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Investment management of financial assets
Section:   eng » Investment Management  
Investment management of financial assets  Investment management of financial assets represents a system of management of financial assets to produce income (profit).


Investment management includes the tactics and strategy for investment management funds. It is based on targeted work to reduce risks and increase profitability of financial investments.


Financial investment is a relatively new phenomenon in the domestic economy. As in Soviet times was not functioning financial market, as such, was not the important part - of the securities market, then there was no possibility of investing in financial instruments, primarily in the securities.

Financial instruments - these are different forms of financial liabilities, both short and long terms, which are the subject of buying - selling in the financial market. The financial instruments comprise securities (assets and derivatives), precious metals, currencies, shares, loans, etc. A significant proportion of investments in financial instruments occupy securities (eg mutual funds in 1999, invested in securities 99.45% of its assets) .


The securities are an important object of investment, both institutional and private investors. Typically, investments are not carried out in one security, and in a number or set of securities, which forms a "portfolio", but this kind of investment called a portfolio.


Portfolio investment has several features and advantages over other types of investments:

• using portfolio investment can be put together securities are investment quality, which are unattainable by investing capital in a separate valuable


• portfolio investments at the skillful management ensures the required stability of income at the minimum permissible


• portfolio investments allows you to choose a portfolio which gives the possibility to solve certain investment

task-specific investor.


Under the strategy, management of financial investments to understand the direction and ways of using financial assets to extract the maximum possible benefit. Management strategy is being developed within the framework established in the country of rules and restrictions on financial investments.


Rapidly changing situation on the stock market imperfection and variability of the legislative framework, the inflation surges require the use of a flexible investment strategy.


Forming a strategy for managing financial assets includes several stages:

• formulation of investment objectives;

• The development of measures to achieve goals;

• a specific strategy for specific periods;

• assessing the investment strategy.

The tactics of management is a set of methods and techniques to achieve the goal in concrete terms.


The object of the investment management of financial assets are securities and their derivatives.


The purpose of the investment management - the selection of such securities in the portfolio that would ensure a high yield at the lowest acceptable risk.


Investment management of financial assets includes various methods and principles for decision:

• about investing money in securities;

• the types and amounts of financial investment;

• the time of investment.


Investment management includes the following steps:

• development of investment policy;

• analysis of securities;

• formation of an investment portfolio;

• restructuring the investment portfolio;

• assessment of investment activities.


Develop an investment policy includes:

• defining the purpose of investment funds in securities;

• the ratio of goals and financial capabilities;

• the ratio of risk and return.


Analysis of securities aimed at identifying such securities, which may give a capital gain.


In order to determine what securities may increase the income, applies fundamental and technical analysis.


Fundamental analysis is based on the fact that the quotation of securities reflect the state of the economy as a whole, as well as industry and the company itself - the issuer. In this regard, first of all analyze the macroeconomic indicators. Then it is necessary to conduct industry analysis, during which reveals the industry that can provide the greatest interest to potential investors. Industry analysis is complemented by an analysis of the firm (enterprise). For this study the balance of the firm, calculated the various indices, solvency ratios, profitability, financial stability and liquidity.


On the basis of studies of various factors revealed trends for previous periods, and on this basis, is projected to further development of the company. Such analysis can serve as a basis for making investment decisions about investing money in shares of the company, which is more stable, reliable and promising.


Fundamental analysis requires an examination of a large number of statistical data.

Technical analysis is a method of studying the dynamics of the stock market to forecast the direction of price movement. The main users of technical analysis are traders. Technical Analysis:

a) conducting a study movements in securities;

b) identify trends and directions of change;

a) forecast on this basis, the movement of prices in the future.

Technical analysts believe that everything that happens in the stock market is subject to one or another trend. The main objective of technical analysis - to identify these trends early in their development and implementation of trading securities in accordance with the direction of this trend.


Both fundamental and technical analysis aimed at predicting the dynamics of the market, they are used to solve the same problem, namely the definition of what direction prices will move in the stock market.

Other Related News:

  • Formation of an investment portfolio
  • The classification of investment portfolios
  • The nature and function of investment management
  • The purpose of investment analysis
  • Forms of Foreign Investment

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