The main approaches to the classification of investments. What are the types of investments: modern classification of directions
Investments are made in various forms that require a certain systematization. In economic theory and in practice, investments are classified according to the following main characteristics.
By investment objects capital investments are divided into real and financial.
Real(capital-forming) investments characterize capital investments in the creation and reproduction of fixed assets, the acquisition of land plots, forests, lakes and natural resources, intangible assets (innovations), an increase in inventories and other objects associated with the implementation of economic activities of enterprises. In recent years, individual economists have identified innovative (intellectual) investments as an independent group.
Real investments provide an increase (increase) in the real capital of a company or a separate business entity (an increase in fixed and short-term assets, intangible assets).
Financial(portfolio) investments are investments in various financial instruments, mainly in securities, precious metals, and foreign currency. They can be both an additional source of attracting funds for investments (for example, when placing shares and long-term bonds), and the subject of an exchange game in the stock market.
By purposes of investing real capital distinguish between investments:
strategic- are directed by investors to the creation of new enterprises, new industries, the acquisition of property complexes in another area of activity;
basic f - investments in the modernization and expansion of existing enterprises, the creation of new industries in the same field of activity;
current- sent to replace equipment and other fixed assets, overhaul, replenishment of short-term assets.
By the nature of participation in investment distinguish between direct and indirect investments.
Direct investments provide for the direct participation of the investor in the selection of the investment object and investment of funds. As a rule, such investors are well aware of the object and investment mechanisms they are interested in. Direct investments are directed to the creation and increase of real assets of "their" enterprise or to the authorized funds of other legal entities. In the latter case, the strategic goal of the investor may be the acquisition of a controlling stake, the formation of a closed technological or commercial chain. In this case, he invests in enterprises - suppliers of raw materials, materials, semi-finished products or in enterprises that provide sales of finished products. The purpose of investment can also be the takeover of one company by another or their merger.
Indirect investments are made through financial intermediaries: investment companies and funds, commercial banks, etc. They accumulate funds of individual investors, invest them in, in their opinion, effective investment objects, manage them, and then distribute the resulting income among their clients - investors.
By investment period highlight short-term and long-term investments.
Based on the form of ownership of investors distinguish between investments:
state- they are carried out at the expense of the republican and local budgets, state targeted budget funds and state extra-budgetary funds, as well as state enterprises;
private, which are produced by non-state entities and individuals. In developed economies, private investment accounts for the bulk of investment.
foreign- characterize foreign investments legal entities and individuals, international organizations in the recipient country;
joint is the total capital investment of the resident tov and non-residents.
By the level of investment risk distinguish the following types of investments:
Risk-free investments. These include such investments of funds for which there is no real risk of loss of invested capital and the receipt of the expected income is practically guaranteed.
Low risk investments characterize capital investment in investment objects, the risk of which is significantly lower than the market average.
Medium risk investments are capital investments in objects, the level of risk for which corresponds to the market average.
High risk investments are characterized by a high degree of risk and high profitability, significantly exceeding the market average. This also includes venture capital investments directed to new areas of activity associated with high risk (for example, in the shares of young innovative companies), which are expected to receive very high returns and a quick return on investment.
By regional basis distinguish between investments within the country (national) and abroad (foreign or outside shnie). The latter also includes the purchase by residents of the Republic of Belarus of various financial instruments of other states: stocks, bonds, etc. In the host country, outward investment is foreign.
By the nature of the use of capital in the investment process, primary (start-up) investments, reinvestments and disinvestments are distinguished.
Primary investments are investments of the capital formed by the investor for the first time at the expense of his own, borrowed and borrowed funds for investment purposes (for example, for the implementation of a project, purchase of an enterprise, unfinished construction projects).
Reinvestment represent repeated additional investments for investment purposes of income received from previously made investments.
Disinvestment- this is the release of previously invested capital from the investment process without its subsequent use for investment purposes (for example, upon liquidation of an enterprise with foreign capital).
Investments can be classified by industry: investments in industry, agriculture, construction, etc.
In the economic literature, there is a classification of investment and other criteria.
From characterizing the economic essence of investments, let us move on to considering the main forms of their implementation.
Analysis of the economic literature has revealed a fairly large number of approaches to the classification of investment forms, both at the macro and micro levels.
Let's consider the main ones.
Figure 2.1 shows the classification of investment forms according to the system of national accounts (hereinafter SNA) and the elaborations of the State Statistics Committee of the Russian Federation created on their basis.
Rice. 2.1. Classification of investments according to the SNA
According to this classification, the following types of investments are distinguished.
1) Capital investment ensuring the creation and reproduction of funds. They involve investing capital directly in the means of production and consumer goods. In other words, capital investment is an investment of capital in fixed assets and in the growth of inventories.
Capital investments include:
Fixed capital investments or, in other words, capital investments;
Overhaul costs;
Investments for the acquisition of land plots and natural resources;
Investments in intangible assets such as patents, licenses, research and development, etc .;
Investments in replenishment of working capital stock.
At the same time, capital investments, which are fixed assets, characterize the volume and structure of capital investments. Capital investments should include the following types of costs:
For new construction;
For reconstruction;
Expansion and technical re-equipment;
For housing and cultural and household construction.
2) Under financial investments means investing in financial assets such as stocks, bonds and other securities, as well as objects of protection and bank deposits.
3) As can be seen from Fig. 2.1, the system of national accounts distinguishes intellectual investment... These include investments in training, transfer of experience, licenses, know-how, research and development, etc.
The above classification is limited to one classification feature - investment objects, while the most comprehensive classification of investments is carried out in the work I.A. Blanca.
Figure 2.2 shows the classification of investments according to individual characteristics.
Rice. 2.2. Classification of investment forms according to individual characteristics
According to fig. 2.2 investments are classified as follows:
1. By investment objects
Under real investment understand investments in real assets - both tangible and intangible. Financial investments represent an investment in various financial instruments, among which securities account for a significant share.
2.Po distinguish between direct and indirect investments.
Direct investments- This is the direct participation of the investor in the selection of investment objects and investment of funds. Under indirect investment means investment mediated by other persons (intermediaries).
