High yield investing has taken on a fully novel dimension since the introduction of the internet and the basic own PC. Stylish the United States, a area of high pressure yield savings account is considered to be something on top of 5% monthly. Of curse as the old wise saying goes, the upper the yield the bigger the possibility. This is confirmed. You can not expect to earn more than an mode percentage rate with a lesser amount of possibility. It emphatically doesn’t meet substance.

When discussing area of high pressure yield gain accounts, are we chatting roughly speaking a savings savings account to produces a 5.4% twelve-monthly percentage return? Well, fair enough. And refusal. It depends on who you are and could you repeat that? You consider to be possibilities and realistic.

By instantly a good number of us suffer heard roughly speaking investment programs to privilege to be able to generate ridiculously area of high pressure returns. Traditional investors cringes while they hear vocabulary like 25% apiece month on behalf of solitary day plus the return of tenet, and they practically quiver while they hear claims of 300% in eight weeks. Certainly these area of high pressure yield investment programs have got to be scams. How can it be achievable to generate such returns in such a abruptly amount of measure? And why isn’t every person impossible present liability this if it can really go off? If these area of high pressure yield nest egg sustain in the least irrigate it follows that in emphatically five abruptly years we may perhaps wipe impossible poverty and homelessness and refusal teen would interminably move to bed hungry or sick again!

Are High Yield Investments Scams?

Believe it or not this question is not a undemanding fair enough or refusal response. It can’t be. The abruptly and safe answer would be fair enough, they are scams. However, it is of the essence to understand could you repeat that? They are and why they suffer not all been shut up shop down by the government if they are nothing more than a way to slink your money.

High yield investment programs are not a place to try to earn an salary. They are particularly unstable and unpredictable. People can and work out meet money from them, and at times it’s a considerable amount of money. But don’t acquire excited and start rushing impossible to re-mortgage your stock emphatically yet.

Read all single disclaimer on a area of high pressure yield investment code website and they will all say the exact same object. High yield investing comes with the possibility of trailing money. Never invest more than you can survive to lose. Why? Because all area of high pressure yield investment code will eventually powder and folks with money invested are disappearing to lose.

High yield investment programs are based on ethics alike to having a bet. While a good number of work out not, present are colonize in the the human race who meet their living roaming around to casinos and having a bet. Is it a scam? No. Stylish truth a good number of us next to slightest respect the truth to the character is competent as much as necessary next to live nightclub games to they can earn a living next to it no matter what of how we feel roughly speaking having a bet ourselves. The same applies to earning a living from area of high pressure yield investment programs. Most investors work out not even consider them real nest egg and poke fun at next to folks who attempt to earn a living through area of high pressure yield investing.

Most colonize who are able to sponsor their lifestyle and earn a living through area of high pressure yield investment programs happening in using solitary of two methods. They either jumped in with both feet next to the primary code to sounded profit to them and lost everything they invested or they researched area of high pressure yield investment programs until their fingers went dull earlier interminably investing a dime. Either way, both parties came to the conclusion to to roll up impossible early in area of high pressure yield nest egg programs they would suffer to work out ample inquiries and completely understand the procedure and ethics earlier they were disappearing to succeed.

Earning a living through area of high pressure yield investment programs takes a procedure to is undemanding to realize and monitor to prevent untimely last and robust losses. This procedure takes a portion of due diligence and of pour, certain very specialized education roughly speaking forex trading and even having a bet.

Reading the website’s method of investment can tell the mode area of high pressure yield investor a portion roughly speaking the security, or lack thereof, on behalf of in the least finicky code. Most will admit to trading in forex, which in the least mode investor can work out with a little education and inquiries. Some will tell you to they are trading in freight as well and certain admit to they are in addition having a bet with the investors’ money, accurately. Any website to says they are having a bet using fool corroboration methods of winning ought to no question be avoided next to all expenses. There is refusal fool corroboration method of having a bet.

High yield investing is probably something to be avoided altogether, although to is an character pick lone an character investor can meet. However, if you desire to acquire involved with a area of high pressure yield investment code and you unfastened your money, to was your pick as well. Just like it is achievable to unfastened money in the stockpile souk, you are likely to unfastened money in area of high pressure yield nest egg. An investor to looses money in the stockpile souk doesn’t typically store a court case adjacent to the insurance broker, so why are colonize so quick to store lawsuits and complaints while they unfastened money in area of high pressure yield investment programs?

The answer is objectionable but on behalf of the a good number part it is confirmed. Greed. We can assume to present are poor nest egg impossible present and ought to we unfastened three or four thousand dollars in a bad investment we assume it as part of the impending outcome of investing. Yet for the reason that we got excited and our minds happening expenses the money we were hopeful to date through a area of high pressure yield investment instantly suddenly the colonize who run these programs are thieves. High yield nest egg are nest egg even if they work out border on scams and you run the possibility of trailing your money. Remember the basic tenet of in the least investment? The upper the return the more likely you are to lose your money.

High yield nest egg are incredibly risky and certain of them are essentially scams. Scam artists are all over and if present are colonize in the the human race who are willing to fork on top of thousands of dollars in the unrealistic hope to they can spin it into ten of thousands of dollars in a relatively abruptly point of measure it follows that present will be colonize who are willing to slink to money from impending investors.

People are willing to donate their money to in the least valuable cause, so present are colonize who are willing to ready up pretender charities to slink donations from giving colonize. That certainly doesn’t meet all charity a scam and colonize aren’t disappearing to be over donating to charities of their pick. Just as present are folks who will take lead of people’s kindness and appeal to give away to charities, present are folks who are interested in scamming money from colonize who are annoying to get better their pecuniary portfolio through area of high pressure yield investment programs. That doesn’t mean all single area of high pressure yield investment code is a scam.

The solitary object all area of high pressure yield investment programs work out suffer in usual is to earlier or afterward they will all fold, even folks to start impossible being profitable. Just for the reason that a area of high pressure yield investment code starts sour producing the returns to it projected in the creation doesn’t mean to it will keep on to work out so on top of a long point of measure. This is how the area of high pressure yield investor gets dramatically burned. One or two programs to delivers on behalf of a point of measure doesn’t mean it’s measure to give up the job and allot all the vacant property to area of high pressure yield investing. It funds to solitary or two programs are liability well. They will not work out well forever and earlier or afterward they will powder. That is the nature of area of high pressure yield investing.

High Yield versus Conservative Investing

Which investment strategy is entirely on behalf of you? Only an character investor can answer to question on behalf of their own interests. Some colonize can tolerate the considerable possibility factors while others wish the stability of the more conservative and typical methods of investing. Some colonize are more willing to take a put money on than others, and by all funds area of high pressure yield investing is a form of having a bet.

There are dramatically fewer scams in typical investing. Some colonize will constantly believe to area of high pressure yield investing is a scam and present is nothing to will encourage them otherwise. Just for the reason that certain colonize are able to be triumphant doesn’t mean to a code is not a scam. And emphatically for the reason that something is a scam doesn’t mean to certain money can’t be made anyway. Does it meet it entirely or real or valuable? Again this is something to every one character investor needs to determine on behalf of themselves.

Be wise,think GREEN,invest in renewable & sustainable resources and save our planet!!!

Would you like 93,5% returns on your capital invested paid directly into your bank account in USD’s every 5 years?

If you purchase a 1 ha plot, your capital and 18,7% returns per annum are guaranteed as your money and title deed are managed in a FSA regulated trust fund, Citadel Trustees Limited in the UK. If you purchase a 2000 m2 plot your capital and 17,1% returns per annum are guaranteed.

Alternative Investments,Green Investments & Timber Investments with guaranteed returns are excellent low risk opportunities in sustainable
& renewable resources with massive environmental & humanitarian benefits in the current volatile world economy!!!

Silva Tree is a fully incorporated Central American company specializing in environmental development. Our Directors have 17 years
of forestry experience as well as strong business and financial backgrounds. The Silva Tree group currently has offices in Costa Rica,
Panama, Spain and the United Kingdom and are involved in programs dealing with conservation, reforestation and renewable energy.

Silva Tree design and develop environmental projects around the world, working with a team of lawyers, accountants and trustees to create a
safe and practical investment structure for each ethical investment opportunity offered. By selling small parts of our own projects, Silva
Tree facilitate greater environmental benefits than we would achieve on our own, as well as offering ethical, safe and diverse investment
products with unrivaled returns. .

Our funds are operated by an Citadel Trustees Limited, an FSA-
regulated trustee and offer highly regulated investments with
excellent returns.

Citadel Trustees Limited

Citadel’s highly experienced team has been providing trustee and stakeholder services to the leisure and real estate industries for
more than 25 years, handling in excess of £65 million/0 million of client funds annually.

Citadel Trustees Limited, was formed to provide specialized trustee services in a variety of areas such as stakeholder activities,
conveyancing services, shared ownership, private residence clubs and probate administration.

Citadel’s Head Office is based in Camberley, Surrey, United Kingdom and the company has branch offices, or associated companies in Spain,
India, Thailand and China from which it services its international client base.

Princess Project

The Princess Project is a pioneering reforestation venture in central Panama. 1,500 hectares of land, currently used for cattle grazing, are
being reforested with the fast growing tree Paulownia Elongata (also known as Princess Tree or Empress Tree). Paulownia is a fascinating
species; believed to be the fastest growing hardwood in the world, it can be harvested 4-5 times in the space of just one Teak harvest and
it provides an array of environmental benefits, from soil regeneration to an extraordinary rate of carbon dioxide uptake.

The Princess Project is a commercial timber plantation which is also being developed as a Carbon Offset Project, following CDM guidelines
developed for the Kyoto Protocol and verified to meet VCS and CCB standards, with environmental and socioeconomic benefits at the core
of the project. The trees will be harvested after their fifth year of growth and sold as a sustainable timber product. New trees will
regenerate from the roots to create three more cycles of growth and harvest over the 20 year project term. The investment opportunity is

based on the sale of the project’s timber to a commercial wood trader.

Timber Investment

All Silva Tree investment opportunities are genuine environmental projects that happen to be open to investment, not the other way
around. We develop programs that we believe are important, and expand them by offering private individuals to participate. We make our money
the same way you do; from our projects’ yields.

After oil, timber is the most intensively traded raw material in the world. The (FAO) expects that this demand will experience a further
rise of 50%. The present supply of hardwoods from managed plantations cannot meet this need.

In the current property and financial climate, sustainable forestry projects offer a low-risk investment opportunity with additional
environmental benefits. The Princess project is the only timber investment to offer guaranteed returns* payable in just 5 short years.

The Princess Tree, officially known as Paulownia, is recognized as the fastest growing hardwood in the world. The timber it produces is
durable and strong, lightweight and fire resistant. Unlike other Tropical timbers, the demand for Paulownia is not being met by
abundance of plantations and, as a carbon reducing facility; it absorbs more CO2 than any other Tropical plantation tree. The world
market price, supply and demand, speed of growth and quick return on investment make Paulownia an ideal commercial plantation tree.
Moreover, a buyer for the timber has already been found with an insured purchase guarantee in place, ensuring your investment return
is completely guaranteed.

Private investors are invited to join in this project by purchasing individual plots of land providing net returns of 18.7% per annum over a total investment period of twenty years (applicable to investments made before the 1st January 2010). Not just an exceptional financial
investment, buyers can enjoy a variety of tax breaks, assurance of security and enjoy the environmental benefits and community
initiatives facilitated by the project.

Key points

Low investment amount from just ,000 USD per unit
Gross return of 5,200 USD over 20 years Guaranteed returns of 18.7% p.a. for 20 years Returns paid every 5 years
Tax advantages
SIPP qualified
CO2 climate change mitigation
Benefits to local communities
Land held in trust
Timber buyer with insured guarantee
Based on introductory purchase price of 35,000 USD applicable to all purchases made before 30.06.2010.

Investment returns

The investor will receive 660 trees per hectare of land purchased
A lease will be registered in his/her name for 21 years, which will produce 4 timber harvests
A purchase price of USD 275 per m3 of timber is guaranteed by World
Paulownia LLC, if the investor wishes to take this option
A 5-year old Paulownia tree produces at least 0.2m3 of processed wood
The total m3 produced per plot over the 4 harvests is 528 m3 Based on a ,000 USD investment (available until Jul 2010), this will provide a return of  5,200 USD per plot
The harvesting, processing and transportation will be carried out by a management company of your choice (unless you wish to organise it
yourself) which is likely to charge 10% of the value of your timber sales This produces a net return of 18.7% per annum over 20 years, after the initial investment amount has been deducted

Community projects

In order to qualify for high quality Carbon offset credits, our project has to deliver a wide array of socioeconomic benefits. The
Princess Project is designed according to the CCB Standard with emphasis on reducing poverty in developing countries.

Aside from the community projects regularly organized by Silva Tree such as the sponsorship of local schools and providing research
opportunities to educational institutions, the Princess Project itself will benefit local communities. Local staff will be employed to work the land belonging to Silva Tree, and farmers will be invited to inter plant crops on the project land. This will give people the
opportunity to grow food for themselves and their families, or sell their produce to generate an income for themselves.

