license to carry out investment activities.
Also, during such a check of the company, the investor goes to the website of the Tax Service of the Russian Federation. It contains specific information about all organizations.
Determining the amount of potential profit
Many investment firms attract clients with huge interest rates. But are such promises always true?
Experienced investors know that it is unrealistic to double your capital in 1 month. More often, such statistics of investors are deliberately inflated in order to increase the number of new clients in this business.
As a result, professional traders compare the performance of different companies. When choosing them, the investor studies the reputation of the organization.
If an investment organization works in good faith, then many negative reviews will not be left about it on the Internet.
Rating of investment organizations of the Russian Federation
Choosing a suitable and reputable investment company is considered a difficult task. In order not to make a mistake in choosing the right company, the investor studies the rating of the best investment institutions.
So, at the moment the following most reliable investment companies operate in the Russian Federation (2019 rating):
- LLC "Company BKS" (Novosibirsk);
- JSC "FINAM" (Moscow);
- JSC VTB Capital (Moscow), etc.
Which Russian investment companies are trustworthy? Who should you not trust with money? Only a person who clearly understands that these are investment companies can deal with this. Nowadays, terminology and general information on basic concepts are available to everyone, you just need to want to understand it. There will be no exception in investment portfolio management, the main ideas through which the process is implemented, tools and features that allow you to get benefits. With careful research into an area, profits are available to anyone willing to put in the effort.
General understanding
For many citizens of our country, the investment business seems like something incomprehensible, mysterious, promising, but dangerously reeking of deception. What are these investment companies? What do they do and how do they make their profit? It is necessary to understand that there are simultaneously scammers on the market posing as reliable companies, and organizations that are truly trustworthy. The following material is dedicated specifically to real companies offering investment services to users through specialized legal tools.
Investment companies are enterprises whose activities are fully controlled by the current legislation of our state. Profits can be made by those who have correctly selected an intermediary who is reliable and able to survive in the market even in a difficult economic situation.
How it works?
If a citizen has a certain amount of free finance, he has the right to use it wisely, to his own benefit. You can put money in the bank, but the interest will be small. You can invest in real estate if the volume allows it. Another option is investment companies. They are much more profitable than stockings and home jars, and also more convenient than most banking structures, since they promise greater profitability if the counterparty was chosen successfully.
Investment companies are firms engaged in the same sector of the economy. They are engaged in investment operations, receiving resources for this from the population. The company takes a certain remuneration for its services, the owner of the money receives a percentage of the profit from the amount, everyone leaves happy or continues productive cooperation. Investment companies are legal entities that invest funds received from individuals into assets with high returns. The main idea of entrepreneurship is to increase existing volumes by choosing promising areas for investing money. Some investment companies build a business using their own funds and client funds, while others work only on what they receive from the public. The company provides services through securities, shares, and bonds. You can partner with a private equity firm that offers access to a private equity fund.
Funds and firms
The logic of the work of investment funds and companies offering services in this area is quite similar. Both options provide the opportunity to make a decent profit if you choose a reliable partner. It must be remembered that a mutual fund is a trust management, and an investment firm is a legal entity registered in accordance with all the rules established by law. The activities of a large investment company are subject to legal norms and are constantly monitored by responsible government authorities. To open such a company, you must first obtain a license. A modern company engaged in investment activities, in order to legally conduct its activities, receives permission to act as a broker or dealer.
Classification
Investment firms are usually divided into groups:
- closed;
- open.
The former promote investment projects, but do not accept money from investors. For operations, own resources or those received from the bank under a credit program are used. The second type of firms cooperates with individuals, receiving funds from the public according to the rule of trust management.
Analytics as a basis for work
Not everyone will be a source of decent income. When money is invested in some potentially attractive program, a special firm dedicated to this issue first collects analytics on a number of aspects. Without this event, success will be too low and no one will make a profit. Reliable, large financial and investment companies necessarily have an analytical department in their structure, but small organizations have at least one specialist responsible for compiling market analytics.