3. By investment period distinguish between short-term and long-term investments.
Under short-term investments means capital investments for a period not exceeding one year. Long term investment- this is an investment of capital for a period of more than one year. In the practice of large investment companies, long-term investments are detailed as follows: a) up to 2 years; b) from 2 to 3 years; c) from 3 to 5 years; d) over 5 years.
4. By forms of ownership investors are distinguished by private, state, foreign and joint investments.
Private investment- investments made by citizens, as well as by enterprises of non-state forms of ownership. TO public investment include investments made by central and local authorities and administration, as well as state enterprises and institutions at the expense of their own borrowed funds. Under foreign investment means investments made by foreign citizens, legal entities and states and subjects of a given country. Joint investments is a combination of two or more of the above forms of investment.
5. By regionally allocate investments domestically and abroad.
The above classification of investments reflects their most essential features and, if necessary, can be deepened depending on business or research goals.
V.V. Bocharov gives the following classification of investment forms:
1. By investment objects allocate real and financial investments.
Real investment(investment) - advance payment of money in tangible and intangible assets (innovation). Capital investments are classified:
By sectoral structure (industry, transport, agriculture, etc.);
Reproductive structure (new construction, expansion, reconstruction and expansion of existing enterprises);
Technological structure (construction and installation work, purchase of equipment, other capital costs).
Financial investments- investments in securities: equity (shares) and debt (bonds).
2. By the nature of investment participation- direct and indirect investments.
Direct investments imply the direct participation of the investor in the selection of an object for investing funds. Indirect investment carried out through financial intermediaries - commercial banks, investment companies and funds, etc. The latter accumulate and allocate the collected funds at their discretion, ensuring their effective use.
3. By investment period investments are divided into short-term (for up to 1 year) and long-term (for more than 1 year). The latter of them serve as a source of capital reproduction.
4. By form of ownership investments are subdivided into private, state, joint and foreign.
Private investment express investment in objects of entrepreneurial activity of legal entities of non-state forms of ownership, as well as citizens. Public investment characterize the investment of capital of state unitary and municipal enterprises, as well as funds from the federal and regional budgets and off-budget funds.
5. By regionally investments are subdivided into investments within the country and abroad.
6. By investment risk level distinguish the following types of investments:
- risk-free investment- investing in such investment objects for which there is no real risk of losing the expected income or capital and the receipt of real profit is practically guaranteed;
- low risk investments- capital investment in objects, the risk of which is below the average market level;
- average risk investments- capital investment in objects, the risk of which corresponds to the average market level;
- high-risk investments- investment in such objects, the level of risk for which is usually higher than the market average;
- speculative investment- capital investment in the most risky assets (for example, in the shares of young companies), where the maximum return is expected.
As you can see, V.V.
Bocharov expanded the classification of I.A. Blank, adding an additional classification feature - the level of investment risk.
In the scientific literature, there are other classifications of investments. So, V.M. Juha highlights the following signs of investment classification.
The first classification feature allocated by him are forms of ownership of investments within which they are carried out, and ultimate investment goals.
Figure 2.3 shows the classification of investments in terms of their focus and performance.
Rice. 2.3. Classification of investments by forms of ownership and by ultimate investment objectives (V.M. Dzhukha)
The next feature of the classification identified by V.M. Juha, are market areas where investments appear, and attachment objects.
As shown in Figure 2.4, depending on investment objects and market areas, the author distinguishes portfolio and real investments (capital investments).
Moreover, under portfolio investments means investing in stock market instruments and other financial assets, such as insurance policies, shares in the authorized capital of unincorporated enterprises, targeted deposits, objects of collateral, etc. Moreover, the investment of such funds must meet at least two requirements:
Profitability (to provide a high current income or a rapid increase in investment);
Reliability (liquidity and inflation protection).
Rice. 2.4. Classification of investments by market areas and investment objects (V.M. Dzhukha)
TO real, or capital-forming, investment includes all expenses for construction, expansion, reconstruction (modernization) and equipping investment objects, as well as expenses for the preparation of capital construction and an increase in working capital necessary for the normal functioning of the enterprise.
The last feature of the classification of investments by V.M. Juha highlights ensuring the investment process... This classification is shown in Figures 2.5 and 2.6.
Rice. 2.5. Classification of own investments (V.M. Dzhukha)
Rice. 2.6. Classification of external investments (V.M. Dzhukha)
It should be noted that the author singles out into a separate group foreign investment, defining them as a special form of investment. They can be used as an external source of funding and have three main forms:
- straight;
- portfolio;
- targeted loans at the enterprise level.
1) on purpose:
Production investments, the objects of which are production assets;
Non-productive investments - the reproduction of fixed assets for non-production purposes (social and cultural facilities, etc.);
2) by direction of use:
New construction;
Reconstruction;
Technical re-equipment;
Expansion of existing enterprises;
3) by funding sources:
Centralized, carried out at the expense of the state and trust funds of line ministries and departments;
Decentralized (own and borrowed) - created at the enterprise level at the expense of depreciation deductions, production development fund, lease payments and bank loans;
4) by structure of constituent elements:
Construction;
Drilling;
Installation work;
Equipment;
Tools and inventory;
Other capital investments.
The classification given by V.M. Juha, the most complete, as it includes almost all classification signs. An exception is the classification of investments by the level of investment risk.
All the above classifications of investments must be supplemented with the classification of investments at the enterprise level, shown in Figure 2.7.
Rice. 2.7. Classification of investments at the enterprise level
According to Figure 2.7, from the point of view of the enterprise and depending on the investment objects, investments can be divided into two groups: real and financial... At the same time, real investments express capital investments in tangible assets, and financial investments - in intangible ones.
In turn, real investment are presented in two forms:
1) investments in the development of production, represented by the costs:
For reconstruction and technical re-equipment;
To expand production;
For the release of new products;
For the modernization of products and the development of new resources.
2) investments in the development of the non-production sphere, including the following types of costs:
For housing construction;
For the construction of sports and recreational facilities;
To improve working conditions and increase the level of technical safety.
Financial investments or, as they are also called, portfolio investments, can be divided into the purchase of securities and contributions to the assets of other enterprises. Investments in the purchase of securities are investments in shares and bonds of other commercial organizations, as well as financing of other types of securities with the aim of obtaining certain benefits. Investments in the assets of other enterprises are investments in the assets of manufacturing enterprises, investments in the assets of credit and financial institutions, as well as investments in the assets of other commercial organizations.
