It is believed that the investment strategy to attract investment company must:
- Have well developed and long-term plan for the future. Investors want to know that their contributions will bring further gains.
- Have a good reputation in the community. Investing in the shadow, an investor risk of losing their profit, so choose only those businesses that are credible.
- Engage in open, that is transparency. This requires the financial statements and work with the media.
- Much depends upon the internal policies in the country where the enterprise is located. For the contributions of investors choose the most stable countries.
However, in practice these conditions are necessary for portfolio investors. Investment may well be involved, and without these conditions, but investor confidence in their rights to dispose of capital and profits. Such confidence can guarantee not only the laws and transparency in accounting, but also a personal connection, such as government or parliament, obtaining the right of direct control over the situation at the enterprise through a controlling stake and the appointment of a director or controlled by private direct supervision. A significant factor in attracting investment is the ratio of profit and risk. Some investors are choosing lower risk and agree to a smaller profit. Some investors will choose the higher profitability of investments, in spite of heightened risks. Commodity companies do not have to choose: go to where there is a resource. In addition, to attract investment are sometimes created special conditions. An example of the creation of such special circumstances are special economic zones (SEZ). Set of conditions for the investor is sometimes called the “investment climate”. Read the bright idea about gold oz.
Investments are characterized by, among other things, two interrelated parameters: the risk and profitability (return). As a rule, the higher the investment risk, the higher should be their expected returns. To describe the relationship between risk and profit is often used model of CAPM.
The value of the investment risk indicates the probability of loss of investments and income from them. The value of the total, integral risk is composed of seven types of risk: the legislative, political, social, economic, financial, criminal, environmental. While the national average risk is taken as unity, and actual results may vary in regions.