An analysis of the state of the country’s economy as a whole, and individual projects in particular, is a study of market conditions and the dynamics of the value of an attractive asset. Forecasts and plans are drawn up, exchange rates and the situation in the country's politics are controlled. In short, it is necessary to keep control over all factors that can affect the price of an asset. If the analysis shows that the investment will be promising, the investment company begins to work with the project it likes. In most modern companies, a user, planning to invest money in an organization, sees which projects its analysts consider promising.
Attention to the market
Investment companies constantly “keep their finger on the pulse” because knowledge of demand is the main information tool on the basis of which it is possible to predict the dynamics of a project. Each potential investment object is checked, researched and analyzed. The collected data helps assess the feasibility of cooperation, as well as select the optimal interaction mechanism.
Brokers are market leaders
Modern Russian investment companies for the most part prefer to obtain broker status in order to legally carry out relevant transactions. This requires preliminary registration of a specialized license, which is not issued to everyone: you need to meet the conditions prescribed by law. A private individual cannot trade on the stock exchange whenever he pleases; if he is interested in such an area of activity, he directly contacts a broker, which is an investment company with a certain area of specialization. A broker is an intermediary between a private investor and the international market. Of course, the services are not free - usually it is a few percent, although most modern organizations offer fairly favorable conditions and a small commission.
Select: why is it important to choose correctly?
The success of a private investor is directly determined by how responsibly a person approached the selection of an intermediary, and how reliable an organization he chose to work together with. The success of investing is important because it determines not only the present, but also the future of money. In our country there is quite strong inflation, which does not allow one to keep one’s savings in a bank - finances depreciate faster than interest increases, and in fact, investing becomes the only possible method of preserving and increasing one’s property. This means you can’t trust just anyone.
Investments: deceived or not?
Many are convinced that all modern investment organizations are deceptions, defrauding money from honest people. The population has been taught by the bitter experience of financial pyramids, which have occurred in our economy more than once or twice. And there are now scammers pretending to be reliable investment companies. Usually they are quite simple to identify - they offer significantly more profitable services than the market average return. It is necessary to understand that no one in this world gives out money for nothing, and offers that stand out from the ordinary most likely contain a catch.
By carefully examining each option and checking the legal information on the investment proposal, an individual can protect himself from deception. It is necessary to understand that not all investment projects are fraud. Many companies strictly follow established legal standards.
How to find an intermediary?
In the financial market of specialized services there are a lot of legal entities offering the services of mutual funds or investment companies. It is not easy to choose the best option for yourself among them. Many organizations are ready to offer good profits only to clients who immediately provide very large sums of money for management, but not every citizen has the opportunity to become such an important player.
You can start searching at any time - you just need to have access to the World Wide Web. When considering offers, you need to analyze not only the tempting promises of huge interest, but also all the conditions for their provision - the invested amounts, terms, guarantees. Investment companies have their own representative offices on the Internet, even if they are small organizations, and they post all official information on the work process on the website. This allows you to choose the best option for yourself by impartially and leisurely studying the data.
Current documentation
If you cannot find the date of creation, contact details, legal address and statutory documents on the company’s website, it is strictly not recommended to trust such a company, no matter how tempting its offers. Any self-respecting organization, trying to gain the trust of a client, discloses all official data about its form of activity and the tools it uses.
For the first time, investment companies in Russia began operating in 1992. If an organization claims that it has been offering a corresponding range of services on the market for longer, they are probably scammers, swindlers; under no circumstances should you contact them. It is also important to examine all documents posted on the site for logic, consistency, and accuracy of information. If there is an assumption that this is fake documentation, then there is no need to start cooperation - it can lead to unpredictable results. If you have doubts about an organization that has numerous positive reviews on the Internet, you need to think twice about whether to contact it - the responses are not always honest and legal.