The main difference between this classification and those previously considered is that it gives a real idea of what purposes enterprises can direct investments for. In other words, this classification characterizes the investment portfolio of an enterprise. Optimizing this portfolio to minimize risk and maximize economic benefits is one of the most important challenges in the enterprise.
Rice. 2.8. Investment classification
The analysis of the above classifications of investments made it possible to form the classification of investments, presented in Figure 2.8, according to which it is advisable to single out eight main features of the classification:
1) the form of ownership of investment resources;
2) the level of investment risk;
3) the nature of participation in the investment process;
4) investment period;
5) regional feature;
6) objects of investment and use at the enterprise level;
7) sources of funding;
8) economic goals.
This classification, shown in Fig. 2.8, most fully reflects all forms of investment activities carried out by individual economic units.
Question No. 1. The essence of investments, their main classifications and structure.
In the theory of investment, the concept of "investment" is defined ambiguously. In the classical encyclopedic context, investments are defined as long-term capital investments in sectors of the economy at home and abroad. From the point of view of financial parameters (or from the standpoint of a financier, accountant), investments can be presented as any types of assets invested in production and economic activities with the aim of subsequently generating income and benefits. From the point of view of economic (and therefore, from the standpoint of assessing the economic feasibility of using resources in the form of fixed and working capital), investments are defined as the cost of creating (acquiring), expanding, reconstruction and technical re-equipment of fixed capital. From the point of view of economic theory, investment is the transfer of property or the right to property, since no increase or expansion of material wealth occurs.
Classification of forms and types of investments
Investments are made in various forms. In order to systematize the analysis and planning of investments, they can be grouped according to certain classification criteria. The classification of investments is thus determined by the choice of the criterion underlying it. The basic typological feature in the classification of investments is the object of investment.
Real and financial investments
For investment objects, real and financial investments are allocated. Since in the economic literature there are various approaches to determining the essence and structure of these economic forms, their relationship with other classification groups of investments, it is necessary to clarify the content of real and financial investments, to determine their objects.
Real investments act as a set of investments in real economic assets: material resources (elements of physical capital, other tangible assets) and intangible assets (scientific and technical, intellectual products, etc.). The most important component of real investment is investment in the form of capital investment, which in the economic literature is also called real investment in the narrow sense of the word, or capital investment.
Financial investments include investments in various financial assets - securities, shares and equity participation, bank deposits, etc.
Direct and portfolio investments
For the purpose of investment, direct and portfolio (indirect) investments are distinguished.
Direct investments act as investments in the authorized capital of enterprises (firms, companies) in order to establish direct control and management of the investment object. They are aimed at expanding the sphere of influence, ensuring future financial interests, and not only at generating income.
Portfolio investments represent funds invested in economic assets for the purpose of generating income (in the form of an increase in the market value of investment objects, dividends, interest, other cash payments ) and risk diversification. As a rule, portfolio investments are investments in the acquisition of securities belonging to various issuers and other assets.
Direct investments, which are investments aimed at establishing direct control and management of the investment object, can be carried out not only in real economic assets, but also in financial instruments. The ability to manage the investment object is achieved through the acquisition of a controlling stake, other forms of controlling participation. Portfolio investments are investments aimed at obtaining current income.
Consequently, real and financial investments, on the one hand, and direct and portfolio investments, on the other, act as different types of investment groups.
Classification of investments by timing, forms of ownership of investment resources, regions, industries, risks and other characteristics
Forms of investment activity can also be classified by timing, forms of ownership of investment resources, regions, industries, risks and other characteristics (Table 1.1).
By investment termsdistinguish short-term, medium-term and long-term investments.
Under short-term investments usually means investments for a period of up to one year. These investments are usually speculative in nature. Medium-term investments represent investments for a period of one to three years, long-term investments - for a period exceeding three years.
By forms of ownership of investment resources distinguish private, public, foreign and joint (mixed) investments.
Under private (non-state) investment understand the investment of funds of private investors: citizens and enterprises of non-state ownership.
Table 1.1. Classification of investment forms
Classification signs |
Investment forms |
By investment objects |
Real investment |
By investment terms |
Short-term investments |
By investment purpose |
Direct investments |
By investment sphere |
Manufacturing investments |
By ownership |
Private investment |
By region |
Domestic investment |
By risks |
Aggressive investment |
Public investments - these are investments made by state authorities and management, as well as by state-owned enterprises.
TO foreign investment include investments of funds of foreign citizens, firms, organizations, states. Under joint (mixed) investments understand the investments made by domestic and foreign economic entities.
By regional basis distinguish between investments within the country and abroad. Domestic (national) investment include investments in investment objects within a given country.
Investments abroad (foreign investments) are understood as investments in investment objects located outside the territorial limits of a given country.
By industry basis allocate investments in various sectors of the economy: industry (fuel, energy, chemical, petrochemical, food, light, woodworking and pulp and paper, ferrous and non-ferrous metallurgy, mechanical engineering and metalworking, etc.), agriculture, construction, transport and communications, trade and public catering, etc.
By risks distinguish between aggressive, moderate and conservative investments. This classification is closely related to the selection of the appropriate types of investors. Aggressive investment are characterized by a high degree of risk. They are characterized by high profitability and low liquidity. Moderate investment differ in the average (moderate) degree of risk with sufficient profitability and liquidity of investments. Conservative investments are investments of reduced risk, characterized by reliability and liquidity.
The importance of the tasks of clarifying the role of investments in the reproduction process necessitates the introduction of such a classification criterion as the sphere of investments, in accordance with which it is possible to distinguish production and non-productive investment.
Of decisive importance for the economic system are production investments that ensure the reproduction and growth of individual and social capital.
