Direct Investment ُرمایه گذاری مستقیم

Direct Investment

Direct Investment

Direct investment are investments that the investor can control his investments and determine his goal for entering the capital market.

Advantages

1. Liquidity power in direct method is more than liquidity power in indirect method.

2. A sense of self-confidence in making a profit.

Disadvantages

1. The decision to invest is our responsibility. Considering that investing is risky, when we buy and sell without expertise and experience, we face a lot of risk and lose control of our emotions.

2. We need a lot of time to buy and sell. If we do not have enough time to enter the market and cannot manage time for buying and selling, we should not enter the market directly.

Indirect Investment

Indirect investment means that we leave our capital in the hands of trusted people who will buy and sell for our capital.
This method is for people who do not have enough time in the field of education and expertise and do not interfere in the way of buying and selling by entrusting capital to experts.

Direct Investment سرمایه گذاری مستقیم
Direct and Indirect Investment

Indirect Investment Tools

1. Investment Funds

Such funds are one of the indirect investment tools. Investment funds operate in different fields according to the company’s statutes. For example, the funds that invest in gold put 70% of their capital on gold, as the price of gold increases, the value of the units’ increases.

2. Dedicated Portfolio Management

Portfolio management is another way of investment that is done without involvement in buying and selling. Under the supervision of the stock market, the portfolio managers attract capital and buy and sell according to their risk tolerance.
Investment consulting is one of the indirect investment tools. Consulting for investment makes it possible to make the final decision with the help of the advisor’s words.

Direct Investment سرمایه گذاری مستقیم
Portfolio Management

Advantages of Investing in Investment Funds

1. Professional Asset Management

The first advantage of the investment fund is our professional money management. It means that our capital is managed by a professional team familiar with financial issues.

2. Reducing Investment Risk

Forming an asset portfolio as asset diversification reduces investment risk. Investment fund reduces investment risk by diversifying.

3. Information Monitoring and Transparency

Investment funds are reviewed by the three entities of the Securities and Exchange Organization, the trustee and the auditor, and their activities are transparently informed. As a result, we are sure that the fund’s investment and activities are fully monitored.

4. High Liquidity

Investing in the fund allows us to cash out our money very quickly. We do not face any problem to sell our investment units. This is done by the liquidation guarantor, and whenever we decide to liquidate our assets, the guarantor undertakes the task of liquidating the fund’s assets.

5. Economies of Scale

In addition to the fact that investment funds are formed from the pooling of micro capital, they allow us to take advantage of the benefits of large investments for the holders. Due to the large amount of capital of the funds, costs such as analysis and review, valuation and buying and selling are reduced among investors, and it is possible for the investor to save money.

Disadvantages of Investment Funds

It goes without saying that along with the benefits of investment funds, it is better to know what risks these funds have for investment.

The first risk is that the yield on fixed income bonds will change. Funds always allocate a percentage of their capital to fixed income securities. These percentages are different according to the type and nature. If the yield of bonds changes, it can have a significant impact on the yield and yield of investment funds.

The second risk reduces the value of the stocks in the fund. Of course, the amount of shares of each fund is different according to the type and nature of that fund.

Advantages of Using Portfolio Management

One of the major advantages of portfolio management is the use of the professional power of the portfolio manager and the advice of the investment managers team. Portfolio management makes us decide for each person’s portfolio according to the investor’s characteristics. Our property management portfolio is direct. It means that stocks and assets are bought in our name. This problem makes our capital to be managed in a special way.

Disadvantages of Using Portfolio Management

One of the biggest disadvantages of portfolio management is choosing the wrong portfolio manager. If we choose an inappropriate basket maker, it will cause heavy losses for us. Because our capital is directly managed by the portfolio manager and any loss that occurs is from our capital. A non-professional trader can easily put our capital at risk.

Advantages of Indirect Investment

1.It does not require time.

2.It does not require expertise.

3.It is suitable for people with low risk tolerance.

Disadvantages of Indirect Investment

Lower returns in the short term. If we work with the portfolio company, the amount of profit belongs to the portfolio company.

Up to Sum

If we don’t have time to make the right decision for capital, if we want to participate in the stock market, we should use indirect methods. If we have enough time, with the help of proper training and acquiring skills and experience, we can decide for capital.

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