And our name is legion
The most preferable option is to work with a large company that has already managed to attract numerous private investors. The more such clients, the larger the organization’s assets, the more investment tools it can use to its benefit. But a company with a small clientele, even under good conditions, can cause loss of money - there is too great a risk that in a difficult economic environment the organization simply will not be able to survive in the chosen market sector. At the same time, you need to understand: long-established, reliable companies will never offer the same profitable options as beginners who are forced to fight with all their might for every client. It is not for nothing that it is customary to say that only those who take risks drink champagne.
The investment business is the most obvious reflection of folk wisdom.
Check reliability
Before concluding an agreement, it is worth finding out what financial instruments the investment company you like uses. It wouldn’t hurt to compare with the list of what more well-known, larger competitors practice. Another important point is the financial tools for depositing and withdrawing funds, as well as the timing of transactions.
Reading time 10 minutes
Investing is in all cases a partnership. Therefore, one of the key tasks of an entrepreneur who wants to ensure the growth of his own investments is to find a reliable investment company with which he can build cooperation in a particular area of business. In what areas of financial activity may an entrepreneur have the greatest need to enter into an agreement with an investment company? How to choose a reliable partner, taking into account the characteristics of a specific business area?
What are investment companies?
Choosing the right investment company means understanding, first of all, what such an organization is and for what purpose you need to contact it.
The term “investment company” can refer to organizations that operate in the following areas:
Investing in various business projects.
The activities of such an investment company will thus be associated with various financial investments, most often carried out in the format:
- direct investment;
- portfolio investment.
An investment company that directly participates in the activities of financed projects in one way or another acquires the ability to make key decisions related to the development of the project. As a rule, through the purchase of a controlling stake in the enterprise. In this case, the investor can earn money through a wide range of business management tools - from increasing the capitalization of assets to building useful business connections, which can subsequently bring benefits.
Portfolio investing involves the purchase of a share, usually in a smaller amount, and a much more limited participation of the investor in the activities of the financed business. The investor in this case makes money through the subsequent capitalization of the company and the growth in the value of its assets (securities).
Brokerage trading - providing various services in this direction.
Here the investment company most often acts as:
- intermediary in trading activities (providing trading platforms for the use of an entrepreneur, acting as his authorized representative in certain legal relations);
- a consultant who helps the entrepreneur, under certain conditions, choose the most profitable deals;
- co-investor or agent of other investors - assisting the entrepreneur in financing his activities that are related to trade.
Capital (investment) management.
Here, the investment company acts rather as an investment object - receiving financial assets from other investors for trust management. However, its main task is to subsequently extract profit from the capital received, and therefore the function of the investment subject still remains with the management company.
All 3 types of investment companies play an important role in the national economies of most countries of the world. An entrepreneur who wants to build a successful business or increase existing capital may experience the same need to turn to each of these types of organizations.
Of course, we have considered a far from complete list of possible interpretations of the concept of “investment company,” but they can rightfully be considered among the most common. The term in question is extremely comprehensive and can correspond to a wide variety of types of business entities.
Let us now study how an entrepreneur can choose a reliable partner in the field of investment - based on the criteria reflected in the rating of investment companies and on other public data.
An investment company as a classic investor: how to choose a partner?
The activity of an investment firm as a classic investor - an entity that invests its own capital in other businesses - can be carried out in different forms. Among the most common types of such firms is a venture capital fund.
The main criteria that you can focus on when choosing such a fund as a financial partner include:
- duration of activity in the market - Russian, international (the results of the fund’s work during crisis periods can be especially indicative);
- financial indicators (capitalization of the fund itself, the projects it finances);
- information on investment results - based on the example of major projects;
- expert reviews published in thematic media, transcripts of conferences and business meetings.
The largest venture funds in Russia, which can rightfully be considered reliable and competent partners in the field of investment, are Runa Capital, Almaz Capital, Life.SREDA, Leta Capital, ru-Net Holdings. These corporations operate in a variety of segments, but their common line of business is information technology.