Classification of investments carried out in the form of capital investments
In the economic literature, there are other classifications of investments, reflecting, as a rule, the detailing of their main forms. In particular, investments made in the form of capital investments, are subdivided into the following types:
defensive investments aimed at reducing the risk of purchasing raw materials, components, maintaining prices, protecting them from competitors, etc .;
offensive investments due to the search for new technologies and developments in order to maintain a high scientific and technical level of products;
social investments aimed at improving the working conditions of personnel;
mandatory investments, the need for which is associated with the satisfaction of state requirements in terms of environmental standards, product safety, other conditions of activity, which cannot be ensured by only improving management;
representative investments aimed at maintaining the prestige of the company.
Depending on thefocus of actionallocate:
initial investment (net investment) made upon acquisition or founding of an enterprise;
extensive investments aimed at expanding production potential;
reinvestment, which is understood as the investment of released investment funds in the purchase or manufacture of new means of production;
gross investment, including net investment and reinvestment.
Veconomic analysisanother grouping of investments carried out in the form of capital investments is also applied:
investments aimed at replacing equipment worn out physically and / or morally;
investments in equipment modernization. Their goal is primarily to reduce production costs or improve the quality of products;
investments in production expansion. The task of such investment is to increase the possibilities of producing goods for previously formed markets within the framework of already existing industries while expanding the demand for products or switching to the production of new types of products;
investments in diversification associated with a change in the range of products, the production of new types of products, the organization of new sales markets;
strategic investments aimed at introducing the achievements of scientific and technological progress, increasing the degree of competitiveness of products, reducing economic risks. Structural changes in the economy are implemented through strategic investments, key import-substituting industries or competitive export-oriented industries are developing.
The least risky of these types of investments is investment in the replacement and modernization of equipment. Investments in expansion of production and strategic investments are characterized by an increased degree of risk (Fig. 1.2).
The relationship between the types of investments and the level of risk is due to the danger of a change in the market reaction to the results of the firm's performance after the implementation of a particular type of investment. It is obvious that the risk of negative consequences of investment will be lower if the production of goods already approved by the market continues and higher if a new production is organized.
Question number 2. Methods for accounting for investment risks when determining indicators of the effectiveness of investment projects.
The main goal of the investment activities of economic entities is to increase income from investment activities with a minimum level of investment risk. The search for the optimal combination of profitability and risk presupposes the need to take into account the action of many different factors, which makes this task very difficult. At the same time, the solution to this problem is a condition for the effectiveness of any economic activity.
Investment risks: essence and classification
Investment risk is the likelihood of financial losses in the form of a decrease in capital or loss of income, profits due to uncertainty in the conditions of investment activities.
Risk-reward ratio
Return and risk are known to be related categories. The most general patterns reflecting the relationship between the assumed risk and the expected return on the investor's activities are as follows:
more risky investments, as a rule, are characterized by higher returns;
with an increase in income, the probability of its receipt decreases, while a certain minimum guaranteed income can be obtained with practically no risk.
The optimality of the ratio of income and risk means reaching a maximum for the combination "return - risk" or a minimum for a combination of "risk - return". In this case, two conditions must be met simultaneously: 1) no other ratio of profitability and risk can provide a higher profitability at a given or lower level of risk; 2) no other ratio of return and risk can provide less risk at a given or higher level of return. In fig. 1 (Relationship between risk and return) shows that under the assumption of taking one risk and one source of income, there is only one such combination - point E.
However, since in practice investment activity is associated with multiple risks and the use of various resource sources, the number of optimal ratios increases. In this regard, in order to achieve a balance between risk and return, it is necessary to use a step-by-step method of solving by successive approximations. Implementation of investment activities involves not only taking a certain risk, but also providing a certain income. If we assume that the minimum required income corresponds to the minimum risk, then several sectors can be distinguished, characterized by a certain combination of income and risk: A, B, C.
Sector A, investments in which do not provide the minimum required income, can be considered as an area of insufficient profitability. Operations in sector C are associated with high risks that reduce the possibility of receiving the expected high returns, therefore, sector C can be identified as an area of high risk. Making investments in sector B provides the investor with income at acceptable risk, therefore, sector B is the area of optimal values of the ratio of return and risk.
Investment activity is associated with various types of risks.
Classification of investment risks
In general, the classification of the most significant and investment-specific risks is shown in Fig. 2. (Classification of risks of investment activity)
General risks include risks that are the same for all participants in investment activities and investment forms. They are determined by factors that the investor cannot influence when choosing investment objects. Risks of this kind in the theory of investment analysis are called systematic. The main types of general risks include external economic risks arising in connection with a change in the situation in foreign economic activity, and internal economic risks associated with a change in the internal economic environment. In turn, these types of risks act as a synthesis of more specific types of risks. Socio-political risk combines a set of risks arising from changes in the political system, the balance of political forces in society, and political instability. Investors assume political and country risks in the case of small or short-term investments with a corresponding increase in the interest rate. In case of investment lending or project financing, risk reduction can be ensured through the provision of state guarantees. Environmental risk acts as the possibility of losses associated with natural disasters, deterioration of the environmental situation.
Risks associated with measures of government regulation include the risks of changes in administrative restrictions on investment activities, economic standards, taxation, foreign exchange regulation, interest rate policy, regulation of the securities market, legislative changes. Market risk is the risk associated with unfavorable changes in the general economic situation or the situation in certain markets. Market risk may arise, in particular, due to a change in the stages of the economic cycle of a country's development or conjuncture cycles in the development of the investment market. Inflation risk arises due to the fact that, in the event of high inflation, funds invested in investment objects may not be covered by investment income. Inflation risk, as a rule, falls almost entirely on investors (creditors), who must correctly assess the prospects for the development of inflationary processes, therefore, when studying the investment qualities of prospective objects, it is customary to lay down the forecast inflation rates. An important impact on investment efficiency indicators is exerted by the difference in inflation levels by types of resources and products (inflation heterogeneity) and the excess of the inflation rate over the growth of the foreign exchange rate. The transition to settlements in hard currency (or in physical terms for investment planning) does not eliminate the need to take into account the inflation risk, since the presence of inflation affects the indicators of the project not only in monetary terms, but also in physical terms: the impact of inflation changes both the financial results of the project, as well as and its parameters (planned volumes of required resources, production, sales, etc.). It should be noted that accounting for inflationary risks is largely complicated by the incompleteness and inaccuracy of the information available.