Minimum Investment: 000.00 USD/Approximately £22,682.25 GBP/
Approximately R260,255.11 ZAR (Depending on Currency Rate) For 1 ha Plots

Special Offer Now Available For a Limited Time Only…

Upon client request, Silva Tree have reduced their minimum investment amount from 000.00 USD to just ,500 USD/ Approximately £4,995 GBP/
Approximately R54,385.79 ZAR for a limited time only. This is a unique opportunity to invest in the Princess Project Panama at a lower level,
ensuring that everyone has an opportunity to take part in this ethical timber investment.

Starting in the summer of 2010(Winter in South Africa), Silva Tree have created a unique investment opportunity with land units for sale
at less than 5000 Pounds (depending on exchange rates). For less than a quarter of the normal minimum investment amount, you can now take
part in the Princess Project Panama, an ethical timber investment using Paulownia for reforestation.

Just 7,500$ US will buy you 2,000 m2 of land with 132 trees for a 20 year investment term. The trees will be harvested every 5 years and
returns distributed to you by Citadel Trustees Ltd., who also hold the entire project in trust. The decision to reduce the minimum
participation amount came from Silva Tree’s experience with many individuals who wish to invest in the project but do not possess
sufficient funds to participate, particularly via SIPPs and pensions.

To ensure that previous investors as well as those who are investing at the higher level of 35,000$ US are not at a disadvantage because of
this development, the returns achieved by the higher investment amount are also higher. This means that everyone is able to participate in
the project but investors at a higher level are rewarded.

If you are interested in this guaranteed,risk free and stable investment opportunity please contact me ASAP to reserve your plot of
timber forest as eager investors are snapping up this great opportunity.

Best regards,

Mark Waite
Investment Advisor
Omega Land Investments
T/A Sovereign Land

Tel: +27 87 943 4754

Mobile: +27 74 116 5213

mailto: mark.waite@incomeforlife.co.za

Alt email: mjw0710@vodamail.co.za

For more information about this opportunity & other excellent
investment opportunities please visit….

http://www.incomeforlife.co.za

“Diwali” (Deepavali) will be celebrated in India on the 5th November 2010 (Vikram Samvat 2067). The day of Diwali is auspicious for every Hindu but it is more important for business and business community. People take various investment decisions on this day. The attempt of this article is to help investors take informed investment decisions based on their Moon signs.

Aries:

Arians should avoid taking rash decisions concerning investment. Speculation should be avoided generally. Property investment may give positive results. Special care should be taken before entering into any contract and signing any document. Some Arians may gain from abroad. Investment in shares of good companies may also be considered.

Taurus:

Natives of Taurus should exercise extreme caution while investing in property. It may be advisable to go through the history of land or builder before taking any investment decision. There may be gains from stocks if investors go by fundamentals. Greed should be avoided and investment should be made on sound analysis. Ideal investment may be government bonds, IPO’s and mutual funds. Risk free investment is better option.

Gemini:

The Gemini people may invest in property for long-term for real gains. If the idea is to gain quickly, this may become a cause for loss. The natives are advised to remain careful while taking loans. They may fall into some kind of debt trap if prudence is not exercised in managing debts and investments. The focus of investment should be on the shares of good companies. Investment in gold may also payoff in the long run.

Cancer:

Speculative gain is possible from stock market if it is done with caution. Investment should be made on good companies. Care is necessary for investment in property. It is not wise to be overambitious with respect to future price rise of property. Shares or mutual funds may be good option. Gossip and hearsay should be avoided while taking investment decision. Investment in business may also prove to be a good option.

Leo:

Goddess of fortune seems to be kind this year to Leos. Possibility of gain exists in shares, stocks, property and the like. The stars of fortune are smiling and if such fortune is backed by intelligent plans and investment, good money can be made. However, it will be necessary to control nerves and be watchful. Some calculated risks can be taken for extra advantage.

Virgo:

If investment has been made in property, the projects may get delayed. Caution should be taken while making new investment in property. Read the agreements before signing them to find the finer points. Informed investment in stock market, fixed deposits, government bonds and interest bearing securities are better options. In short, it is important to minimize risks.

Libra:

Librans should be extra careful while investing in property. Gains can however be made in commodities market and share market. Planned investment will be better than speculation. Investment in gold may also be done for long-term gains. For investment of any kind, a proper survey of the situation will be beneficial. Possibility of gains from foreign source also exists.

Scorpio:

The time is very good for those who are planning to buy property for personal use. Gains from old property or ancestral property are indicated. Share investment may also give good returns. Stars are favorable with respect to investment right now. However, some calculated risks may be necessary to convert the advantage into material gains. Investment in gold and ornaments can be made for risk free investment.

Sagittarius:

Extreme caution should be exercised in taking investment decisions. It is better to make efforts for maximizing earnings. Invest the hard-earned money in safe instruments like Government bonds, securities, insurance and mutual funds. It is better to avoid speculative investment. Property investment should also be done with due prudence. It is better to seek expert opinion regarding projects in which investment is to be done.

Capricorn:

Time is good for several types of investment. Money can be made from almost every investment, but, investment should not be done with a blind eye. Caution should be exercised with respect to property investments. Delay in delivery of projects may become a matter of concern. There may be some issues with respect to financial liquidity as well. Unnecessary expenses need to be curbed.

Aquarius:

Money can be made from stock market. Speculation and short-term investment may also payoff well. However, informed investment is advisable. Investment in property may also give good returns. Gains from abroad are also indicated. Stars are favorable right now and prudent investments may become rewarding. Yet, caution is advisable while signing contracts and in finalizing deals for long-term.

Pisces:

There may be some career-related issues for natives. Such issues can be overcome with sustained and intelligent efforts. Risky decisions with respect to career and property investment should be avoided. It is better to avoid speculation. Investment in government bonds, securities and fixed deposits may be good investment instruments. Investment in gold can also be made.

Buying stocks without a broker is a simple process done by going through the company’s Web site and signing up for an account online. Purchase stocks or a dividend reinvestment plan with insight from anexperienced financial specialist in this free video on investing. Expert: Phillip Beningoso Contact: www.wearehdtv.com Bio: Phillip Beningoso has a bachelor’s of arts degree with a major in finance and a minor in economics and computer sciences from Kent State University. Filmmaker: Christopher Rokosz
Video Rating: 0 / 5

Related Investing Articles

Author speech:

This article explicated the analysis of business decisions as economic cost & benefit. If you find the costs and benefits from the investment- You must be clearly defined criteria to be used for evaluation against the investment proposal. The criteria for making an investment analysis of dealing benefits and costs of an investment proposal, these benefits and costs in most cases do not take place directly, but these are variable so that can be generated for changeable periods.Forex

On the basis of my experience, observed, & analysis, this article I have paid attention mainly on the economic benefits achieved from investing in and operating a business. In this article, I have struggled to expose in more specific terms with the economic costs associated by way of business decisions.

Throughout  the article I have tried talk about in greater details-the cost of various types of capital employed in a business, examine how this cost is measured, and in what form and for which purposes this economic reality should affect business decision making.

Introduction:

Investment policies have given a new viewpoint to the part of financial administration, Generally, I found that a few people knows the good investment policy and when those people apply their knowledgeable strategy with the investment usually they gain,, it is highly unlikely that without the appropriate knowledge of investment policy a few people try to run a business with a huge amount, but unfortunately most of these investors turn around from this business with huge losses. all decisions involving to business investment from the analysis of investment in running capital such as cash, banks, accounts receivable, inventory and investment capital represented in fixed assets such as buildings, land, machinery, technology etc. to make the right decisions the financier has to take into account elements of evaluation and analysis as the criteria for analysis,

meaning the analysis of investment:

In most types of organizations or private companies, financial decisions are focused or have a clear objective, “the maximization of assets by the utilities, this fact in the present conditions, must refocus on a” maximizing wealth and the creation of “business value”. Against this background in investment resources are allocated and results obtained from them,

Meaning the analysis of Operating decision:

Operating decisions that involve routine responsibilities. Such as planning production and sales, scheduling personnel and equipment, adjusting production rates, and controlling the production Quality

Decisional framework:

The decisional framework I have discussed all along strained the interrelationship of investment, operations, and financing. In my experience observed that, over time, most management decisions cause cash movements in one form or another.

The dynamics of the business system require that funds be available at any time temporarily or permanently from a variety of sources, provided internally or externally. Key internal sources are cash flows from profitable operations or shifts in existing funds commitments.

Type of external sources are borrowing or raising new equity. Because the basic purpose of investing in, operating, and financing a business is to raise the economic value of the owners’ bet over time, management decisions should form economic value for the shareholders by generating after-tax results that are higher than the cost of all the supporting capital inputs.

Investment Decisions

One of the most vital long phrase decisions for any business relates to investment. Investment is the Obtain or making of assets with the purpose of make gains in the future. naturally investment engaged by financial wealth to buy a machine/ building or other asset, which will then give up returns to an organization over a period of time

I think the first thing is to identify what you want. You must know what the business prospect means for you and what you want to achieve out of your investment. It is generally a good plan to have a pre-planned profit level that acts as an object for your investment work. The good investor will also take time to recognize the market that they are trying to pierce. Do not just rely on information or suggestions from the people. You will need to go and see the accurate operation of the business so that you can review whether you are likely to be winning. The past of business investment is beset with stories of people who jumped against schemes they did not know and ended up paying a very heavy price

Following Solution of considerations in making investment decisions are:

1. What is the scale of the investment – can the company afford it?

2. How long will it be before the investment starts to yield returns?

3. How long will it take to pay back the investment?

4. What are the expected profits from the investment?

A good investor will always look for to administer and shelter their investment. If you just put an investment project and hope for the best, you are on a smooth slope to financial ruin. You will need to pay steady attention to what is happening to your business by requesting for management information and evidence of growth. That way smoothly if there are problems you will know about them and formulate a corrective strategy.

As well established that least standards for investments had to be set high sufficient to pay costs both for the projects exact risk and for the chance loss of forgoing the returns from any substitute uses of the funds invested. Such alternative investments in the company’s normal tricks or in new initiatives were equally assumed to sufficiently reimburse both shareholders and lenders for providing their capital.

Cash flows connected with investment:

When creation an investment the company expects a number of fixed cost and production costs for a positive number of future benefits, these invention costs and profit is called “Cash Flow”, this components are importance for investment decision

I recommended that the company’s generally cost of capital, when used as a minimum standard for the economic attractiveness of investments, totally in person all of these requirements, and value would be created if a project’s cash flow performance exceeded the company’s cost of Capital. The analytical methods directly include any financing costs; rather, the cash outflows and inflows as defined represented only investment outlays on the one hand,

Rate of return required for investment decision:

The required rate of return is the minimum rate of return that is necessary for an investment that will be established. In formative this rate must take into account all internal and external factors that influence the investment decision.

My statement in financial theory which states that “investors are risk-aversive” takes great implication in the logic that, as there is more risk involved in the decision to invest in a project will require a higher give up wealth invested. Thus, the expected return for an investment project depends on the exact project risk assessment, taking into account the risk free rate and to invest in this project. The aspects discussed  effective tool in achieving the proper financial management in the decision to rent business investment, but all this must be verified and supplemented by technical studies, math and controls executed  by the monitoring accountable for the financial area of the company.

The rules of a good investor are not rocket science. Everyone can achieve some level of success if they take the time to go over their investment opportunities and make the most logical business decisions best on the information available and their own knowledge. Common sense does help as well, especially if you are dealing with people.

Operating Decisions:

Role of Operating Level of Management: The top level management divides about finance production, marketing, rules and system for employees, process and working methods. The middle level management collects necessary wealth and services for their execution and bottom level management implements the rules process, methods and programme shaped by the top level management. This type of execution is associated with the industrial regulation, continuity of activities and most usage of resources. Middle level office supervisors and bottom level jobbers, foremen and workers are connected with this work.

Decisions are being implemented at bottom level and for its efficiency the management’s method has to be followed. It includes following of working method and working process. Due to the process and methods, the work of coordination between the activities becomes effective and an effective control which can be put on all types of works. In short for the decisions of efficiency, the administrative process becomes an important part.

The time prospect for operating decisions is generally shorter than that of the typical business investment. however, operational funds movements, such as increases or decreases in trade credit both used and extended and swings in cash balances and accruals as described in do involve costs, both in the form of out-of-pocket charges and opportunity costs. For case, a near-term decision to take pay for discounts might involve significant economic benefits when weighed against the cost of any incremental borrowing essential to take advantage of the discount. Cash management decisions to minimize bank balances can eliminate the opportunity costs inherent in idle funds. In fact, there are myriad circumstances in which near-term decisions can cause or eliminate the cost of employing funds, as these decisions are often directly linked to incremental sources that entail specific costs.

Effective decisions are being full by keeping the present activities in mind and their main aim is to accomplish the present objectives. These decisions are taken for the getting of positive results by fulfilling the departmental objectives. For this the departmental employees are given training according to their activities and an effecting level’s personnel is given essential powers for the same cases,

Above I have tried to expose the costs associated with obtaining financing and compensating providers of different sources of funds, both short-term and long-term, which must be considered by management in making any financing decision. Obviously, using any type of funds entails an economic cost to the company in one form or another. One of management’s obligations is to expand a pattern of funding that both matches the risk/reward profile of the business and is suitably modified to meeting the evolving needs of the company. At the same time, the use of long-term funds entails meeting the prospect of creditors, and meeting or if possible exceeding the potential of the providers of equity funds, the company’s shareholders.