The activities of venture funds involve financing, as a rule, young innovative investment projects - startups with a high risk of bankruptcy, and at the same time promising from the point of view of subsequent capitalization - in case of successful development of a market niche. It happens that one successful project in which a venture fund took part pays off a dozen unprofitable ones. This is what many modern venture investors are designed to do.
An entrepreneur who wants to receive financing from a venture fund must first of all be interested in:
- manufacturability of the proposed solution;
- prospects for market expansion of such a solution;
- the feasibility of implementing the solution within the target market niche;
- own competence, level of team training;
- the elaboration of the startup’s business model as a whole.
As a rule, venture funds evaluate business ideas proposed to them on their merits, trying to avoid formalities. But in some cases, the correct presentation of the project plays no less a role than the essence of the innovative concept.
It happens that venture funds themselves find out about promising startups and approach them on their own initiative. In this case, the parties will have to work out in detail the terms of cooperation and the role of the investor in business management.
It may be limited to only portfolio participation, or it may involve the most active involvement of financiers in the development of a young business.
Investment broker company: choosing a reliable counterparty
An entrepreneur who wants to make money by trading securities will go to another investor who provides brokerage (and related) services. An entrepreneur will expect competent assistance from a partner in conducting a wide range of transactions on the stock market and other platforms, which involve making a profit by investing capital in various valuable assets.
Brokers appeared as a result of the growing need among investors, first of all, for reliable intermediaries that give the investor the opportunity to trade using effective and safe instruments. But how can you check the reliability of an investment company when it comes to brokerage services? As in any other area of partnership, the best way here is to try cooperation with different suppliers in practice. But if this is not possible, then you can try to assess the prospects of partnership with selected brokers based on various public information. For example, those that reflect:
- convenience of opening an account (the ability to open an account online or through a nearby partner is appreciated, so that there is no need to travel to the other end of the city or to another city at all);
- conditions and efficiency of depositing and withdrawing funds;
- level of access to various markets and trading platforms (the more there are, the more diversified trade can be);
- the opportunity to receive consultations and training (the level of both paid and free services for solving such problems is assessed);
- convenience of software (and other tools for remote account management - for example, a telephone account management system) from the broker;
- level of customer support.
The most famous and reliable Russian brokers include:
- "Finam";
- Renaissance Broker;
- BC "Region";
- IC "Veles Capital";
- KIT Finance.
The leading Russian banking brands - Sberbank, VTB-24, Alfabank, Promsvyazbank - also have excellent positions in terms of brokerage services. In many cases, it is possible to contact them by visiting familiar bank offices. There you can conclude an agreement on brokerage services, and, if necessary, terminate it.
The largest brands in the brokerage industry tend to have large networks of regional representatives. It will not be difficult for an interested investor to find the broker’s closest partner, get advice from him and conclude an agreement.
By choosing a reliable broker who has extensive experience in the Russian market, an entrepreneur can be confident in the safety of his own capital - both existing and earned during trading activities, and can count on the use of technologically advanced and effective investment tools.
A large broker will minimize any legal difficulties in using an investment account - for example, if it comes to purchasing foreign assets. It is in the interests of a large broker to retain the client, and he will try to do this by constantly improving his work.
Investment management company: criteria for choosing a partner
Another type of investment company is an organization that takes capital into trust management in order to ensure its growth (and earn money on interest and other terms of cooperation of the investor).
A management investment company is an economic entity that has resources at its disposal for financial investments in a wide range of assets. Among the most common are the assets of mutual investment funds. Their advantage lies in diversified sources of capital growth. If there are drawdowns in the capitalization of one segment, there are options to detect segments where securities are actively growing in price.
Of course, finding profitable segments is not an easy task, requiring a high level of competence of the management company’s experts. How to choose a reliable partner among a large number of players in this market segment? The main criteria that can be taken into account in this case include:
The amount of equity capital of the investment company.
Obviously, the higher this indicator, the more reliable the business, the more actively other investors and owners invest in it.
Volume of net assets.
Likewise, the larger it is, the more stable the company is, the more solvent it is in relations with its creditors and counterparties.