The risk of deteriorating conditions for this field of activity includes risks associated with the possibility of increased competition, changes in consumer requirements, banking crises, etc. Other risks include risks arising from economic crimes, dishonesty of business partners, opportunities for non-performance, incomplete or poor-quality performance partners of their obligations, etc. General risks can pose a serious threat to investors, they should be taken into account for all forms and objects of investment. Unlike general risks, specific risks are highly individual for each investor. They aggregate all types of risks associated with the investment activity of a specific entity or with investments in specific investment objects.
Specific risks may be associated with an unprofessional investment policy, an irrational structure of invested funds, and other similar factors, the negative consequences of which can be substantially avoided by improving the efficiency of investment management. These risks are diversified, reduced and depend on the ability of the investor to select investment objects with acceptable risk, as well as to actual accounting and regulation of risks. The totality of the considered risks in terms of their economic content is similar to the concept of non-systematic risk. (Non-systematic risk is also called individual, residual, special or diversified risk.) The identification of systematic and non-systematic risks in the aggregate of risks arising from the investment activities of banks allows us to use the methodological apparatus of the theory of forming an effective investment portfolio in further analysis. When considering specific risks, it seems advisable to highlight in their composition the risks inherent in the investment portfolio and the internal risks inherent in various types of investment. The risk of an investment portfolio arises in connection with a deterioration in the quality of investment objects in its composition and a violation of the principles of forming an investment portfolio. In turn, it is aggregated and includes more specific types of risks. The most significant of them include the following types of risks.
Capital risk is the integral risk of an investment portfolio associated with a general deterioration in its quality, which shows the possibility of losses when investing in investments in comparison with other types of assets. Selective risk is associated with an incorrect assessment of the investment qualities of a particular investment object when selecting an investment portfolio.
The risk of imbalance arises in connection with the violation of the correspondence between investment investments and the sources of their financing in terms of volume and structural indicators of profitability, risk and liquidity.
The risk of excessive concentration (insufficient diversification) can be defined as the danger of losses associated with a narrow range of investment objects, a low degree of diversification of investment assets and sources of their financing, which leads to an unjustified dependence of the investor on one industry or sector of the economy, region or country, on one direction investment activities. At the same time, this risk acts as a conglomerate of various risks (country, sectoral, regional, credit, etc.) in combination with specific features specified in the definition.
The considered risks are specific portfolio investment risks arising in connection with the functioning of the investment portfolio as an integral set, which implies the need to take them into account in the formation and management of the investment portfolio. In addition to these types of risks, it is possible to highlight the risks inherent to one degree or another in various types of investment objects in the investment portfolio, which should be taken into account both when evaluating individual investment investments and the investment portfolio as a whole. The main types of these risks are as follows.
Country risk is the possibility of losses caused by the placement of funds and the conduct of investment activities in a country with an unstable social and economic situation. It includes the corresponding economic, political, geographic, environmental and other risks, which, unlike the similar types of general risks discussed above, can be reduced when the investor chooses other investment objects.
Industry risk - the risk associated with a change in the situation in a particular industry. Sectoral risk is based on the cyclical development of industries, reorientation of the economy, depletion of specific types of resources, changes in market demand and other factors.
Regional risk is the risk of losses due to the unstable state of the regional economy, which is especially characteristic of single-product regions.
Time risk - the possibility of losses due to incorrect determination of the time of investments in investment objects and the time of their implementation, seasonal and cyclical fluctuations.
Liquidity risk - the risk of losses during the implementation of an investment object due to a change in the assessment of its investment quality.
Credit risk - the risk of loss of funds or loss of an investment object of its original quality and value due to non-compliance with obligations on the part of the issuer, borrower or his guarantor. This type of risk is most inherent in banking, it is associated with a possible increase in costs when providing loans at a "floating" rate, which tends to grow, and a decrease in the borrower's solvency. Operational risk is the risk of losses arising from the fact that in the activities of the entity making investments, there are violations in the technology of investment operations, problems in computer information processing systems, etc. The given structure of risks should be supplemented by types of risks characteristic of specific forms of investment.
One of the stages of investment risk management is risk assessment. This assessment is based on the calculation of the likelihood of investment risk. This indicator is a measure of the frequency of the possible occurrence of an adverse event that causes financial losses in the activities of the company. The following risk assessment methods are known.
Expert assessment methods are applied in the event that the entrepreneurial organization does not have the necessary informative data for making calculations or comparisons. These methods are based on a survey of qualified specialists in the field of finance, insurance, followed by mathematical processing of the results of the survey. Expert assessment methods are widely used to determine the level of likelihood of inflation, investment, foreign exchange and some other risks.
Statistical evaluation methods allow you to get the most complete quantitative understanding of the level of risk, therefore, they are often used in the practice of financial management. The disadvantages of this method include the need for a fairly extensive statistical information. When assessing the probability by this method, the average expected value of the result is calculated; standard deviation; the coefficient of variation. Based on statistical methods, the likelihood of risk occurrence is assessed for each financial transaction, investment project under consideration, etc.
Calculation and analytical methods of assessment allow you to quantify the likelihood of financial risks based on the use of the internal information base of the company itself. In this case, the probability of occurrence of individual risks is established depending on the values of the planned indicators of the financial activity of the company.
Analog evaluation methods allow you to determine the level of likelihood of risks for individual, most frequently recurring operations of the company. These methods are used in assessing foreign exchange, investment and credit risks.
It is also possible to quantitatively assess the degree of risk of a project based on indicators of production and financial leverage.
Production leverage is quantitatively characterized by the ratio between fixed and variable costs in their total amount and the variability of the “profit before interest and taxes” indicator. If the share of fixed costs is high, then the company has a high level of production leverage. For such a company, sometimes even a slight change in production volumes can lead to a significant change in profits, since the company has to bear fixed costs in any case, whether the product is produced or not. The higher the level of production leverage, the higher the production risk of the company.
Financial leverage characterizes the relationship between own and attracted long-term financial resources and profit. The level of financial leverage directly affects the degree of financial risk of the company and the rate of return required by shareholders. The higher the amount of interest payable, which is a fixed compulsory expense, the lower the net profit. Consequently, the higher the level of financial leverage, the higher the financial risk of the company.
