Investment activity is the process of cash flow and changing the form of their storage. They represent investment capital. The latter increases its value as a result of investments in securities by increasing the price of assets and accruing dividends or interest. In order to familiarize yourself with this topic in more detail, it is worthwhile to find out who the subjects and objects of investment activity are. This is quite important for those who are going to start investing.
Definition of a concept
The subjects of investment activity are legal entities and individuals participating in the process under consideration. These include:
- investment funds;
- investors
- Exchange
- markets existing off-exchange;
- banks;
- customers and contractors;
- resource providers;
- Insurance companies.
Subjects of investment activity have rights and obligations that should be known if there is a goal of obtaining income from investments in securities.
Basic rights
Regardless of the category to which investors belong, they have equal rights in carrying out activities of this type. The main ones are the following rights:
- Make your own investment choices. This means that the subject without outside interference can determine the size and direction of investments, as well as participants in this process.
- Exercising control over the targeted use of investment objects, if the investor is not their user.
- The subject has the full right to transfer his rights to other individuals and legal entities through the preparation of the relevant contract.
- The investor has the opportunity to purchase objects that were created as a result of investing. After acquiring property, he can use the results of investments and dispose of them.
It is worth noting that the legislation establishes a list of certain objects in which money can be invested. This entails the automatic acquisition of ownership of them. In this case, the subject will have the right to own them, to dispose of and receive profit from their use. For incomplete investment objects, the legislation defines the regime of shared ownership.
Investment Objects
To create a complete picture of investment activity should consider the objects that relate to it. They may be new and improved fixed and circulating financial assets. Also the objects of this activity are securities, property rights, intellectual and scientific-technical products, targeted cash investments, etc. It is worth noting that the law on investment activity in Russia indicates a list of objects, which is not exhaustive.
It is important to know that there is a statutory ban. It implies the impossibility of investing money in objects that are created and applied contrary to the requirements of sanitary-hygienic and environmental standards. It is also forbidden to invest in products that harm the rights and interests of individuals and legal entities protected by state law.
From the information presented, it can be concluded that the objects of investment activity are both tangible and intangible values.At the same time, their creation and operation comply with the established legislative requirements, do not have a negative impact on citizens, and also bring an investor income or give any other positive effect.
Obligations and responsibility of subjects of investment activity
The legislation defines the following responsibilities of investment entities:
- Perform actions in accordance with federal laws and international treaties of the Russian Federation, as well as the established procedure and legal acts.
- To comply with the requirements that are imposed by the executive authorities and their officials, if they do not contradict the legislative norms.
- Use the funds that are directed to capital deposits, according to their intended purpose.
- The subjects of investment activity should make capital investments on the basis of contracts or agreements, which are drawn up in accordance with the Civil Code.
It is worth noting that the terms of the contract between the subjects of activity will retain their legal force throughout their term. The legislation also provides for exceptions for these cases.
The subjects of investment bear the following responsibility:
- Responsibility in accordance with established laws in case of violation of the terms of contracts and agreements, as well as legislative requirements.
- Conflict situations that occur during the investment process will be resolved in the manner specified by international treaties and legislation.
- Ensuring the protection of capital investments through their insurance.
It is worth noting that capital investments are nationalized only if the state compensates in advance for losses that have been caused to the subjects of investment. They can also be requisitioned in accordance with the decision of state bodies only on those conditions established by the Civil Code of the Russian Federation.
Customers, Performers, and Users
Customers are investment participants with the authority to implement projects. In order to achieve the goals, the investor gives them the rights to own and dispose of deposits on the terms that are previously determined by law. It is worth noting that customers are prohibited from interfering in the activities of other entities in the investment process. At the same time, they can be both individuals and legal entities, and investors.
The main subjects of investment activity also include contractors. They are also endowed with powers that allow them to engage in the implementation of investment projects in accordance with the contract. However, in this case, the customer only issues funds to perform certain work. The Contractor does not have the right to manage deposits.
Users are entities for which investment objects are created in the course of the activity. They can act both individuals and legal entities. Often users are municipalities and the state.