Conclusion: The operative decisions are different in nature in comparison with to strategic decisions. Mostly they possess a special importance for achieving the short term motives in framework to the internal situation of a business component

Find More Investing Articles

Dynamism of the requests and distributions appear to be common currents for developing investment market, under the conditions of free competition. Possibility of realizing these currents din real economical reality depends on the quality of the market monopolization. Under the conditions of reducing competition, when the elements of the market essentially lose their flexibility, it appears on the face of tendencies.

Analyzing of the discussed currents means appearing forming and consisting mechanisms of balance at the investment market and also action of the factors conditioning changing of the investment requests and distributions.

Factors of the investment requests. Leaning upon wide theoretical and practical researches provided in the western countries we may conclude, that the investment request is characterized by frequent changing and it is formed by numbers of complexes of factors, among which we may separate macro- and microeconomic ones.

An important macroeconomic showing influencing upon the investment requests is the volume of national production. It gives rise to the growth or reduction of the investment requests under other equal conditions. Changing of accumulations of people and cash resources also work in this direction. Herewith, not absolute sizes of these showing, but their conformed meanings: the equality among accumulation and usage within the bounds of the used national product are of conclusive importance.

It is known, that in the market economy they consider savings to be the part of income not used for needs. They are sources for the investment resources. The size of the real resources, which are in the economy at every concrete stage of its development, depends on the fact what priorities make basement to the distribution of the production – current usage or accumulation.

Changing of the norm of savings and investments. Changing of the norm of savings influences essentially upon those ones, which are in progress in the structure of social product. Reducing norms of savings gives rise to the growth of usage and reduction of the investment level. That is the reason for capital exclusion overcomes investments. This ruins balance in the economy. Reduction of savings is also followed by the reduction of the volumes of production, investments and usage. Recovering of other balances on other technological level takes place.

Increasing norm of aid gives rise to another script of economical development, which is characterized by degradation of the usage level and growth of the investment one. Increasing investments gives rise to the accumulation of a capital in the industry after some discussion. The level of accumulation and investments are being increased until achieving optimal meaning from the point of economical firmness. This provides higher level of usage with the help of increasing the volume of savings.

As the experience of the developed countries shows, that they used to achieve high level of average live-stock income when they used to direct important part of social incomes towards savings while realizing structural transformation. There is quite firm positive relation between the share of final product used for investments and that of average live-stock income.

Distribution of incomes of people among savings and usage provides analogue influence upon dynamics of the investment. A well-known statement of J. M. Kains about increasing savings together with increasing received income hasn’t been proved by statistic researches provided in this sphere. Conclusion about absolute size during usage and distribution of incomes on savings are shown in the works of J. Duisenberg and F. Modillion.Growth of investments is achieved while increasing share of savings in incomes. Herewith, the role of savings, as investment resource depends greatly upon the influence of such factors, as “increasing preference of cash, development (insurance, social insurance) of those institutional savings, basic part of which are not under the disposal of enterprises interested in capital”.

Factors influencing upon the investment requests. The expected rate of inflation influences upon the investment requests. From the most common point of view, fastening inflation rates devaluate those incomes, receiving of which are expected from the investments. Inflations also influences negatively upon the volume of investments with numbers of directions, in the way of impeding economical growth in the long-termed aspects, with the help of reducing processes of widening accumulation and production, devaluating industrial funds of every functional form, inflation tax of profit, also by outflow of cash resources to the sphere of circulation from that of production, reducing real profit and savings, by decreasing the capacity of native market and others. That’s why, growth of inflation rates and inflation expectation hinter activation of investment activities and looses the stimuli of widening investments.

Formation of the investment request under the conditions of market economy is related with the functioning of financial market, which supports the movement of investment capital and also profit made out of the invested assets.

Financial credit system forms basic capital of the investment requests by accumulating separate investment savings. In such case important role is played by the banks, which may use not only savings, but also cash resources being in circulation and emission. Conjuncture of stock and credit markets defines conditions of the investment placements and influences upon the volume of the investments. With the help of incomes made out of investments, which turn into the dividends and percents at the financial market, further production of potential investment request, which is realized in the way of reinvestment, takes place.

Percentage rate and investments. State taxation and percentage policies influence essentially upon the dynamics of investments. Their regulation appears to be the lever of the state reaction at the investment request. Reduction of the profit taxation under the equal conditions gives rise to the growth of the share of accumulation used for investments.

Loan percentage rate defines the value of the loan resources for the investments. Growth of the percentage rate strengthens motivation of savings and at the same time reduces and makes the investment unprofitable. While falling of the loan percent, investments appear to be more profitable, that’s why reduction of loan percentages rate gives rise to the growth of investment and on the contrary. Herewith, the fall of percentage rate, as a factor of activating investments, has its own borders, as at the definite stage of this fall economical agents prefer to save money in more liquid cash form (J. M. Kain’s the Theory of Liquidity), and thus they widen outflow of resources to the sphere of security speculation. This provokes a problem of optimal definition of the percentage rate under the given period, as an excessive fall or growth of percentage rate gives rise to the loss for the investment activities. Thus, the influence of percentage rate upon the investment requests is not completely similar.

Norms of profit and investments. Definition of the influence of percentage rate upon the investment requests might not be complete without comparing it with the norms of the expected profit. Herewith, it’s is to be noticed, that not nominal, but real rate of the percentage rate plays essential role for making investment conclusions, as the factor of inflation spoils real orienteer. While comparing loan percentage rate with the norms of profit it is possible to receive undesirable results.

It is to be remarked, that the profit plays double role in the investment activity. It may be discussed as an investment sources and, at the same time main goal of investing. Modern researches, which are related with the salvation of difficult problems of mathematical formalizing of the level and dynamics of the investment request, also manifesting definite basic parameters of the investment requests, prove the existence of definite relation between the profit and investments. For example, according to thw analyzing provided by the economical consulting counsel under the USA president, the most important macroeconomic factors influencing upon the dynamics of investments are:

-      Net profit and depreciation assignments calculated towards gross domestic product;

-      The norm of profit towards depreciation assets (calculated by conforming total profit to the depreciation assignment and foresee changing of the paid loan percent with the size of the depreciation assets by the current restoration prices);

-      Profit norm at the share capital by calculation (calculated with conforming net profit to the waste restoration value of basic capital with the current prices);

-      Market price of the emitted shares towards restoration value of the assets (calculated by conforming total share capital to the waste restoration price of the assets with the current prices).

Investment functions and profit. Foreign researchers obtained definite investment functions by depending on the problems of analyzing, where one of the leading parameters of the investment changing are net profit, the dynamics of the profit norm or expected size of the profit. Investment functions may be represented in the following way:

Investment functions (6.1) and (6.2) characterize dependence of net investments to the volume of the ones of earlier period, accumulated basic capital and the size of net profit. According to the research goals, it is possible to fill them and leading such data into the consistence of parameters, as percentage rate at the long-termed loans of the banks.

In the investment functions (6.1) and (6.2) a special place is occupied by the parameter of basic capital accumulated in the economy, which are leaded into the investment equations of negative relations. It expresses the processes of accumulation and surplus accumulation of a capital during the economical cycle and their relations with the dynamics of the profit norm. This mechanism is expressed in the following: growth of the profit norm activates investment request and the growth of net investments that, in its turn, fastens the process of increasing basic capital. The growth of basic capital after the termed structure starts influencing in direction of overcoming profit norm that, in its turn, reduces investments and thus decelerates increasing rates of the basic capital. This reduction leads further separate growth of the profit norm in the economy that gives rise to the development of the following cycle. Thus the mechanism of investments in the capital provides generating of working conjuncture cycle and it makes one of the mechanisms of positive loopback.

Investment function (6.3) shows the model of investments, which begins from the size of the expected profit. They use data of stock-exchange quotation of the share rate of the companies for measuring expected profit. It makes current valuation of the future flow of the corresponding company incomes on the basis of stock-exchange data of securities. The difficulty of consisting aggregated data of stock-exchange quotation of the company shares gives conditions quite narrow sphere of using the given investment function – on the level of separate firms.

The norm of expected profit belongs to those factors, which influence upon investment request on the microeconomic level. We must also ascribe expenses of realizing investments, expectations, changing in technology and others to it.

Norm of the expected net profit is of significant importance in the system of microeconomic factors. This is conditioned by the fact, that exactly profit makes the motivation for encouraging realization of investments. Investors provide placement of their sources when they expect, that the profit made out of the investments overcomes their expenses.  The higher is the norm of net profit, the more is the investments request. Herewith, investment will be profitable only in case, when the expected norm of net income overcomes real rate of percents. Attracting loan resources loses its conception.

The enterprises compare the norm of expected net profit with the loan percentage rate either during using own resources. According to V. Repke, they invest profit in own firm when the level of profit made out of the investment appears to be higher during the loan percent. Otherwise they will be placed at the capital market.[1]

Thus, percentage rate is the criterion of investment effectiveness. Effectiveness of the investment project must not fall below the loan percentage rate. The percentage rate, which makes basis for evaluating the objects of capital placement of the capital of investment assets, does another important function. I. Fisher characterized percent to be the means for “actualization” of every other income, as the method of evaluating every income in time.

Other factors influencing upon the investment request. Following factor influencing upon investment request is the expenses for its realization. They foresee this factor during calculating the norm of the net profit expected from the investment project. The growth of expenses reduces the norm of the expected net profit and on the contrary. Herewith, as the important parts of the investments are of the long-termed character, they foresee time factor as well. In whole, the more are expanses and terms for their expiation, the less is the level of investment request.

Expectation of the industrial persons, who lean upon following requests, the volume of selling and predictions of profitableness also influence upon the volume of investments. Profit made out of the investments will depend upon the growth of these data. Herewith, the groth of optimal expectation gives rise to the growth of investment requests.

The largest profit is made out of the investments in the innovative production, which guarantee reduction of the expenses of enterprise, improvement of the production quality and growth of the expected norm of net profit. That’s why changing in the technologies makes the encouraging factor for the investment requests.

Thus, investment request is formed by the influence of the factors of various kinds and directions, which define their flexibility and dynamism.

Formation of the investment distribution has numbers of peculiarities. From one side, as the distribution of commodity, it is conditioned by such basic factors, as value and, also, not valuable determinants: expenses, fulfillment of technologies, taxation policy, expectations, the level of competition and others; from another, investment distribution is discussed to be specified distribution of commodity, as the investment commodity differs for its ability of making income. This defines characteristic peculiarities of the factor, which is being formed by the dependence upon the level of profitableness.

The norm of profitableness and investments. The norm of profitableness makes basis to the values of financial instruments, which support the movement of real capital. Market price of financial assets shows the quality of attractiveness of the placed sources in the investment commodity.

Percentage rate on deposit in the banking system, the size of which defines the home industry flows, influences essentially upon the investment distribution. Herewith, stock-exchange market and that of the loan capitals makes significant terms for stimulating investment distribution.

As during definite consisting of the investment distribution investment request is oriented towards the profitable assets, we conclude, that the volume and the structure of investment distribution influences upon the volume and structure of the investment request. Herewith, investment distribution is basic factor defining the scales of functioning of the investment market, as it gives rise to the changing of the existed requests on the investment commodity. The mechanism of loopback is not expressed so far. It appears only under the conditions of independent competition.

Achievement of the balance between investment request and distribution is possible only in the total scales of the investment market. Their equalization in the marketing system takes place only in the total scales. Working of the mechanism of the balanced prices doesn’t characterize only independent competitive market. This mechanism needs investment commodity and changing of prices on the capital on the basis of balancing request and distribution until there is dynamic balance at the investment market, i.e. until they achieve balanced prices on the investment capital and investment commodity and also synchronization of decisions about their sale and purchase.

The Mechanism of balanced prices. Influencing of the balanced prices upon investment market reflects the specifics of the investment commodity. As we have remarked, this is ability of making profit by the investment commodity. Striving for making more income with fewer expenses makes basement to the making decisions by economical subjects about investments. During definite structure of investment distribution the investors will prefer investment commodity, which guarantee maximal norm of profit at the invested capital under the conditions of minimal risk of investments. High market price of the investment commodity, which is conditioned by its profitableness, makes the impulse for directing important mass of the investment capital in these objects of investments. Relocation of the investment capital, in its turn, widens investment request on distribution of the given commodity that gives rise to the effect of rising price and the effect of increasing distribution under other equal period of time. While increasing distribution of the given investment commodity the market mechanism gives rise to the fall of their prices. That is why investment capital outflows to the more profitable spheres of the investment activities. Finally, the discussed process will be finished with dynamic balance at the investment market.

Herewith, balance under the conditions of pure competitive market means that according to the comparison of the expected level of he loan percentage rate and marginal effectiveness of the capital, decisions about investments give rise to the optimal distribution of the planned investments according to the perspectives of growing profitableness.

Thus, this balance is an ideal economical system, which is characterized with joint proportion of the investment resources and their usage, an optimal realization of economical interests of the subjects of investment activities.