List of used literature
Investments, their economic essence, classification and structure
Law >> Accounting and AuditingINVESTMENTS, THEIR ECONOMIC ESSENCE, CLASSIFICATION AND STRUCTURE.1. 1. Investments as an economic category and their role in the development of macro- and microeconomics. Investments- ... objects of each specific industry and their the main the funds are the same for all objects ...
Investments... Investment principles
Coursework >> EconomicsIndustry, etc. 4. Funding investment The essence, classification and structure funding sources investment... Finding sources of funding investment there was always one ...
- Coursework >> Economics
Coursework objectives: to identify the economic essence investment; to examine their classification and structure consider the sources, forms and methods ... for the implementation of investment projects in 2009 Volume investment v basic capital, billion rubles Tyumen region...
Economic analysis of investment projects G. Birman, S. Schmidt / per. from English ed. L.P. White. - M .: Banks and stock exchanges, UNITI, 1997
Evaluation of the effectiveness of investment projects: Theory and practice: textbook Vilensky P.L., Livshits V.N., Smolyak S.A. - M .: Delo, 2002.
Investment activities. Kiseleva N.V., Borovikova T.V. - M .: KNORUS, 2005.-432s.
Komarov A.G., Rogova E.M., Tkachenko E.A., Chesnokov V.Ya. Investment design. - SPb .: Publishing house of SPbGUEF, 2001.
Investment analysis. - Kucharina E.A. SPb .: Peter, 2006 - 160s.
Investment design. Nepomnyashchy E.G. Tutorial. Taganrog. Publishing house TRTU, 2003
Economic evaluation of investments. Rimer M.I., Kasatov A.D., Matienko N.I. 2nd ed. –SPb .: Peter, 2007. - 480 p.
Investor's Guide // Consultant Magazine, No. 3, 2006. page 12
Financial management: Textbook for universities / ed. G.B. Pole. - M .: "Finance", Publishing Association "UNITI", 1997
Methods for evaluating investment projects. V.V. Kovalev M, Finance and Statistics, 1998
Investment Decision Making, D. M. Norcott Banks and Exchanges, UNITY, 1997
Investment project: methods of preparation and analysis Lipsits I. V. Kosov V. V.
Methodology for evaluating investment projects. IKF "Alt" 2004
, their role in modern economy 1. Economic essence investment... The term " investments" appeared in the domestic economy relatively recently ...Having decided to engage in such a type of financial activity as investing, the future investor must understand such issues as the main types of investments and their classification.
To begin with, let's figure out what an investment is.
Investments are certain types of intellectual or property values that are invested in certain commercial processes or financial instruments in order to make a profit.
Some of the investments can be attributed to both speculation and investment. This tendency takes place because the border between these two concepts is to some extent not fully defined. The investment term is used as a criterion - if it is not more than a year, then this is referred to speculation, more than a year - to investment. Although, no one calls investing in stock trading speculation, and that is, investments on the stock exchange, although most of the investors closely monitor the economic situation and how things are on the stock exchange, and bet on the profitability, and not on the duration of the investment. Sometimes the differentiation occurs according to the intended purpose. For example, if we are talking about investments in the purchase of equipment, materials, technologies, the introduction of innovations, then they are called investments. If the funds are used to purchase shares, shares, commercial objects, legal rights, trademarks or any other securities, then such investments are called speculation.
In any case, investing is one of the most profitable and convenient ways to increase your own capital and make a rather large amount out of a small amount. Today, you can list many types of investments, and everyone who has decided to devote himself to investing has the opportunity to choose exactly those types of investments that best suit him.
There are many criteria for classifying investments. In this article we will try to consider all of them.
Types of investments, depending on the investment object
By the nature of the investment object, real (direct) and financial (portfolio) investments are considered.
Real investments include investments in real tangible and intangible assets, which include fixed and circulating capital or intellectual property. In most cases, this is a long-term investment in the creation of fixed assets.
Real investments, in turn, are divided into several types:
- Investments in the expansion of own production, which are aimed at increasing the production volumes of an existing enterprise. In some cases, such investments are called extensive.
- Investments aimed at increasing the efficiency of their own production, the purpose of which, as a rule, is to reduce costs by replacing equipment, relocating production facilities, modernizing fixed assets.
- Investments aimed at creating a new production or reconstruction of an existing one. In this case, investment is carried out when it is planned to expand the sales market or release new products.
- Investments in non-own production. This implies participation in investment projects or the fulfillment of any orders (including state ones).
- Investments aimed at meeting the requirements of state governing bodies (to comply with economic standards, safety and other conditions).
Financial (portfolio) investment includes all types of investments that are aimed at directly generating income. In this case, the objects of investment are: currency, stocks, precious metals, bonds and other securities. This type of investment, as a rule, brings profit from two sources: regular payment of dividends and income from an increase in the initial value of investment objects received during their sale.
For both individuals and business representatives, at the moment, the most interesting is financial investment in the Forex market (in particular), securities, mutual funds (mutual funds), shares of developing enterprises, start-ups and other similar projects.
And each investor thinks about whether to choose one type of investment or create an investment portfolio, which will include several types of investments related to completely different areas of the economy and industries. As a rule, reasonable investors choose the investment portfolio option. Hence the second name of financial investments - portfolio investments.
Investments by the nature of investment participation
By the nature of participation in investment, the following types of investments are distinguished:
- Direct investments, when the investor directly takes part in the selection of investment objects. Also, direct investment can mean investing in the authorized capital of an economic entity, in order to generate income and obtain the rights to participate in the management of the investment object.
- Indirect investments - when investment objects are determined not by the owner of the invested capital himself, but by various investment funds, consultants, companies, mutual funds and other financial institutions.
Classification of investments depending on the timing
According to investment terms, investments are divided into:
- Short-term investments - funds are invested for a period not exceeding one year.
- Medium-term investments - investment period from one to five years.
- Long-term investment - investment of funds for a period of more than five years.
Types of investments depending on the return on investment
Depending on the profitability, investments are divided into:
- Highly profitable investments that have a high level of income, significantly higher than the average rate of return on the investment market.
- Average income investments, the net investment income for which is approximately equal to the average return on the investment market.
- Low-yield investments, the return on which is less than the average rate of return in the market.
