Investment management – we set goals, efficiency. stages

The author of the article: Victoria Pchelinova

Rational use of capital in order to increase profitability with minimal risks is the main goal of investment activity. Investment management is a system aimed at the efficient implementation of promising investment methods to increase the company’s working capital. The process includes analysis, forecasting and further planning of the market situation.

Investment management

Management Basics

Any type of economic activity implies obtaining material benefits, and investment activity is no exception.

But in order to achieve significant results, you need to have knowledge and skills in investment management. The main goal of the management process is to maximize the income of a legal entity or individual investing in investment projects, while minimizing potential risks.

The increase in available assets determines the investment task, after which a choice is made in favor of a certain direction to solve it. At the same time, such tasks can be solved both at the level of a company or individual, and on a national scale.

Investment management can be done in different ways. But in each case, the process begins with a careful analysis of indicators such as:

  • risk;
  • profitability;
  • liquidity;
  • the ability to redirect capital to another area.

Most often, an investor expects to receive a stable income or accumulate a certain amount. To achieve this goal, not abstract, but concrete figures are needed, which are commensurate with real possibilities.

Investment objectives

As a rule, investment management is determined by goals and interests. investor

What tasks should be performed thanks to rational investment management:

  1. Achieve the profitability defined by the set goals and ensure high profits with minimal losses.
  2. Investment methods should have guaranteed collateral in the presence of promising investment programs.
  3. Finding ways to accelerate the process of obtaining maximum income from investment in promising projects.
  4. Ensuring regular profit from investment activities in order to achieve financial stability for the investor.
  5. Prevention and timely elimination of possible risks when investing free assets.
  6. Carrying out measures to ensure the attractiveness of investments if they need to be resold in the future.
  7. Constant control and analytical analysis of the implementation of investment projects.
  8. An investment portfolio is formed with capital investment in various areas of activity, taking into account their liquidity and probable income.

The set of tasks, as a whole, is a single process, the stages of which are interconnected. That is why tasks should not only be synchronized, but also prioritized.

investment stages

Management stages

Effective investment management consists of stages, on the competent implementation of which the final result of investment activity depends.

Stage 1

An in-depth analysis of the situation on the investment market in the country and the organization of interest is carried out. Moreover, all calculations must be carried out taking into account the investment legislation.

Stage 2

After assessing the investment attractiveness, a choice is made in favor of one or another direction. At this stage, it is important to analyze in detail the likely profitability of the selected area, taking into account the geographical location of the area of ​​investment activity.

Stage 3

After considering all investment proposals in a promising direction, an investment portfolio is created. It should include the most attractive projects in terms of profitability.

Stage 4

The next item in investment management is planning further actions.

From this point on, it is important to carefully control fluctuations in the investment market in order to timely reinvest capital in a more profitable industry.

Stage 5

Throughout the entire investment process, it is necessary to carry out measures to manage possible risks. To do this, you need to timely track and eliminate the likely causes that can negatively affect the final result.

The investor’s efficiency is significantly influenced by incorrect decisions at any of the links in the investment strategy. To extract maximum benefits, all stages of management activities should not contain errors that can lead to an undesirable result.


Therefore, when developing a preliminary strategy, you need to have complete confidence in its impeccability and exemplaryness.

Practical advice

  1. Invest free capital in the business, the intricacies of which you are most familiar with. There is no need to waste time guessing directions, the essence of which is not clear to you.
  2. Before investing capital, determine for yourself how much you are willing to lose and how much you want to earn. And, based on these values, develop an investment plan for yourself.
  3. When choosing an investment direction, do not rely on intuition, a sober mind and cold accurate calculation – the key to financial success.
  4. After investing assets, you do not need to wait for instant profit. Bet on long-term investments, do not get nervous and remain indifferent when investing in the long term.
  5. Use the crisis as a time of great opportunities for investing in a ready-made business. After all, it is during the economic downturn that entrepreneurs sell it at a “ridiculous” price.
  6. If stocks start to fall, don’t expect a miracle, sell them. It is more correct to find a more profitable object for investment.

Output

In fact, investment management occurs in a vicious circle. Having decided to start investment activities, the investor analyzes the proposals and invests money, creating an investment portfolio. If the project does not meet expectations, the assets are withdrawn, and a return to the first stage of the management process occurs. And the movement in a continuous cycle occurs constantly, in order to prevent risks in a timely manner as a result of regular analysis and ensure maximum income.