Considerations Before Making Investments

1016 WordsAug 25, 20105 Pages
Investment has got a various number of definitions related to in which context it taken. In our case , we are going to take two contexts to give a definition to this term of “ Investment ’’ In Business Management , Investment can be defined as a tangible assets like equipments, machinery and buildings and intangible assets like patent, goodwill and copyrights . Making a decision for investment is known as capital budgeting decision, regarded as one of the important and key decision. In Finance, Investment can be defined as the purchasing of financial assets and securities from capital market , or buying money market or real properties with high market liquidity. Examples silver, gold, precious items, real…show more content…
Risk implies simply the possibility for the investment to be lost. There are some factors which may affect risk level of an investment: * Interest rate change * Inflation * Changes in the economy * Business failure 5. Take in account Investment Fraud The investment must be made wisely in order to avoid investment scams, each investment opportunity must be researched thoroughly and deeply . The company must get the facts before to invest , and invest the money that the company can afford to lose. To avoid investment scams , these following steps must be taken: * Check to data base if the investment is registered as many investments scams are unregistered securities. So one should always find whether the company has registered its securities with appropriate financial institution. * Check if the person or company selling the investment is recognized or licensed by appropriate financial body. * Check amongst some important information as, recent reports of the company has filled with regulators, verify carefully the company’s financial statements, if the company says does not has been audited or certified by an approved accounted. 6. Time. Another aspect to be considered before making an investment is the length of the time you own the company’s stock . The duration of the time that the
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