- Profitable investments that are not made for the purpose of making a profit, which is not actually available for these types of investments. Such investment mainly pursues the goal of obtaining social, environmental or any other non-economic effect.
Classification of investments depending on the level of investment risk
Depending on the degree of possible risks, investments are divided into:
- Risk-free investment. With this investment option, there is no real risk of loss of capital or income, and the investor has a 100% guarantee of a return on investment.
- Low-risk investments, the risk of which is lower than the average risk level in the investment market.
- Average risk investments - when the level of risk is close to the average risk in the investment market.
- High-risk investments - differs in the degree of risk, which is many times higher than the average value. This type of investment also includes speculative investments - when investment takes place in the most risky projects in order to obtain maximum income.
Classification of investments by liquidity level
The degree of liquidity of investments can be completely different, therefore, there is a division into:
- Highly liquid investments. Such investments include those investment instruments that can be converted into money in a short time without a significant loss of their market value.
- Medium liquid investments. This includes investing in those properties that can be converted into money in a period from one month to six months, without a significant loss of their market value.
- Low liquid investments. Investment instruments that can be converted into a monetary equivalent in at least six months. Investments of this kind, as a rule, are carried out in shares of little-known companies, investment projects in progress, or in projects that were implemented using outdated technologies.
- Illiquid investments. Investments of this type cannot be realized independently and are converted into a monetary equivalent only as part of an integral property complex.
Classification of investments by the nature of their use
By the nature of the use of capital, investments are divided into:
- Primary investments, which imply the use of capital, newly formed for investment purposes, which can be created both from borrowed funds and from their own.
- Reinvestment - re-investment of capital, which was formed at the expense of the profit received from the initial investment.
- Disinvestment is the withdrawal of capital that was invested earlier from the investment turnover without its subsequent use for investment purposes.
Classification of investments depending on the form of ownership
If we take the form of ownership as a basis, then the following types of investments can be distinguished:
- Private investments - investments that are made by individuals or companies.
- State investments that are carried out by local and central authorities, unitary enterprises at the expense of borrowed and budgetary funds, or by mobilizing their own sources.
- Mixed investments - when several different investors, companies and institutions, legal entities and individuals and local authorities, investment funds are involved in the investment process.
- Foreign investments that are carried out by foreign individuals or legal entities, states.
- Joint investments in which subjects of several states participate.
Investments depending on the investment area
Geographically, investments are subdivided into:
- Domestic investments. We are talking about investing capital in those objects that are located within the boundaries of a particular region (country).
- External investments. Capital investment in properties located abroad.
Classification of investments depending on the principle of accounting for funds
- Gross investment. This means the total amount of capital invested in a newly created enterprise, the acquisition of funds or objects of labor, intellectual values.
- Net investment is the total gross investment from which depreciation charges are deducted.
Types of investments depending on investment objects
- Investments in physical assets. This type of investment means investing capital in the development of the potential of an enterprise or an entire industry. This investment is the basis for the formation of the production potential of a region, country, industry or enterprise. Investment in physical assets is one of the key factors determining the economic efficiency of production.
- Investments in intangible assets. This type of investment means investing capital in objects that are not tangible assets that are not intended for sale and are used in production for more than a year. This type of investment includes: rights to use land plots, copyrights, licenses, patents, organizational costs, trademarks.
- Innovative investment. This type includes capital investment in objects of scientific and technological progress, in training programs and programs for staff development.
- Initial investments, which are also called net investments, are capital investments that are made when buying or founding a new enterprise.
- Gross investment, which is reinvestment plus net investment. In other words, it is the binding of newly released investment resources by directing them to the manufacture or acquisition of new means of production to maintain the integrity of the company's fixed assets.
In addition to the types of investments listed above, one can also distinguish such a type as an annuity. An annuity is an investment of funds that brings the investor a certain profit at regular intervals. As a rule, contributions to pension and insurance funds are called annuities.
Investment solutions for the acquisition of financial assets have become incredibly popular lately. At the same time, the range of these solutions has expanded so much and became more diversified that separate directions were clearly distinguished in it:
- Investments aimed at the formation of so-called alliances (financial groups, multinational syndicates, consortia);
- Investments aimed at acquiring large enterprises. The purpose of such investment is diversification, access to new sources of financial resources and new markets;
- Investments that target complex financial instruments (along with financial leasing or returnable, for example).
To all of the above, a small clarification should be added: such concepts as investment and financing, although they are interconnected, the terms are far from identical. Although many of these concepts are confused. If financing means the formation and provision of financial resources that are aimed at creating property, then investment should be understood as their use and transformation into capital.
In addition, you should not confuse such two concepts as "capital investment" and investment. Because capital investments, as a rule, mean the creation of new fixed assets (structures, transport, equipment, etc.) and the restoration of old ones. As for investments, this concept is broader and, in addition to the above investments, also includes investing in current assets, intellectual property, and financial instruments. From which it follows that capital investments are nothing more than an integral part of investments.
By the amount of required investments;
By goals;
By the type of relationship of investment projects;
By the type of cash flows generated by the investment project;
By project class;
By the duration of the project;
By the complexity of the project;
As of the investment project;
By the scale of investments and the impact of their consequences;
Based on the result of using the results of scientific and technical developments.
Investment projects can be classified on various grounds.
Some well-known experts (Idrisov A.B., Sheremet V.V., Katasonov V.Yu. and others) classified investment projects only on a few grounds and did not carry out a graphical presentation. Using the well-known elements of systematization and supplementing them, we present a diagram of the signs of dividing investment projects into groups (see Figure 1.).
By the volume of required investments
Division of projects by the volume of required investments is quite subjective and largely depends on the size and financial capabilities of the investor and the investment object. The subjectivity of this element of the classification can be somewhat reduced when passing to the assessment of the share of investments in the revenue or profit of the enterprise, in the country's GDP or the GRP of the region.
By goals
Projects can also be classified by goals , which are set during their implementation. These goals can be different and are not necessarily related to direct profit making. There may be IPRs themselves unprofitable in the economic sense, but bringing indirect income due to gaining stability in the provision of materials, entering new markets for raw materials and products, social effect, reducing costs on other projects, improving the environment, increasing product safety, etc. .. Such IPRs require non-formalized criteria for their assessment.