Structure and reality of the investment market. The structure of investment market in the reality is far from the ideal model. Absence of pure competition reduces the dynamism of investment request and distribution, which is displayed only in the face of tendencies, also reduces possibilities of balancing them and, relatively, fixing prices at the balanced level. Potential participants of the investment activity have not equal possibilities at the investment market. They have distinguished possibilities for receiving investment commodity per market price. Large oligopolistic investors are in more advantage situation, then those, which are rivals to each-other.

Thus, investment market in real economical practice doesn’t play ideally the function of optimal distribution of investments. Though, this doesn’t exclude the need of abstract modeling of economical processes, as exactly this gives rise to the displaying of essential relations and currents, define conditions of balances of those elements, which make the totality of economical phenomenon according to the law of free competition.

Balance at the investment market appears to be partially macroeconomic one. Herewith, it also is essential condition for common economical balance. For example, in the well-known model of J. Hicks “ISLM” (“investments-savings-liquidation-money”)the balance at the investment market is the same as the balance of commodity market. That is why this model gained the name of the model dual balance of commodity and money markets.

The model “ISLM” reflects essential relation between investments and money markets. This relation, to our mind, is the most important peculiarity of the investment market.

It leans upon usage of total parameters for investments and money markets as basic macroeconomic characters of these markets. This is percentage rate and the volume of social production.

The balance at the investment market is achieved in case of equality of investments and savings. As we have already exclaimed, investment volume is defined by numbers of factors, though they state the relations to be researched during the economical dependence not by the totality of variables, but by functional unity of just some of them (this totality is considered to be the paribus of cetera).

They use Vsp (the volume of social production) and Pr (percentage rate) to be the endogenous variables of macroeconomic factors influencing upon investments. Remaining factors are considered to be the exogenous variables. In such case investment formula is represented in the following way:

Where, Iev is the part of the investments defined by exogenous variables.

IS curve expresses combination of the volume of national production and percentage rate, during which investments equal to the savings.

Financial mediators and capital market. Correlation of transformation of the investments and financial market defines essential role of this latest in functioning of the investment market. In the first place, it is reflected by the fact that the request of enterprises and firms appear in the financial resources of basic and turnover capital form. In this case distribution of investment commodity turns into the cash-credit form. It is represented in the form of family industry and the savings of firms, which are accumulated in the banking system and are granted by definite percent.

Following peculiarity of investment market is also evident. This is the existence of developed web of those financial mediators, which make realize connection between sellers and buyers of the investment capital. Financial mediators gather separate savings of the family industry and firms in the significant mass of the investment capital, placement of which takes place later between the users of investment.

The existed investment potential is concentrated in the institutions of banking system, which have special possibilities for using traditional cash resources and credit emission. Placement of the capital mobilized by financial mediators may be provided in the form of loans, emission of shares, purchasing bonds or other securities and so on.

Equality of a dividend and percent and investment request. The profit, received from this or that financial assets is divided into dividend and percent. This depends on what form they represent – industrial or loan. Wholly they reflect the norm of profitableness of the produced capital valuables. The equality of dividend and percent shows the structure of the investment request, its distribution between firms and banking system. This equality has the form of market price (rate) of financial instruments at the financial market.

For movement of capital valuables financial instruments fasten reaction of the prices on the changing of the norm of profitableness and thus they guarantee fast outflow. The size of their market price appears to be the indicator of the working conjuncture as a result of dynamism of investment activity. Thus, the mechanism of balanced prices at the financial market turns into the sharper forms of displaying.

Essential peculiarity of the investment market is the role that is played by the percentage rate on it. As we have shown, the size of percentage rate gives rise, in the first place, to the size of the savings of family industries attracted by the credit system, and from another, the norm of profitableness of investments. They evaluate even own potential resources of the firms with the help of percentage rate: if the expected profit is higher, then the percentage rate, they direct it to the investments, in other cases they place them at the financial market – in the form of deposits, purchasing securities and so on.

According to the said above, effective functioning of the investment market may be provided only under the conditions of developed financial market and firm banking system. It this case market foundation of percentage rate, equal conditions for investments in regional and branch aspects, attractiveness of long-termed investments and the level of regulated inflation make important conditions for interaction of investments and financial market.

Marketing mechanism cannot provide these conditions. State regulation must conform to the economical currents on the a basis of which market mechanism reacts on changing conditions, it must foresee prediction of various results of the complex of influencing activities, create conditions for realizing potential possibilities of market mechanism in the form of antimonopoly activities.

Related Investing Articles

Ways of turning cash means into investments. Sources belonged to he investments in the objects of industrial and nonindustrial spheres, mostly come out in the initial form of cash means. Turning of these latest into the investments may be provided in different ways. The easiest way takes place in the case, when industrial subject manages and owns definite means, uses them for widening and improvement of production and also for creation of nonindustrial objects. In the resembling type savings of those persons, which start activities with own savings turn into investments.

Though, in other cases turning savings into investments is a difficult process. The fact is, that most part of the population has no opportunity to provide investments straight into the production, because for this they must have manners of enterprise administration, and of course, own definite minimal amount for this or those reasons. Part of the enterprise profit also does not turn into the investments.

Herewith, form one side, population and some enterprises own free cash sources, from another, many enterprises need additional means for their investment program realization. Transmission of sources is realized by the channels of financial market, where owners of cash means appear to be the distributors of investment capital, and those persons, who influx sources – consumers.

Basic channels for transmission of cash means from distributors to consumers. Depending on how transmission of cash means is realized from distributor to the consumers, we can point out two basic channels at the financial market. First is the market of banking credits. Banks accumulate temporarily free cash means of the juridical and physical persons. Of course, they pay definite percents at the influxed sources and later give credits to the borrowers (to those ones, who provide real investments) for high percent. Thus, process of money movement from the owner, to the borrower is realized with the help of a bank.

In many cases such way of transmission of the cash means answers to the interests of the cash owner. Though this latest takes too little percent from the bank, but thus he/she avoids the risk of not returning of money from the borrower. Except security, banking deposits are high liquidate, as the depositor can take own amount out and also investment of cash means is reachable even for the smallest depositors (owners of the savings).

Bank pays very little percent to the depositors comparing with those it takes from the borrowers, that’s why it is natural, that the distributor has a desire to invest capital exactly into the relation with these borrowers.

As to the capital consumers (borrowers), it is advantage for them to get in direct touch with distributors. The fact is that getting banking credit is often followed by great difficulties. For example, often the bank doesn’t lend credit in the term, which is needed by the borrower; the bank may not have total amount requested by the borrower, for realization of the large-scale projects and so on. All these lead us to the large-scaled realization of attracting free cash sources together with the banking credit by capital consumers in other way – by emission of securities.

Somehow this way answers the interests of distributor of investment resources and their consumers. Distributors of resources (owners of savings) often are able to invest their sources in relatively advantage conditions, then banking deposits are and for longer period of time. Quite simple procedure of placement of sources is realized in the way of selling and purchasing of securities. Also, if securities are characterized by quite high level of liquidity, then the investor can invest wasted sources by selling own securities if necessary.

From the point of investment resources consumers’ view emission of securities has priority relatively to the banking credits. Hey (capital consumers) are given opportunity to influx cash sources from a lot of distributors of capital and accumulate large amount of money. Also, sources may be influxed for long period of time, sometimes for indefinite terms, if the affair touches upon securities.

Thus, market of banking credits and market of securities in the modern conditions appear to be necessary rings for investment processes, basic areas, with the help of which savings are turned into investments and are used for development of the production.

As said above, depending at objects of capital investments they separate real, financial and intellectual investments (drought 5.7.). Under real investments they mean placement of sources (capital) into creation of real assets (as of material, so immaterial ones), which are in touch with the realization of operative activities of economical subjects, salvation of their social-economical problems. Under financial investments they mean placement of capital into different financial instruments, in the first place into the securities.

Financial investments either have speculative character, or are oriented towards long-termed investments. They recognize to be the form of financial investment placements of sources into shares and securities, also into the loan banking deposits.

Financial investment oriented towards long-termed placements of sources is related with strategic goals of participation in the management of the investor’s object, in which the capital is invested.

Fictive capital. Concepts of real and financial investments are in close touch with the ones of real and fictive capital. In the economical literature they usually mean securities under fictive capital. Real capital is placed into production and securities serve for the title of property, which represent this capital. Financial capital is “the capital which exists in the face of securities, bring profit to the owners. Different from real capital, which is placed into various fields of the industry, fictive one has no inner value and is not considered to be real wealth, that’s why it has no function in the process of capitalist further production.and, according to this, we want to pay attention to the following: for every separate owner securities (fictive capital) represent valuable, which brings to him absolutely real income. Though, from the point social capital securities don’t represent real prosperity. Growth or reduction of the value of functioning securities in the society may take place independently from real capital. According to this, securities appear to be a fictive capital.

Real capital of the society is grown at the expense of investments into the real assets, while fictive capital may be increased without financial investments, at the expense of course value of the securities emitted earlier. A significant example of the process of fictive capital growth is process of emission of the so-called produced securities. Here they don’s take into account real investments, but they give rights for purchasing securities already produced or emitted earlier. In this case financial investments are followed by the growth of real capital of the society.

Though, to our mind, this subject is not so easy, as it seems. The fact is that growth of the share course is realized not itself, but by the fact that the effectiveness of using real capital is growing.  The growth of course value of the enterprise shares expresses the fact, that the market gives too high estimation of the given enterprise.

Herewith, we can make a conclusion, that fictive capital is not a real wealth; it provides marketing estimation of real capital of the society in every given period of time. Imagine that we have two enterprises with absolutely identical real assets, though one enterprise uses these assets better and works more effectively. It is evident, that course value of the shares of this enterprise is higher, then those of other ones. That’s why fictive capital is being grown not itself, but expresses the position of real capital. Size of fictive capital is nothing but the marketing value of the real capital, the title of which is fictive capital considered to be.

Herewith it is difficult to agree with, that “fictive capital acts no function in the process of capital further production”. Securities (a fictive capital) play important role in the process of further production while turning of the savings into investments. A fictive capital (securities) makes income for its owners. Exactly the desire of making profit makes the owners of the savings to invest sources into securities. Amounts gathered by the issuerare used for creation and purchasing of the real assets, accordingly the growth of the volume of production takes place.

Movement of financial investments reminds us the movement of loan capital. As K. Marx showed us, in the process of movement of loan capital one and the same capital amount appears in the degree of capital-owner and capital-function. Income of the functional capitalist is divided into two parts – into the loan percent and the income of the clerk. Under the conditions of weak development of the joint-stock company free capital was put into the production in the form of loan capital. Real investments in the production are realized at the expense of own and loan capital from the functioning capitalists.

By realization of the joint-stock form of the enterprise the character of the investment process is essentially changed. In this case, they mean the joint-stock company may realize real investments at the expense of own sources (indivisible profit) or at the expense of banking credits. So, that they don’t apply for the financial investments.

Though, it is different in the case of joint-stock company. While foundation of the joint-stock company the founders are enter property, cash means, and intellectual property into the initial capital. Every deposit is estimated in the cash form and every founder purchases a definite package of shares for appropriate share, which is entered into the initial capital of the society. Amount of one and the same investments turns into real or financial investments. the process of real capital growth is followed by the growth of fictive capital. Herewith, in this case real investments can not be realized without share emission, i.e. without financial investments.

In the case of growing initial capital of the joint-stock company emission of new shares is taking place, then it is followed by real investments. Thus, financial investments are considered to be necessary attributes for the investment process. Real investments are impossible without financial ones. Real investments take completed face by realization of financial investments.

Widening of the production may be realized, also by the borrowed sources, which are influxed with the help of emission of the loan securities. Consequently, even in this case the process of real investments is realized with the help of financial investments.

We have different situation, when we apply for secondary market of the securities. If the investors purchase shares for already activated enterprise, then sources wasted for purchasing shares already are investments. But these sources get to the previous owner of the shares that’s why growth of the real capital of the enterprise doesn’t take place. It is same with the purchasing of securities of any kind at the secondary market. In this case (if the course of securities are not grown) the growth of fictive capital of the society doesn’t take place. Only the distribution of fictive capital among the members of society takes place. Thus, financial investments, which are realized in the forms of purchasing securities at the secondary market, are considered to be relatively independent form and it is not directly related with the process of real investments.

According to the said above, we can make the following conclusion: financial investment is the connecting ring of turning of the savings into real investments. With its help the savings get into the production; at the same time they can appear to be relatively independent form of the investments. Foreseeing the fact, that today joint-stock company is considered to be quite spread, organization-legislative form of the enterprise; we may come to conclusion, that financial investments and security market play very important role in the investment process on the way of turning savings into real investments.

Intellectual investment definition. Investment market is a difficult system consisted of various structural elements, among which there is a numerous connection. Scheme (in the drought 5.8.) represents a clear example about structure of the world investment market.

As seen from the matter, investment objects are divided into financial and material (real) assets. Each of them has quite diversified structure.

Financial assets concern financial and payment obligations of every kind, which are basically created by the economical agents while their work. This is cash money; deposits existed at the current accounts, short-termed loan obligations, for example, shares and other financial documentation, which prove the property of right at the capital or setting arrangement at the movement of financial resources.

