The risks of investment decision-making are mainly reflected in inaccurate project positioning and omissions in decision-making procedures.
Each project has a specific industry, and investors do not understand the industry, industry cycle and market environment where the project is located, which will cause industry positioning risks. Incomplete understanding of the technical level and production capacity of the project enterprise and inaccurate positioning of the development stage of the invested enterprise will lead to the risk of investment type selection.
Take the investment in the real estate industry as an example. When the economy turns from a trough to an inflection point of recovery, enterprises such as construction and cement will take the lead in benefiting, and the stock price rise will start ahead of schedule. However, real estate is a cyclical industry. Once the market demand is close to saturation, the development pressure of the real estate industry will double. At this time, investors should consider turning.
In addition, before making investment decisions, we have to go through a series of procedures, such as investment letter of intent, due diligence, financial and legal audit, etc. Imperfect investment procedures, incomplete due diligence, and missing procedures may cause unpredictable risks.
Second, operational risks.
Enterprise management risk mainly refers to the management risk of the invested enterprise. The risk may be caused by changes in the market environment of the industry where the project is located, such as economic recession. It may be a mistake in business decisions, such as blind expansion and excessive diversification. It may also be that the ability of enterprise managers is insufficient or the management team is unstable.
Changes in business conditions can easily lead to adverse situations such as performance decline, shutdown and bankruptcy. , thus affecting the withdrawal of equity investment funds through listing, equity transfer and management repurchase. , resulting in no return on equity investment or even loss of principal. In the worst case, it may even lead to a complete loss of principal.
An investment company is a kind of financial intermediary, which concentrates the funds of individual investors and invests them in many securities or other assets. "Asset concentration" is the core meaning behind securities investment companies. In the investment portfolio established by the investment company, each investor has the right to claim the investment portfolio in proportion to the investment amount.
These investment companies provide a mechanism for small investors: they can organize themselves to obtain the benefits of large-scale investment.
In a broad sense, an investment company refers to an enterprise organization that collects a large amount of funds and makes a reasonable combination according to investment objectives. Including trust and investment companies, finance companies, investment banks, fund companies, commercial banks, insurance companies and other financial institutions, as well as all kinds of enterprises involved in property rights investment and securities investment.
Its business scope includes buying stocks and bonds of enterprises, participating in the establishment and business activities of enterprises, providing medium and long-term loans, operating domestic and foreign government bonds and fund management. The main sources of funds are issuing their own bonds, stocks or fund units, obtaining loans from other banks and accepting entrusted deposits.
In a narrow sense, an investment company refers to the main body of a legal person investment fund and is a profit-making joint stock limited company established according to law. Investors become shareholders by buying shares in the company, and the shareholders' meeting chooses an investment management company to manage the company's assets.
According to the business content of investment companies, we can distinguish their enterprise types. Let's take a look at the specific contents of several investment types.
Equity investment:
Equity investment refers to the acquisition of shares of the invested unit through investment. Specifically, it means that an enterprise buys shares of other enterprises or directly invests in other units with monetary funds, intangible assets and other physical assets, with the ultimate goal of obtaining greater economic benefits.
Debt investment:
Refers to investments made to obtain creditor's rights, such as buying corporate bonds and treasury bills, which are all creditor's rights investments. Investment Co., Ltd. makes this kind of investment not to obtain the surplus assets of other enterprises, but to obtain the interest higher than the bank deposit rate, and to ensure that the principal and interest are recovered on schedule.
Securities investment:
Securities investment refers to the investment behavior of investors to obtain dividends, interest and capital gains by buying stocks, bonds, funds and other securities and financial derivatives.