Considering the concept of investment activity, you should know that the law allows the combination of functions of several entities. For example, an investor has the opportunity to independently implement a project, as well as to profit from it.
Characterization of other subjects
Investment funds are companies that collect money for their subsequent investment in the purchase of securities. Their main goal is to accumulate capital of individuals and legal entities. In this way are committed portfolio investment given the high return on assets.
Exchanges are the organizers of trading in the securities market. For this reason, they are considered participants in investment activities.Investors are engaged in the purchase of financial instruments of various types on the stock exchange, which implies the conclusion of purchase and sale transactions. In addition, exchanges serve as a mechanism for regulating the value of securities. They also provide useful information to investment entities. If a person carries out investment activities, forms, subjects and other features should be fully studied.
Off-exchange markets are subsidiary entities. Investors have the opportunity to purchase securities of companies that have not been listed on the exchange. They can be attractive for investing money. It is worth noting that the exchange provides for payment of services to ensure guarantees for settlements or delivery of products. OTC markets offer only contractual relationships that investment entities have. The investor independently executes the conclusion of the purchase and sale transaction on the basis of the current contract.
Insurance companies are also participants in investment activities, but perform other functions. They act as guarantors for investors to receive compensation in cases where they have suffered losses in unforeseen situations. This may be nationalization of the currency, expropriation, or a coup d'etat. In addition, insurance companies provide loans to private investors. They advise them on the issue of investing funds, as well as the political and economic stability of a particular state.
Private investors
The concept of a private investor is unusual for Russian citizens. This is due to the fact that most of them have ordinary jobs and do not try to invest in funds. For this reason, you should familiarize yourself with this concept in more detail.
A private investor is a person or company that makes risky investments in order to make a profit. If the selected project is unprofitable, the funds will be partially or completely lost.
It is worth noting that in Russia there is a classification of private investors, which was introduced by the FSFM. Among them, the category of qualified investors is distinguished. They differ from other entities, as they have the right to invest in a separate type of financial instrument. In addition, there are institutional investors.
Difficulties on the path of the investor
Becoming a private investor is not so easy. This is primarily due to the fact that it is difficult for beginners to understand how to properly invest funds. Many of them do not understand that money can be earned in a different way than to work daily. However, investing can make a person financially independent and wealthy. This process at first glance seems incomprehensible and complex. But if you understand it, you can understand that this is not so.
After reading the proposed material, the reader gained some knowledge, but this is not enough. You should find out what types of investment activities exist, their features and implementation procedures. There are many inaccurate information and myths that should be circumvented in the process of studying the topic.
How to become a private investor?
Having determined who the subjects and objects of investment activity are, it is worth learning how to become a private investor. Most people believe that this requires a lot of capital. Therefore, if it is not there, it is unrealistic to invest in funds. Such an opinion is a misconception.
A large number of types of investments allow you to make small investments. For this, you can use bank deposits, which requires the investment of any, even a small amount. You should also make regular reinvestments that will increase your capital.
It is worth noting that private investor can carry out several activities simultaneously. For this reason, there is no need to leave work and devote all time to making contributions. It is worth switching to passive income if the income from investments will significantly exceed the amount of wages. In addition, a novice investor does not need to have a special education.
The main tasks of a private investor
Investment entities under consideration face risks when investing capital. For this reason, they should perform the following tasks:
- pre-develop investment strategies and tactics;
- create a portfolio of investments to diversify risks;
- comply with management rules for risk management;
- exercise constant control over investments.
Each of the tasks is worthy of separate consideration, even if government investments or low-risk deposits are made. Performing all of them, you can achieve positive results. It is also worth noting that a novice investor must be financially educated.
Today it is quite difficult to become an investor. This is due to the instability of the political and economic situation in the country. In addition, legislation is regularly changing, and not always in favor of entrepreneurs and investors. Starting a business in such conditions is also risky. Investors often make mistakes and lose. They must be taken as experience, which will allow us to conclude. Even in the practice of world famous investors, there were mistakes. This was not an obstacle to success.
Private investment in comparison with other types of earnings is a more promising activity. This is due to the fact that they provide individuals and legal entities with unlimited opportunities. It is worth deciding on an investment and becoming financially independent.