Material assets are: movable and unmovable property, lend, buildings, precious metals, commodities of long-termed usage, material valuables or inventory having short-terms of produced service and so on.

Modern structure of investment, in the first place, expresses significant surplus of the financial assets at material ones (accordingly 57.7% and 42.3%), ant second, in the structure of financial assets itself securities, short-termed obligations and accounts having investment character occupy more and more bigger place.

Correlation of financial and material assets of the investment market may be expressed by the coefficient of financial interrelation. Idea of involving such coefficient belongs to R. Goldsmith, who is the author of the works written about the structure of national wealth and financial systems of developed countries. This scientist in the second part of 50s and beginning of 60s worked out the method of calculation of the coefficient of interrelation. He calculated this coefficient as conformity of total financial assets with the size of material assets received by deducing of the country net foreign assets. Net foreign assets show conformity of foreign debt of the given country and its residents with the one, which are owned by the foreign country and its residents towards this county. Citizens, companies and other juridical persons have right to have accounts abroad, to give credits to the foreign citizens and to have property abroad. Also, they are possible to get in debts themselves towards the foreign citizens. If the size of foreign property and financial wealth of the country resident surpluses debts towards the foreigners, then net foreign assets appear to be positive size and on the contrary.

According to the investment nature, which basic kinds of the investment market – financial and material ones, or the real investment markets in the modern conditions may be added by the market of intellectual investments. This latest functions in the way of licenses, engineering-consulting service, Now-how, scientific processing, sales and purchasing of projects and others.

As in the marketing economics, so at the transmitting stage, alternative variants of using resources, investment resources among them. The principle of inter changing touch upon the realized investments as in the material forms, so in the human capital. It is well known that under the modern conditions investment in the human capital is very important and gives a large profit. This is stated in many economical works.K. Sax and F. Lauren point to the investments into the human capital. They notice that investments into the human capital have a great importance for marketing economics.Nowadays a theory of intellectual capital makes foundation to the realization of investments into the human capital.The authors of this theory concern, that intellectual capital is a difficult category. It is wider than the human capital, as in it information is considered to be the independent industrial resource.Investments into the intellectual capital differ from the ones realized into the human capital. It also concerns the elements of structural capital, which means investments realized into the furniture, computers, programs, patents and trade marks. On the basis of intellectual capital theory a concept of social partnership was formed. This conception leans upon the investments placed into the social capital. Social capital theory means relations of mutual help and development of trust relation in the separate groups or readiness of participation in the unions. More educated and qualified workers have more possibilities for formation of social capital and economical macro-system. On the basis of investments realized subjective leaders of attractive investment surrounding is formed in the social capital, that influence significantly upon the development of intellectual investment market.

Intellectual investment market has the following peculiarities:

First, intellectual investment market is the consisting part of service market. It provides realization of specific commodity by straight contracts between producers and consumers. Herewith, trade mediating is not the exception. Though there is a principle distinction between mediating and consuming commodities at the market of intellectual investments. Analyzes of different researches show, that in the conditions of transitional period growth of the share of mediator structures in the section of consuming commodity of massive request take place in Georgia. The mediator is not requested to have a special knowledge, only initial information is enough. Of course, mediating at the market of intellectual investments requires high qualification level of the firms’ specialists. The mediators themselves, which unite “producer-consumers”, are not many. Herewith, mediator service at the market of intellectual investments is different form analogue service of the market of massive request commodities in the equal conditions by quality and effectiveness (at the expense of reducing expenses of the interested sides).

Second, the market of intellectual investment influences greatly upon capital movement and the market of labor forces.

Third, intellectual investments are protected by the state from the foreign competition, also by export and import of final result of using intellectual investments. Functioning of the market of intellectual investments cannot exist without protection of rights at the objects of intellectual property.

Fourth, for entering international market by inner market organizations and intellectual investments additional are not needed.

Fifth, formation of market values is specific at the results of using intellectual investments.

Values of intellectual investment products have not direct connection with the work spent on it. The value of intellectual investment product is defined by what it gives by using in the production process. Herewith, value of intellectual investment process is defined as expression of effect received by this product usage by money.

Market value at the intellectual investment product is formed as agreement one, by using two prices (of seller and purchaser). The purchaser may apply for the fact that a profit received from using intellectual investment product, minimally, is to compensate the expenses made by the seller for selling this product and also expanses of the buyer for its realization. The seller doesn’t often sell the intellectual investment product, but transmits only the right for its using. Thus, agreement value on this production is close to the buyers’ one in practice.

Realization of intellectual investments at the market may be provided in the following forms:

-      by transmitting rights for using licenses, Now-How, commodity sighs and so on;

-      by selling-transmission of Now-How, technological experiences and so on. Agreements on such acts of sell and purchase from license agreements are different by the fact, that the owner of Now-How doesn’t refuse its selling, but doesn’t agree with its patenting;

-      by providing engineering services;

-      by transmission of technologies, in the way investment partnership, within the bounds of which takes place not only sell and purchase, but in other ways of its distribution consultations, qualifying specialists, transmission of droughts and technological exchanges.

Engineering is one of the basic forms of realization are the market of intellectual investments. It means providing different engineering-consulting service on the commercial basis. They divide engineering service into two groups: 1) service related with preparing production process; 2) service related with provision of normal continuing of the process of production and its realization. To the first group belong: a) pre-projecting service (social-economical researches; topographic processing and planning of location; researching grounds; searching for the minerals; technical-economical statement of project and so on); b) projecting service (preparing general plan and recommendations; estimation of expenses made on its exploitation beforehand; preparing technical specialists and so on); c) further service of he project (preparing contracting documentation; organization of auction; estimation of suggestions; making contracts; managing building process; making and granting certificates about finishing work, making technical conclusion about building and so on); d) special service (researching about utilization, various juridical procedures and so on). To the second group of engineering service belong: service related with the managing and organization of the production process, service related with the examination of the object; consultations in the financial questions; service related with the production realization (researching the conjuncture of the market, advertisement organization), service related with the involving the system of informational provision and so on. Engineering consultations, in the conditions of deficit of high-qualified personnel, can provide intellectually the investment process, help firms to rise effectiveness, fasten circulation of the investment resources.

Portfolio investment market is the consisting part of the financial investment market. By forming society of share-holders and with the help of financial institutional investors, their activity at the financial investment market support significantly accumulation of independent cash sources in the country, also attracting of foreign investors, fastened circulation of financial investments, effective insurance for financial-investment risks and so on.

For clearing investment motivations up and defining levers is state influence we thing advisable discussion of peculiarities of the investment circulation in the process of further production of material (basic and turnover) and financial capitals.

Investment circulation in the process of investment activity is realized in the following basic directions:

investments in the material assets (production of basic and turnover capital); investments in financial assets; investments in the intellectual valuables.

Let’s discuss investment circulation in the process of further production of the material assets (basic and turnover capitals). Its every element may be divided into movable and immovable properties. Furniture, mechanisms, turnover capital belongs to the elements of movable physical capital and elements of passive part of basic capital (buildings, equipment, industrial infrastructure) – to the unmovable one.

Further production of the movable physical capital is realized in the industry, and of unmovable ones – in the building. Investment activity may be realized in the way of showing of unmovable property, furniture and other elements of physical capital at the market, or in the case of absence of needed commodity, in the way of their production (building).

Investment activity may be realized at the expense of different sources: own, borrowed, attracted sources for investments, budgetary assignations. Structure of sources depends at organization legislative forms of active and newly formed enterprise. Investments may be displayed as in the cash, material forms so in the face of property rights and intellectual potential. Foreseeing said above, investment circulation in the further production of a physical capital might be represented in the following way:

Economical essence of the given chain of transformation exists in the following: investments in different for (cash, productive, commodity) are placed into the objects of investment requests for industrial activity. After this a process of transformation of investments into industrial factors takes place. Thus materialization of investments takes place, which appears in the face of rising value of investor’s capital property.

Exactly the new transformation of capital value finishes investment circulation in the Soviet economical literature. They departed artificially stage of formation of new capital value and stage of their functioning, which defines real level of income of profitableness of these valuables, and finally the period of self-compensation of investments.

As main goal of investment are making profit, investment circulation definitely concerns a period of exploitation of purchased capital valuables till the moment of financial recourses, by which investments in the capital production are compensated.

In this case, production, which is produced in the form of investment commodity, is realized at the markets of different investments (real estate, furniture, materials and other markets).

What is the distinction between investments and investment commodity, as they coincide with each other in the material form and ability of making income? To our mind, basic distinction is in the “universality” degree of investments and investment commodity. Any investment commodity for realization at the markets in the future becomes a factor of production in concrete material or cash forms. Material transformation of a capital doesn’t mean further production, it may be even threadbare – morally and physically, and investments, as they are movable form of cash capital – may make endless and permanent profit. To our mind, this makes investments different from the investment commodity.

Investments into the financial assets take place in relation with their profitableness norms. Income, according to the different financial assets, is divided into dividends (kind of industrial income) and percents. This is defined by what capital they represent – industrial or loan.

A process of investments into the financial assets may be represented in the following way:

First, intellectual investment market is the consisting part of service market. It provides realization of specific commodity by straight contracts between producers and consumers. Herewith, trade mediating is not the exception. Though there is a principle distinction between mediating and consuming commodities at the market of intellectual investments. Analyzes of different researches show, that in the conditions of transitional period growth of the share of mediator structures in the section of consuming commodity of massive request take place in Georgia. The mediator is not requested to have a special knowledge, only initial information is enough. Of course, mediating at the market of intellectual investments requires high qualification level of the firms’ specialists. The mediators themselves, which unite “producer-consumers”, are not many. Herewith, mediator service at the market of intellectual investments is different form analogue service of the market of massive request commodities in the equal conditions by quality and effectiveness (at the expense of reducing expenses of the interested sides).

Second, the market of intellectual investment influences greatly upon capital movement and the market of labor forces.

Third, intellectual investments are protected by the state from the foreign competition, also by export and import of final result of using intellectual investments. Functioning of the market of intellectual investments cannot exist without protection of rights at the objects of intellectual property.

Fourth, for entering international market by inner market organizations and intellectual investments additional are not needed.

Fifth, formation of market values is specific at the results of using intellectual investments.

Values of intellectual investment products have not direct connection with the work spent on it. The value of intellectual investment product is defined by what it gives by using in the production process. Herewith, value of intellectual investment process is defined as expression of effect received by this product usage by money.

Market value at the intellectual investment product is formed as agreement one, by using two prices (of seller and purchaser). The purchaser may apply for the fact that a profit received from using intellectual investment product, minimally, is to compensate the expenses made by the seller for selling this product and also expanses of the buyer for its realization. The seller doesn’t often sell the intellectual investment product, but transmits only the right for its using. Thus, agreement value on this production is close to the buyers’ one in practice.

Realization of intellectual investments at the market may be provided in the following forms:

-      by transmitting rights for using licenses, Now-How, commodity sighs and so on;

-      by selling-transmission of Now-How, technological experiences and so on. Agreements on such acts of sell and purchase from license agreements are different by the fact, that the owner of Now-How doesn’t refuse its selling, but doesn’t agree with its patenting;

-      by providing engineering services;

-      by transmission of technologies, in the way investment partnership, within the bounds of which takes place not only sell and purchase, but in other ways of its distribution consultations, qualifying specialists, transmission of droughts and technological exchanges.

Engineering is one of the basic forms of realization are the market of intellectual investments. It means providing different engineering-consulting service on the commercial basis. They divide engineering service into two groups: 1) service related with preparing production process; 2) service related with provision of normal continuing of the process of production and its realization. To the first group belong: a) pre-projecting service (social-economical researches; topographic processing and planning of location; researching grounds; searching for the minerals; technical-economical statement of project and so on); b) projecting service (preparing general plan and recommendations; estimation of expenses made on its exploitation beforehand; preparing technical specialists and so on); c) further service of he project (preparing contracting documentation; organization of auction; estimation of suggestions; making contracts; managing building process; making and granting certificates about finishing work, making technical conclusion about building and so on); d) special service (researching about utilization, various juridical procedures and so on). To the second group of engineering service belong: service related with the managing and organization of the production process, service related with the examination of the object; consultations in the financial questions; service related with the production realization (researching the conjuncture of the market, advertisement organization), service related with the involving the system of informational provision and so on. Engineering consultations, in the conditions of deficit of high-qualified personnel, can provide intellectually the investment process, help firms to rise effectiveness, fasten circulation of the investment resources.

Portfolio investment market is the consisting part of the financial investment market. By forming society of share-holders and with the help of financial institutional investors, their activity at the financial investment market support significantly accumulation of independent cash sources in the country, also attracting of foreign investors, fastened circulation of financial investments, effective insurance for financial-investment risks and so on.

For clearing investment motivations up and defining levers is state influence we thing advisable discussion of peculiarities of the investment circulation in the process of further production of material (basic and turnover) and financial capitals.

Investment circulation in the process of investment activity is realized in the following basic directions:

1.   investments in the material assets (production of basic and turnover capital);

2.   investments in financial assets;

3.   investments in the intellectual valuables.