By the type of relationship of investment projects
It is especially important in the analysis of investment projects to identify the types of their relationships..
IPR are independent if the decision to accept one does not affect the decision to accept the other. According to the author, it is inappropriate to talk about the absolute independence of investment projects, since each of them affects several areas, in which, in turn, other projects are involved. In addition, there is a diversion of resources from one area to another.
Figure 1 - Types of classification of investment projects
Alternative or mutually exclusive projects are IPRs that cannot be implemented at the same time, i.e. acceptance of one automatically leads to rejection of others.
The division of projects into independent and alternative ones is of particular importance when completing an investment portfolio in conditions of restrictions on the total volume of capital investments.
If the upper limit of capital expenditures is an uncertain value, depending on various factors, for example, the amount of profit of the current and future periods, then it is necessary to rank independent IPR according to their priority... This is especially related to the formation of the enterprise strategy.
Projects are related relationships of complementarity if the adoption of a new IPR contributes to the growth of incomes for others. Revealing such relationships implies considering projects as a whole, and not in isolation. This is of particular importance when the acceptance of the project according to the selected criterion is not obvious and additional criteria are needed, incl. the presence and degree of complementarity.
Projects related substitutional relations if the adoption of a new IPR leads to some decrease in income for the current IPR. For example, the commissioning of a tire repair site at an operating tire plant.
By the type of cash flows generated by the project
The stream is called ordinary if it consists of an initial investment (one-off or allocated) and subsequent cash inflows. Flow extraordinary if cash inflows alternate in any sequence with cash outflows. Selecting the type of flow is important when choosing a criterion for evaluating investments, because not all criteria are suitable for evaluating unusual flows.
By type (kind) of the project
Project type- division according to the main areas of activity in which the project is being implemented: research, technical, technological, organizational (managerial), economic, social, educational, mixed. By type, projects can also be divided into innovative and non-innovative.
By project class
The division of projects by their classes provides for the distribution of projects by composition, structure and subject area into:
- monoprojects- these are separate projects of different types, types and scales;
- megaproject- target programs for the development of regions, industries, including a number of mono - and multi - projects;
- modular (complete-block) project- a method for solving project management problems, in which most of the future object is manufactured not at the site of future operation, but on the “side” - in a factory or semi-factory conditions;
- a joint project- several participants (international - several countries, inter-regional, inter-organizational).
By project duration
The division of investment projects according to the duration of the project. However, the characterization of projects on this basis is also not devoid of subjectivity. For different industries, enterprises and organizations in different conditions, the concept of the duration of the term may be different.
The very concept of project duration can have three levels.:
1) the period from the beginning to the end of the investment of funds ("bringing the enterprise to the design capacity");
2) the period from the start of investment to the moment of return on investment;
3) the period for obtaining the economic or social effect (until the end of the functioning of the investment object), i.e. the life cycle of the project.
When assessing the duration of a project, the second level is usually used, highlighting at the same time: a short-term project (up to 3 years); medium-term (3-5 years); long-term (over 5 years).
By the complexity of the project
It is also advisable to subdivide investment projects by complexity of the project - simple, complex, very complex, which is useful, for example, when monitoring projects. Of course, this classification feature is also subjective and can be used to compare projects carried out by one investor or at one investment object.
As of the investment project
Projects also differ in the state of the IPR:
1. An idea in the bud - one idea, no enterprise or leadership.
2. New venture - the venture is ready to start working immediately, there is a management group and a market is defined.
3. An existing enterprise with a developed idea, but the idea is not yet profitable.
4. Expansion of an existing profitable enterprise.
5. Reorganization of an enterprise without a change in management (for example, the takeover of a given enterprise by a large company).
6. Reorganization of the enterprise followed by a change in management.
7. Investing in a loss-making company to turn it into a profitable one.
The possibility of risk in the listed cases is high when investing in the "embryo" (No. 1), and decreases, reaching a minimum when investing in the expansion of a profitable enterprise (No. 4); then it increases sharply during the transition to reorganization with a change in management (No. 6) and again reaches a maximum when investing in a loss-making enterprise (No. 7).
By the scale of investments and the impact of their consequences
It is advisable to classify investment projects also by the scale of investments and the impact of their consequences .
Investment project global scale affects the situation in several countries (first of all, the implementation of large infrastructure, energy projects, etc.).
If the project has an impact on the internal socio-economic, political or environmental situation in a single country, then it can be attributed to large-scale project .
In the case of the spread of influence only on region of a particular country , an investment project can rightfully be called regional .
If the investment project covers a separate branch of the national economy , then it is referred to sectoral .
Investment project limited by limits cities, is, respectively, urban .
Local project does not have a significant impact on the economic, political, social, ecological, demographic situation of the country, region, city (modernization of enterprises).
Based on the result of using the results of scientific and technical developments
Given the fundamental importance of innovation at the present stage, it is proposed to classify projects on the use of the results of scientific and technical developments when implementing an investment project.
According to this classification criterion, projects can be divided into:
1) Traditional (conservative) projects(usually in the field of industry), the purpose of which is to make a profit as a result of organizing or increasing the efficiency of production and sales channels for products (standard or with improved characteristics). Conservative projects are usually associated with the support of some idea in the field of simple reproduction. The result a conservative traditional project is the organization of serial production and sales of products at an existing or new enterprise.
2) Innovative (risky) projects can be aimed at creating new products or technologies that provide high profits; moreover, they are relatively independent, i.e. not "tied" to a specific industrial enterprise. The result a risk project is an organized marketing program, effective sales and high profits.
3) Research projects- are aimed at obtaining scientific and practical results, which can subsequently be used to create new products or technologies, to promote existing ones to the market. This subtype of projects also involves the use of non-traditional technologies (information, computer, production) in various fields.
Research projects can be subdivided according to the degree of innovation and science intensity of the project - into projects with a high share of the innovative component, science-intensive and standard projects (without the use of improvement elements). The purpose a scientific project, unlike others, is not an economic effect, but the creation of conditions for intensive technological development in various fields of science and industry. The results obtained from the work carried out stimulate the process of scientific and technological development or ensure the transition to a higher level of technology.