What is a Financial Investment?

Financial Investment

Financial investment: It is an economic process represented by the possession by the investor of a financial asset in order to achieve a great financial return in the future, and it is involved in several areas, and we can define it as one of the types of associated investment . with stocks, bonds, treasury bills and exchangeable commercial instruments.

Financial Investment Objectives

• Ensure the future of the people and sectors that carry out the project, especially for the elderly who are on the cusp of retirement. 
• Achieve a large current income commensurate with the life and luxury experienced by the investor. 
• Ensure that there is a continuous and constantly increasing development of wealth by obtaining acceptable profitability percentages. 
• Achieve a capital gain by protecting funds from falling into the trap of declining purchasing power. 
• Putting income under protection away from taxes imposed by legislation and regulations. 
• The pursuit of development and the achievement of wealth as much as possible.

Financial Investment Tools

The financial market deals with financial investment through a set of main tools, the most important of which are: 

• Stocks: It is a financial instrument represented by a long-term securities body, or in the form of instruments that are entitled to ordinary shares. within the ownership of the capital of the issuing entity, and are classified into ordinary and premium shares. 

• Bonds: It is a direct investment tool that has full negotiation capacity in financial markets, it can also be defined as an instrument that has the status of a long-term loan issued by bond issuers. 
• Financial derivatives.

Reasons For Financial Investment

• The real desire to achieve economic expansion and development. The initiative to renew everything that serves the public interest, particularly from an economic point of view.
• Seeking to improve labor standards and conditions.
• Desire to achieve personal reasons such as strategy, pride and others.
• Generate investment awareness among individuals and sectors to a high degree in order to obtain the desired returns.
• Create an investment climate that combines economics, politics, and social life in a framework to encourage individuals or savers to take risks when investing.
• Provide multiple investment tools for people and sectors, and give them the opportunity to choose the most suitable field for them.

Types Of  Financial Investment

• According to the legal norm, it is classified as:

1. Private investment: It is exercised by a natural and legal person with the aim of obtaining a material benefit.
2. Public investment: Also called government investment, and includes all plans implemented by the government, whether economic or social, as well as development plans related to political and intellectual trends. 
3. Foreign investment: These are investments made by third parties to become a necessary source of financing for any economic development project, as is the case in developing countries.

• According to the criterion of economic activity, it includes:

1. agricultural investment. 
2. Industrial investment. 
3. Investment in services.