Let’s discuss investment circulation in the process of further production of the material assets (basic and turnover capitals). Its every element may be divided into movable and immovable properties. Furniture, mechanisms, turnover capital belongs to the elements of movable physical capital and elements of passive part of basic capital (buildings, equipment, industrial infrastructure) – to the unmovable one.

Further production of the movable physical capital is realized in the industry, and of unmovable ones – in the building. Investment activity may be realized in the way of showing of unmovable property, furniture and other elements of physical capital at the market, or in the case of absence of needed commodity, in the way of their production (building).

Investment activity may be realized at the expense of different sources: own, borrowed, attracted sources for investments, budgetary assignations. Structure of sources depends at organization legislative forms of active and newly formed enterprise. Investments may be displayed as in the cash, material forms so in the face of property rights and intellectual potential. Foreseeing said above, investment circulation in the further production of a physical capital might be represented in the following way:

Thus, whole system of investment market forms total investment-market space. In this space a market of financial investments is filled by real and intellectual investment market.

Lamara Qoqiauri

Real Member of Georgian Academy of Economic Sciences

and New-York Academy of Science;

Doctor of Economics; Professor

Again about investment financing of the banks. As practice shows, long-termed financing of programs doesn’t take place spontaneously, but it means analyzing and control of current activities of the enterprises. For satisfaction of such requests, unfortunately, not every enterprise appeared to be ready. There, where all these requests are satisfied, banks become active participants in processing plans of strategy and financial provision of investment activities of the enterprises.

A special attention is required by such direction of the activities of commercial banks, as project financing is, which, to our mind, requires administration and financial support from the government, we mean the condition, that for effective salvation of investment problems it is necessary to create finance-industrial groups, and holding unions, which, in its turn, represents initial form of forming thick financial capital at the market and confluence of bank capital to the industrial one.1 This will give rise to the growth of investment volume in the economy and growth of effectiveness of capital investments. Of course, creation of such unions will be actually supported by commercial banks, but this is interrupted by such condition, that groups created today provide this activity in unregistered form and nobody is interested in their registration. This is supported by incomplete logistic, slow development rates of the institute of private property, interruptions in realization of agrarian reforms, provision of accounting calculations of financial structures in incomplete form and existence of separate statements working opposite to the creation of holding unions in the low about industry. All mentioned above may be solved immediately, by processing special low about investment activity and on the basis of its setting by the parliament in a short period of time.

It must be mentioned, that there are enough conditions for widening financial investments in the economy from the bank side because of the existence of free cash means. It is important, that these financial resources were influxed and to create a system of rational organization of purposeful usage, which must be expressed by processing of the investment policy. Here an important meaning belongs to the investment policy and correct definition of tactics.

What problems are there in front of the banks? It is also to be mentioned, that commercial banks have numbers of problems while realization of their investment activities, which prevent their normal functioning. We mean the banks, working on financing investment projects, in fact, represent only one unit in the system of private institutions. We consider following to be preventing conditions of their activities:

· Existence of marketing center of the investment projects, a coordinating organ in the country scale, which would play a function of regulator in the financial provision of the investment projecting;

· Unacceptability o the information about position of a potential borrower or investment institution;

· Refusal of creation of deposit web;

· Low level of development of the investment funds existed today;

· Absence of state investment bank, total specific organ of financing investment activity and, consequently, spontaneous distribution of the functions of investment banks working abroad under the conditions of market economics among Georgian commercial banks.

It must be also mentioned, that there are many economical factors, which may influence negatively upon realization of investment processed by the banks and nobody can define beforehand nontransiency of expected risk danger of these factors. Herewith, widening of working sphere in the investment activity of commercial banks objectively requires: giving more independence and rights to the commercial banks, growth of effectiveness of long-term investments and growth of incomes, relatively with those received from short-term financial operations, fastening of this process, ll kinds of supports from the side of the government and finally, further statement of trustfulness and firmness of the activities of banking system.

About necessities of providing structure institutional reforms in the country. For guaranteeing firmness of banking activities structure-institutional reforms, min goal of which is preparation for new stage of development of banking field, come to the first place. Necessity of the mentioned reforms is conditioned by the position of financial market of the country. New institutions, as mentioned in the works of D. Nort – the laureate of Nobel Premium, are formed in the case when the society sees the possibility of making profit, which is impossible during active institutional system. Maximal investment activities of banks are possible during many-fielded system o a financial market. This is a result of logical development of competition, as it solves problems of optimal usage of financial resources. Exactly this many-fielded character reduces and stops crisis in the country.

Many-fielded character of the banking system is characteristic to the most part of developed countries (the USA, countries of western Europe, Japan) and also for the countries having transitional economics, which applied for firm economical growth in the last decimal (China, Poland, Brazil and others). Exactly this many fielded banking system gives possibilities for using various types and forms of financial service in economics by credit department.

In this system the state creates various mechanisms of artificial reduction of competition among financial organizations. An evident example of this is separation of credit institutions into commercial and investment-credit institutions in the USA, also reduction of the bans of countries in the sphere of realization of many year credit investments and separation of state bank into separate category.

About development of small-scale business in Georgia. Creation of advantage regime for small-scaled business, in the first place, regulates creation of competition able outer conditions of the investment activity, which must be definitely foreseen in the activities of the country’s banking system. It must also be mentioned, that according to the development and improvement of the economy in the future, perhaps, such activities may not be needed, but under the conditions of transitive economics their importance may not be specially noticed. It is natural, that many-fielded financial sector is formed only under the equal conditions of competition, as there is reason-resulted, reverse-influencing relation. Mentioned relation between many-fielded financial sector and competition is expressed by that it helps creation of advantage regime for the investment activity being in the position of an embryo and its further development.

Briefly about state regulation of the investment process. According to the many-fielded principle of the financial market, the state must work out such a system of regulating investment activity, which guarantees “peaceful” coexistence of various financial institutions notwithstanding their size and specialization. Banks of every category must “act” in their marketing “sphere”, while regulation of banks of different levels from the state is stated according to the rules of regulation. Privately, to our mind, it is important to point out and regulate activity spheres of those banks, which use a capital of governmental organs. Under the conditions of many-fielded system of a financial market competition carries “fair” character and this is why such system is much firmer. Privately, in case of many-fielded system, under the conditions of concrete fight, while financing concrete state programs by forming a system of specialized state banks usage of state resources is possible more effectively. In this case objective usage of lobbing of state resources from the side of commercial banks is not allowed. For example, in Germany realization of state projects of ecological, agrarian, building and other fields are provided by specialized commercial banks. There are specialized credits in the banking system of other developed countries (Japan, Italy, France and so on) too. Such practice significantly reduces danger of incorrect usage of state resources under the conditions of competition fight.

One of the most important factors, which degrade effective development of real sector of the economy, is the irrelevance of the needed financial capital for the regional services. Basic volume of financial resources from the enterprises is accumulated in the center. Such situation is in a way justified for the state, but it is absolutely insoluble in relation with the private companies.

According to the various estimations, regional banks control not more, than 20-30% of inflow of financial resources of the regional enterprise, and this seriously degrades development of the local banks and enterprises. Thus, for solving problems about lack of resources for crediting real sector of a small economics of regional banks, question related with it, must be discussed in relation with outflow of financial resources from the region. Solving of these problems by administrative activities is impossible, processing of appropriate economical activities is needed. We mean the condition, that together with the growth of the share of local budgetary tax income, it is important to define responsibilities of the budgets of municipal creations in the development of regional economics. Thus, financial federalism is that necessary condition, which guarantees, from one side, formation of balanced market of financial service, and, from nother, further development of the investment activities on the basis of appropriate legislative base.

What does a financial federalism bring to the financial market? Creation of equal conditions for the competition under the conditions of financial federalism will naturally lead us to the formation of many-fielded system of the financial market. Such process also gives rise to the creation of thick financial centers on the basis of the existed and newly formed banks. Thus, development of regional banks within the bounds of the conception of banking industry development, gives rise to the growth of financial potential o regional economics. At the modern stage conditions of development of bank branch sphere are being widened more and more. Today banks mostly provide sources of basic financial capital inflow in the way of “region-center”, after transition to the real federalism many-fielded banks transform into the banks providing sources for financial capital outflow among the regions.

It also must be mentioned, that it is important to grow the importance of banking business, which must be expressed by forming town and country credit relations, mutual crediting and insurance societies, and loan-constructing associations. All these must be foreseen in Georgia in the process of banking system development and, accordingly, an adequate logistic must be prepared for advantage conditions for development of small and middle banking businesses, because formation of effective financial system in the regional scale is absolutely impossible. Therewith, if we take into account the fact, that the investment portfolio in the structure of joint assets of Georgian commercial banks did not overcome 1% for the first of January of 1999, and 4% for the first of January of 2005, this speaks for the tendencies of growing portfolio investments.

Attraction of foreign investments. Globalization and internationalization of the world’s industrial relations gives rise to the growth of the role of foreign investments, as financing investment activities.

Essence and types of foreign investments. Foreign investments are hose capital resources, which are taken out of one country and invest abroad in this or that industrial activity, for the purpose of making industrial profit or receiving percents. Foreign investments may be realized in various forms. While analyzing this form we can use distinguished methods of approach for classification of the investments, which men their separation from each-other according to the objects, purposes, terms of investments, forms of property on the investment resources, risks and other signs. Herewith, the necessity of specific of foreign investments defines statement of number of classification features for the investments of this type.

For example, foreign investments may be state, private and combined according to the property forms on the investment resources.

State investments are those resources of state budget, which are directed abroad by decision of the government or inter governmental organizations. These resources may have the face of state resources, credits, grants ot support.

Private (nongovernmental) investments are resources of private investors placed into those objects, which are placed out of the bounds of given country.

They call combined investments joint placement abroad of the resources of the private investors and the government.

According to the character of usage, foreign investments may be industrial and loan.

Industrial investments are direct or indirect ones placed into the business of this or that type for taking some rights for making profit of dividend kind. Loan investments are related with the distribution of resources under the loan condition, for the purpose of receiving percent.

While analyzing foreign investments, apportioning of straight, portfolio and other investments is of a great importance. Movement of foreign investments according to the international currency funds and methodology of the countries’ taxation balances are reflected in this section.

Briefly about legislative situation of the foreign investments in Georgia.  As shown in the chapters above, “investments” conceptually express long-term placement of the capital of solid quantity for the purpose of making profit. According to the Georgian low “about support and guarantees of the investment activities” investment is considered to be the valuable of every property and intellectual kind or the right, which is invested for the purpose of making possible profit and is used in the industrial activities provided on the Georgian territory. It may lean upon as inner (inside country), so outer (foreign) sources.

Here a great attention is paid to the investment surrounding (climate), which means real conditions existed in the country for the investments. It defines intensive attraction or declining foreign capital for the long-term investments. I.e. according to the concrete condition, investment surrounding may be as advantage, so in advantage, which is foreseen by every investor before making concrete step. Fundamental analyzing of the investment climate existed in the country and foreseeing risk factors are the basic goal f every investor.

Thus, it is definitely difficult to say, is present situation in Georgia good or bad. It would be more correct if we say that there are as advantage (stimulating), so preventing conditions in the country.

Foreign investments in Georgia are prevented by constitution, by the low “about support and guarantees of the investment activities” and by two-side agreement about investment encouragement and protection. Today Georgia has signed agreements with more then 23 countries about mutual support and protection and with 111 countries – about avoiding two-side taxation.

Legislative foundations and guarantees of their protection of realization of local and foreign investments in Georgia are defined by the low about guarantees and support of the investment activities, according to which foreign and local investors use equal rights. Privately, while realization of investment and industrial activities rights and guarantees of the foreign investors must not be less then those of the local juridical and physical persons.

According to the same low, physical and juridical person, also international organization, which provide investments in Georgia are considered to be the subject of the investment activity.

It must be mentioned, that after paying taxation and compulsory payments, a foreign investor gains right for unreduced repatriation abroad of the profit received from investments and other cash resources, and this may reduced only on the basis of the low – according to the court decision in case of bankrupting, crime or not fulfillment of civil obligations. Herewith, foreign investor has right to take abroad the property being under his/her property.

Georgian low “about supporting and guarantees of the investment activity”. Positive and negative sides. Georgian low “about supporting and guarantees of the investment activity” foresees as preventing and reductions in the sphere of providing investments, also the guarantee of protecting them, which means untouchable character of the investments and compensation in case of taking away investments within the bounds of the mentioned low. The compensation, which is given to the investor in case of taking investments off him/her, must conform to the real market value of the taken investments for that moment, when the taken off takes place. The compensation must be granted without any hamper and it must concern that loss of the investor from the moment of taking off till paying of the compensation mount.

It must be mentioned, that a new legislative act, which somehow worsens conditions of investments stated by this low, isn’t spread on already realized investments, ten years after its setting. In such case the investor realizes his/her activity according to the actual low until the new one is put down to the action.

A quarrel between foreign investor and state organ, if the method of its decision is not defined by dual agreement, is solved at Georgian court or in the international center of the investment quarrel. In the case, if the quarrel is not discussed in the international center of investment quarrel, the foreign investors have right to apply for the additional institute of the center or any other international arbitrageur organ, which is founded according to the rules set by the arbitrageur and international agreements of the commission of international trade low of the United Nations. Arbitrageur court of international trade palate in Georgia functions from December 11, in 2000.