Common criteria for financial market players:
- duration of presence on the market, experience in overcoming crises;
Investing in various areas is a profitable activity. It is this direction that will be discussed in our article, which will allow you to understand what investment companies do.
The definition of “investment” is reflected in Federal Law No. 39-FZ of February 25, 1999. It is one of the main elements that reveals the essence of the activities of specialized companies, whose work is related not only to the increase in financial products. It is aimed at the development of individual enterprises and entire industries.
Before answering the question “What does an investment company do?” in more detail, it is necessary to understand the meanings of basic terms and concepts:
- Investments are funds, property, securities and other items used to obtain financial gain.
- Investment companies are organizations that manage securities (see) and other financial units. They carry out operations aimed at developing the enterprise, expanding the range or investing in new areas of activity to obtain economic benefits.
There are two main types of companies conducting investment activities: open and closed.
Closed organizations
Investment companies are also called funds. Their closed version involves the accumulation of finances through the distribution of various types of shares between investors. This occurs at the time of formation of the organization. The number and composition of investors is limited and clearly defined.
Shares may not be repurchased by the company during the entire period of its existence. Investment capital has a fixed amount. It operates continuously, and shareholders receive ongoing profits from the amounts invested in the fund.
Open organizations
An open-end investment company is an organization that issues ordinary bonds. Due to this, the capital of such a fund is formed. Securities are freely bought and sold. Their price may fluctuate depending on current market indicators. Accordingly, the capital of an open company does not have a fixed value.
Important! Cooperation with open investment companies can bring real profits. But before investing, it is necessary to analyze the activities of the funds and choose the most reliable and proven one.
There is no instruction that can direct the actions of an individual or an enterprise in the field of investments to obtain one hundred percent results. The rating of such companies can help in choosing the most reliable investment partner.
Data on the ten largest companies in the Federation for 2014 are presented in the table:
The most popular investment companies in 2015 are listed in descending order of popularity index:
- Stock market: IC "Finam".
- DC Forex4you.
- SKS Webtransfer, working in the field of lending.
- TeleTrade Group of Companies will provide assistance in the financial market.
- Troy Standard company, which invests in coins made of precious metals: gold and silver.
Investment activity is the wise use of funds. The developing securities market has made the training of young specialists relevant. Acquiring experience and knowledge in the investment field allows company employees to find new opportunities to make a profit.
Activities of open investment organizations
The main activities of investment companies, allowing a large number of participants to make a profit, are:
- Trust management. This method involves investing in the type of activity that the company chosen as a partner recommends. The owner of the finance simply provides it, and the investment decision is made by the investment company. At the same time, the scope of investment and all the nuances of the design and generation of an idea depend on the open fund.
- Brokerage activities. Participation in trading on financial markets involves the use of an intermediary. It provides the platform and other components. The owner of the finances provides them to the broker and voices his desire to invest in a particular enterprise. The decision is up to the trader.
- Lending. The essence of such investments is investing in a company that provides lending services to individuals. Financial investments are transferred to a specific account and certain amounts are issued from them to those wishing to make a loan. The amount of money earned by a trader depends on the starting capital and turnover.
There are many more ways to invest money. There is nothing unique; each potential investor is able to determine the scope and direction of activity.
Large investors
The activities of such areas as energy, oil business, coal industry and other strategically important industries cannot be achieved only with government investments. Therefore, many enterprises use various ways to attract investment from large companies.
Sometimes these can be foreign companies that allow expanding the market for goods or services, setting up new production lines or changing the range. Reputable corporations that have been operating for more than one year and have created a stable basis that generates income often try to attract additional capital.
There are effective ways to attract investment from large companies:
- Performance assessment. Allows you to determine the “value” of a business and build a development strategy.
- Additional issue of shares and their further sale through the stock exchange.
- Cooperation with other large concerns, mergers with them and other methods.
The data given in the text made it possible to understand what an investment company is + what such an organization does. Using them, you can improve your financial situation by generating additional income.
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