According to the statistical showing, the most attractive sectors for the foreign investors were production of oil and gas, energetic, telecommunications and food industry according to the statistic showings during last years. Among largest investors there are such companies as Frontera Resources Corporation (USA), which has invested more then 30 million US dollars into Georgian oil production; Metromedia international – 40 million US dollars of investments in telecommunication; Pernod Ricard (France) – with the investments in alcohol production; AES (USA) – investments in distribution and generation of electro power.

By comparing showings we learn, that according to the hydro energetic potential, Georgia significantly overcomes such countries rich in the so-called “White Coal”, as France, Italy, Spain, Sweden, Romania and others. Though practically, less then 15% of real possibilities are used, and this gives large perspectives to the foreign investments in Georgia.

The fact is to be mentioned, that the foreign companies are interested in the process of privatization of state property, which is one of the most important part of the realized economical reform in Georgia. The fact, that foreign capital is invested in more then 100 Georgian companies proves this.

For influxing foreign capital into Georgia a positive surrounding is created by the existence of advantage conditions for development of such reduced fields, as oil production, black and colored metallurgy, separate kinds of mechanical engineering, mountain chemical industry, bottling of fresh and mineral water, production of building and decorating materials, tea, wine, fruit, citrus, wool, tobacco, industry of their refining and others.

Though foreign companies provide capital investments into these fields, for example, in agrarian and food industries, but it is provided in a very little quantity.

Factors of disadvantage surrounding in Georgia. Among those factors, which give rise to the disadvantage climate for influxing foreign investments in Georgia following are to be mentioned:

· Political strain and not quite seldom facts of lobbing business with unacceptable methods by the representatives of executive and legislative government, this takes away the basis of healthy competition as in common, so among the investors;

· Violation of the territorial integrity of the country, ethno conflicts, Not controlling of Abkhazia and South Alania (Smachablo), difficulties with protecting state boards, which spreads widely the door to contraband and prevents growth of risk factors of  influxing of as native, so foreign investments;

· From the beginning of 90s of last year, analogue to the countries of post soviet space, sharp economical, financial, energetic, food, ecological and other crises developed in Georgia for not ordinal conditions, gave rise to the backwardness of our country’s economy for some decimals. It would be enough to say, that a level of whole European product consisted only 36.8% in 1999, compared with 1991. This was the lowest showing in whole post Soviet space. Such destroying of economical functioning, evidently, reduces requests on foreign investments and significantly restricted their influxing;

For the purpose of statement of the level of spreading negative occasions mentioned above and processing appropriate recommendations World Bank and European bank of reconstruction and development provided joint research, where they learned 22 countries having transitional economics. According to these researches they made a conclusion, that a showing of “state obedience” (of corrupting, taking into hands) in these countries consists average 21%. It must be mentioned, that same showing consists 24% in Georgia. What about average level of administrative corruption, it reaches up to 3%, while in Georgia – 4.3%.Iit is natural, that created situation fears foreign investors and prevents influxing of their capital in a large quantity in our countries.

According to the experience of last years, giving state guarantees to the foreign investments is more difficult. Though, if it were easy to achieve, it would not be enough for the foundation, as Georgian state doesn’t stand on the firm positions, for making n investor sure in stability of the country. For comparing let’s discuss investment surrounding of Czech Republic, privately, that part, according to which investment logistic of the country foresees from April 1998 such scheme of advantages, which concerns taxation, custom and those of definite regions, also, grants for creation working places and so on . According to the mentioned analyze following is cleared out, that equal priorities in using advantages are given as to the foreign investors, so to the local ones. At the same time, if we pay attention to the showing of inflow of straight foreign investments into Czech Republic by years, we’ll see, that after the quantity of straight foreign investments had been reduced in 1997 (1300 billion USD) relatively to 1996 (1428 billion USD), in 1998 it was doubled and consisted 2720 billion USD, and in 1999 equaled to 5108 billion USD. One of the stimulating factors of the mentioned progress must be considered involving a system of advantages activated in Czech Republic from 1998.

Unfortunately, there is not a firm system of foreign investments and insurance yet in Georgia, which would significantly help the process of making investment surrounding healthy and inflow of a large amount of investments from abroad.

Factors preventing development of the country economy – significantly wide scales of shadow economics and corruption, so-called distribution of influence spheres by clans, setting of a barrier in this or that spheres of business especially prevent, from one side, development of local business and, from another – influxing of large-scale international investments.

How to use international legislative norms in the Georgian investment activities. Thus, a lot of problems (complex of problems) are formed in the process of attracting and using of foreign investments, and they are regulated by legislative norms.

Whole logistic regulating foreign investments may be grouped in the following way:

1.  special norms;

2.  total civil norms;

3.  norms of international agreement.

To special logistic in the first place belong special logistic and its following acts of quite large quantity.

Civil logistic regulates and conditions relations of foreign capital and enterprises participating with numerous counteragents. We mean various kinds of agreements, questions of representation, researching questions and so on. Thus, civil logistic is used in the case, when regulation of the activities of foreign investors is not provided with the special one, for its tight direction.

Norms of international agreements is the part of the country’s legislative system. International agreement gains special importance during international economical relations. Activation of the mentioned norm is basically spread on attracting and usage of foreign investments; following legislative acts belong to this sphere:

1. International dual agreement of mutual protection and encouragement of the investments. Dual agreements of foreign investments are discussed in this sphere as additional guarantees of the norms foreseen in national lows. Capital exporting countries and their investors consider that protection of foreign investment is more effectively solved in the way of inter-protection and encouragement of investments.

2.  International two-sided agreement for avoiding double taxation. Such agreement usually defines sources of income – profit and property, which is taxed in the country without any reduction. It is being set, which incomes (profit) and property may be taxed in the country – with some reductions and what source of incomes may be set free from taxations;

3. Many-sided conventions. From those international conventions, which regulate relations related with the investments, two are important – Seoul Convention about stating many-sided agencies of protecting investment guaranties (1985) and Washington Convention about solving quarrels (1965).

Involving of many-sided system of investment guarantees was outrun by creation and development of state system of insuring capital export in the developed countries.

Before making decision about placement of sources by the foreign investor, one of the important conditions is – guarantees of security and protection of capital investments in that country, where investments are inflown, the state takes obligations – to guarantee protecting of foreign property, guarantee of rights and interests of the foreign investor, guarantee privacy of realization of investment activity of the country territory. Thus, under the conditions of strict competition, state forms as much liberal regime for foreign investors as possible.

What difficulties are there in Georgia from the point of attracting foreign investments? Difficulties of definite kind are expressed today in the developing countries and, accordingly, in Georgia in the affair of attracting foreign capital and its effective usage. We my name following reasons for this:

· Regulation of the activities of foreign investors is getting difficult with the absence of stabile legislative base;

· Worsening of material position of the most part of the country population gives rise o the growth of social tension;

· There still are criminal and corruption in some sectors of industrial activities;

· Inappropriate level of infrastructure development; also of transport, communications, system of telecommunication, hotel services, roads and so on;

· High level of unsteadiness of total politics, privately, instability of logistic and court system;

· Absence of joint state investment policy in the business of attracting foreign investments;

Herewith, notwithstanding the difficulties named above, the country owns great potential, what may be the subject for interesting foreign investors. Privately:

· Rich and comparatively cheap resort and tourist resources;

· A large inner undeveloped market;

· Richest reserves of mineral and curing waters;

· Comparatively cheap qualified labor  force;

· Quite high staff of marketing development, which can master new technologies of production successfully and fast;

· Absence of serious competition by Georgian producers;

· Current process of privatization and possibilities of foreign investors in it;

· Possibility for making high profit very fast.

Thus, we can make a conclusion that, compared with the countries of Western Europe, notwithstanding large economical backwardness, Georgia can develop total investment activity comparatively faster, with the help of correct and effective usage of native and foreign investments.

Lamara Qoqiauri

Real member of the Academy of Economical Sciences of Georgia and New-York Academy of Science, Doctor of Economics, Professor

More Investing Articles

About the systemic approach. The systemic approach is the direction of scientific knowledge and the methodology of social practice, which is based on the discussion of the objects in systems. it is used as an instrumentarium, which directs the research to the substantiating the wholeness of the object, discovers various contacts in it and gathers them into the total complex.

The systemic approach in its essence is the concrete principles of the dialectical materialism, in the bounds of which, we can discuss the investment process the series of those operations (the kinds of activities), which is fulfilled at the beginning capital (the preface of the process). It increases the value and conditions a definite result (the exit of the process). It is possible to learn the investing process from the position of the systemic approach, because the investment process is an economical system and it has a preface – the complex position of this system (investment surrounding) and exit – the changes of the entering investments into the economical system. The result of investing process got at the exit, defines the development of the economical system, in which the process is going on, and gives in it rise to the rates of the economical growth.

Ruling the investing process. The investment process is realized by ruling. It is discussed to be such a strategy, which guarantees achieve maximum effectiveness and it leads every kind of activity to the maximal growth of the economical system. Ruling consists of the following active cycles:

1.  the analyze of the current position of the investment process, in which consists of: the analyzes of the investment attractiveness and investment business, satisfaction of the requirements for investments of the economical system;

2.  definition of the showing of volume needed by the investments and of the investment attractiveness, to which this volume is conformed;

3.  Working out activities which provide needed position of the systems’ investment attractiveness;

4.  The changes of the incomes in the investments of the economical system, which is provoked by the changes of investment attractiveness;

5.  Changing of the parameters of economical system at the investors’ expenses, which exists in the changing of the rates of economical growth.

Permanent realization of this cycle improves the ruling system of the investment process and increases the defectiveness of functioning of the economical system.

The realization of the systemic approach is situated in the analyzing the investment process not only in the horizontal section (the ruling subject – investment attractiveness – investor – investment business – the volume of the investment – investment object – ruling subject), but also in the vertical one (the world comradeship – country – region – field – manufacture – physical person). Such discussion reduces the quantity of repeated activity of the ruling of investment process and gives the complex theoretical picture of the investment process.

For preparing and realizing effective investment policy it is important to define clearly and simply the criteria of estimating the investment situation formed in the country, economical fields and regions; also working out methodological apparatus adequate to the economical regalia and its successive usage.

The investment process (that is the process of realizing investments) has every feature of the system: there always is in it a subject (an investor), object (investment object), the connection between them (investment in the purpose of getting income) and surrounding, in which they exist (investment surrounding). It is characterized with a special structure and the opportunity of an exact identification between other economical process. It displays its features as a result of interaction with other systems, protects a definite conception and reflects the points of view, aims and values of the subject of the investment process. Connection is the system-forming factor, because it unites all other elements into one whole (pic. 1). the systemic approach gives an opportunity of exhaustive description of the investment process essence and defines fully its basic concept.

The investment process is defined by the formed interaction about situating investments between the investment subject and object for getting income, also the realized investing influence from the side of subject and ruling organs upon the object; and changing of the conditions of investment surrounding.

Place of the investment process in  the system of social relations. The investment process doesn’t exist itself and it is always involved into the sphere of following level, that is to say that it must be discussed in the bound of the total approach – discuss the system in the sphere of the interconnections with other systems. This gives us an opportunity of describing the place and role of the investment process as in the separate sphere of the activity and also in the system of the social relations. Every subject is oriented towards the development and always demands the supplementing of resource and changing this or that feature. The orientation towards the supplementing this deficit with own forces, slows the economical growth, because it demands from the subject to provide amused activities and wasting the time the its basic resources on this. In the conditions of specialization, the reducing of own forces makes the subject search for the object, the features of which give him an opportunity of of filling the existed deficit with a minimal investments. The need of investments appears, when the potential of the chosen object does not satisfy the necessary criteria and needs a kind of outer participation for its development. The possibility of the investment development occurs when the resources owned by the subject and its features give the opportunity of needed influence of the object upon the demanded features of the object.

At the moment of fulfilling the investment, investor makes contacts with the concrete object. Under the investors influence the features of the investment object changes and then these changed features in the face of investment income influences upon the investor, changes its features, including – filling the resource deficit. After finishing the investment process, the subject and object begin new existence; consequently, the investment process gives rise to the diffusion of the object and subjects’ features.

The dynamic of the social development is defined by the development of separate spheres of the activity. If the revolutionary sudden changes of this or that sphere of the activity gives stimulus to the unseen before growth, this gives rise to the natural chain reaction of the development of connected to these spheres. If the evolution development of the spheres of activities takes place, its dynamics, as a rule, is defined by the least developed abilities. When the investments and investment income have different subject consistence, that is if they belong to the different spheres of activities, the various investment processes make these spheres inter penetrative. According to this, the logical ruled changing of their development dynamics take place. This provokes the natural chain reaction of the development of the interconnected spheres. Consequently, the investment processes give opportunity of making and keeping natural chain reaction of the interconnected spheres of the activities. These processes appear to be the fastening factor for the social development.

Showing the connections between the basic categories of the investment process give the opportunity of establishing dependence of the investment volume to the factors and conditions of the investment domain, that is the investment surrounding formed in the region.

The picture 1.4 may elucidate basic structural elements of the investment surrounding and the connections between them, which are shown in literature.

The interconnection of consisting comp

onents of the investment process. Such an approach reflects the most essential sides of the investment process, but doesn’t give us opportunity of taking in mind the influence of the current processes upon the investment surrounding and on the contrary – of the investment surrounding upon the investment process. That’s why we think important to discuss differently the interconnection of the consisting components of the investment process.

The investment attractiveness is a positive category in its context, and the investment risks participating in the process of forming this attractiveness – a negative one. That’s why it is important to turn the quantitative showings of the risks into the quantitative showings of the concept, which is essentially opposite to the concept of “the investment risk” during taking in mind the noncommercial investment risks, as a complex factor of the investment attractiveness. We must call such a concept (the antonym to the concept of the investment risk) “social-economical and economical security of the investors” or, in other words, investment security (consequently, on the macro-economical, regional, field and industrial level). The mentioned changing gives an opportunity of avoiding inter contrary influence upon the resulting showing – the investment attractiveness of two complex factors – the investment potential and noncommercial risks.

Exactly same way, every private factor of these generalized concepts have at the same positive quantitative [removed]with the help of the positive showing – for defining the final level of the field’s investment security), and also negative one (with the help of conceptually “negative” showing – for defining the final level of the noncommercial investment risks of the field).

The investment attractiveness of the social-economical system (SES) is defined the position of the investment potential and the level of the investment risk. The investment assets existed in the region – the real development of the investment business in the SES – is characterized with the intensity of the investments. It its turn, it is defined by the past, current and future investment assets. The past investment asset characterizes the intensity of the investments invested before and gives an opportunity of defining their future profitability, the quantity of the presumable competitor and the most profitable sphere for the capital-investment. The current asset of the investment defines the level of the system’s economical development and gives the opportunity for predicting the volumes of the additional investments and their possible profitability, also to define the position occupied by the investor in the market in the future. Future (expected) investment asset is the oriental for planning whole investment process: from the definition of future volume of the investments till ruling the investment surrounding of the SES – for getting the needed income flow of the capital. Analyzing of these three consisting components of the investment business gives the investor information about the level of competition ability at the SES investment market, also the tendencies of its development and the activities for reducing market.

The wholeness of the investment attractiveness and investment business makes the investment surrounding for the country, region, field, corporation (existed in the manufacture). Though it is important also to reflect reverse connection, that is the influence of the investment surrounding upon the investment business. For example, the current position of the investment surrounding defines the investor’s ideas and his/her activities towards future investments. Improving investment surrounding in the current period gives the stimulus to the development of the competition held between the investors for getting the rights for investment. Also it gives the stimulus to the competition held at the commodity and service market, which helps the lowing of the prices and raising the quality of the production. Parallel to these, the inflow of the investment resources takes place, which gives an opportunity for rational and effective distribution of the existed resources to the ruling organs of the regional development. It reduces the disproportion in the regional development, improves the living social conditions in the region, helps the development of the infrastructure and communications, changes the situation in the investment surrounding according to the demands of development of the regional economy.

The interconnection and subordination between the participating categories of the investment process is represented by the scheme shown in the pic. 1.5.

Taking in mind the peculiarities of the investment process, it mustn’t only be based on the usage of administrative-regulating activities, but also the usage of those economical models, which prove the necessity of this or that activity.

1.6. Subject – matter of investment process and its main stages

According to the said above, the investment process is the successiveness of the stages, motions and operations of the investment business provision. The concrete flow of this process depends on the investment object. Consequently, the division of the investment process into the stages is provoked by the kinds of the investments. We speak, of course about the real and financial investments.

The investment process consists of two main stages; they are (1) making decision about the investments and (2) Realization and exploitation of the investments. It is adopted to divide the first stage into several separate phases (under types), which characterize the real and also financial investments. The quantity of these phases may be different, but three of them are the most typical: a) underlining the goals of the investments; b) definition of the investment direction and c) selecting the concrete object of the investments.

Goals and directions of the investment. In the process of getting decision about the investments different goals are defined and reflected. The ascending goals are the formal ones, which are in the future used as the criteria of selecting investments.  The formal goals come from the strategical firmness of the investment.

Working out the strategical direction of the investment business is connected with the defining equality of this or that form of the investments on the concrete stage of the perspective period and also with the definition of the direction of investment business including its branch consisting part. The priority selection of the investment forms at this or that stage by the investor is provoked by a number of inner and outer factors.

The functional direction is the most important from the inner factors, those are the basic kinds of the investor’s (manufacture, organization) activities. For example, basic direction of the investment businesses for the institutional investors is investments into the securities. The manufactures of the real sector of the economy, which perform the industrial activities, give priority, as a rule, to the investments into the material and nonmaterial assets.

The financial investment is realized mostly in the form of the manufactures’ (as concurrent, so partner ones) participation in ruling purchasing shared securities, or in the form of temporal placement of free money sources for speculative goals.

From other inner factors important role in selecting the investment direction is played by the strategical direction of the operational activity, size of the manufacture (organization), the stage of the investor’s vital cycle and others.

From the manufactures and organizations of the real sector of economy the growth of financial investments characterizes, as a rule, large-scale industries, which have more opportunity of finding the sources of placing funds into the investments, and those manufactures, which are at the stage of the so-called “ripeness”. More extended form of investments at the earlier stages is the investments in the material and nonmaterial assets.

Among those outer factors, which make an essential influence upon selecting the investment forms the most important are the rate of inflation and the percent rate formed at the financial market.

The formal goals may be the aspiration for increasing profit, widening the scales of the manufacture (activity), obtaining power and prestige in the society; also, solving the social-ecological problems, keeping and increasing the working places and so on.

These goals are not often defined distinctly, are not coordinated according to the priorities or are not verified at the subject of the ability of their realization. That’s why, it’s necessary to point out the real goal of the investments from the formal goals by establishing concrete purposed showings. For example, the formal goal – increasing profit – must be concretized in a number of showings, for which the definition of the achievement quality will be possible. Concretely, it may be the middle quantity of the profit for several years or the showing of net profit, or those other showings, which characterize the earned profit from the investment.

Formal goals of the investments make the decision of defining problems about investment directions easier. Mutual connected, independent and alternative (inter excluding) investments may also be among them.

Main stages of the investment process. According to the formation of investment portfolio, the investment process becomes importantly easier at the expense of reducing its stages. In the foreign literature dedicated to this problem, they differ following stages of the investment process:

1.  Selection of the investment policy;

2.  analyzes of the investment market;

3.  re-inspecting the portfolio of the securities;

4.  estimating the investment effectiveness.

At the first stage they define the investment goals and the volume of the necessary sources for its realization, also the quality of risk and profitability for every financial instrument. Selecting those financial assets of the potential kind, which may be included into the portfolio, fulfills this stage.

At the second stage, they concretize the rate of value of the securities’ separate kinds on the foundation of marketing conjuncture formed at the concrete moment and provide the prediction of the share rates’ dynamic of the concrete firm. Such kind of approach is called technical analyze. Basing on the got data they conduct fundamental analyzes. Its essence is analyzing the brought value of all those cash money flows, which is expected to get by the owner of the financial asset.

Third stage of the investment includes selecting concrete assets for the investors, also defining the optimal proportions between the assets in the bounds of investment capital. The bases of it are selection, selection during the operations and the diversification of risk according to total profile.

The fourth stage concerns the periodical estimation of the current portfolio according to the changing the investor’s goals and its deviation from the optimal portfolio. After this selling of the part of purchased securities and buying new ones become possible.

At the last stage they provide periodical estimation of the factual profitability and the level of risk and their comparing with the existed standards.

Main participants of the investment process and their functions. To the circle of main participants of the investments belong: state, regional and local organs of the government, manufactures and physical persons: they can participate in the process of investments from the side of demand and delivering.

In the conditions of the market economy the circle of the participants of investment process is importantly widened. The web of commercial banks, credit-commercial organizations, investment funds of companies and insuring companies have appeared, which make independently the investment decisions. But still, the state and governmental regional and local organs define their participation in the process of investments. It is represented by holding investment competitions, by selection and proving the investment projects, by licensing and quoting the production, and also by defining the quantity of the percent  rate and taxation. The financial activities of the state, the organs of regional and local government as from the demanding, so the delivering side, influences essentially upon the behavior of the financial institutes and market.

Main distributor of money at the financial market is the population, because it gives much more to the investment process, then takes. Of course, it will not be said about the organs and manufactures of the executing government.

The researches of the foreign scientists U. Sharp, G. Alexander and G. Bailey show, that wholly the state and manufactures are net consumers of the money sources, that is that they use more sources then give. More concretely, many large-scale companies for realizing their long termed aims need enormous quantities of money for building factories, buying furniture, working out new products and so on. Besides, by realization active and difficult strategies of ruling cash cash masses, they appear to be main purchasers of securities. Such a situation is created on the side of the state, regional and local governmental organs, the activities of which is connected with the capital investments and guaranteeing current expenses.

The organs of executive government fill the insufficiency of the money sources by producing debt commitments and obligations, and companies by producing shares and other securities.

The factors defining the consistence of investment project participants and fulfilled functions. The consistence of the investment project participants and fulfilled functions provided by them, are defined by the following factors:

-    the specifics of investment project, its volume, technological hardness and so on;

-    compatibility of functions by the participants of the investment project during the realization of the project;

-    financial status of the customer, who increases or reduces the influxing the financial structures in the realization of the investment project;

-    providing the customer with the best material resources, building materials, techniques, furniture and so on;

-    selection of the type of ruling the investment project (traditional or progressive).

Basic participants of the investment project. In the ruling the investment projects with the traditional type they differ its following basic participants: sponsors, constructor, distributor of the furniture, the consultant of insurers, legal adviser, the consultants of the taxation and financial branch, creditors and others.

Let’s discuss them in more details.

In a wide understanding, a sponsor is a guarantor; a physical or juridical person, who finances an economical project or a registration of social activities. Also, an orderer, an organizer of a large-scale project or arranger sponsor may be as commercial, so noncommercial structure.

As to the sponsor, as the participant of an investment process, we may call it an orderer, organizer, who connects then activities of every participant of a project, arranges discussions, analyses commercial suggestions of the constructors of financial structures or distributors, realizes marketing researches and selection of the financial partners. In the separate occasions, it becomes responsible for fulfilling such functions of the constructing engineering, as engineer-consulting service, projecting-construction and analytical-calculating works, preparing a technical-economical substantiation, organization and ruling of the manufacture, working out recommendations in the sphere of production realization. These reduce the quantity of the investment process participants.

Project-construction and construction organizations or individuals act the role of a constructor, that is the provider of the work. The constructor can involve other persons in the process of fulfilling the order, who become the sub-renters, and the constructor him/herself becomes the general renter. He appears to be the main fulfiller of the constructive lease agreement and is responsible the before the orderer for the fulfillment total complex of activities established in the agreement.

Distributor of the furniture represents the filial, foster companies or those other firms, which have signed at distributing furniture and providing services. If the manufacture registers an agreement with an orderer for a complex distribution of materials, building techniques and furniture to many of firms, it becomes the general distributor and answers for the whole distribution.

The insuring consultant is invited for displaying the insuring risk and estimating the quality of the project’s safety, also, for working out the appropriate recommendations. The juris-consult provides the preparations of the juridical documentation around the project, discusses wholly agreements and contracts.

The consultant of the branch of taxation questions analyzes the taxation situation existed in the country for realizing the project and also the taxation obligations of every participant, makes recommendations for minimization the taxes.

Financial consultant provides the selection of financial, credit and calculation conditions by combination of the alternative variant for the realization of the project. In the case of influxing foreign investors into the project, he must bring it to the appropriation with the existed international standards. This will make easier the status of the potential investors and creditors.

Creditors, as the participants of the investment process, lend money in different terms and conditions. Under these conditions, the creditor has a right of demanding from the debtor to return credit or fulfill other obligations. A state, bank, manufacture or a physical person, investment funds and others may be the creditors.

A traditional form of ruling the investment project, in the time of which the orderer carries out him/herself the functions of ruling, has several defects. First is that the most part of the orderers is not competent enough in every question connected with the project. It makes the level of the risk stronger during getting the ruling decision that gives rise to a number of expenses. Second one is that, the successful ruling, according to the experiences, requests the leader’s systematic participation in the investment process, because the orderer is not always able to do it. And third, this form of ruling the project is characterized by the comparative dispersion of phases and stages as in the time, so in organizing. All these gives rise to the additional problems in the provision of the s’ agreement of its every participant.

Overcoming the mentioned imperfection happens at the moment of moving to the progressive form of the investment project ruling. Its essence is that the leader (manager) of the project becomes the basic figure in the organization and ruling the investment businesses. This may be a construction or construction-projecting organizations’ especially prepared high-qualified specialist or an experienced leader. He/she provides a general ruling of the project including finances, personnel and the construction works.

1.7. Planning and selection of objects of investment process

The definition of re process of investment planning.  The final phase of the first stage of the investment process is the selection of concrete objects of the investment, which is fulfilled in the process of planning investments.

They, as a rule, call the process of investment planning the process of forming such a portfolio (investment program) of the projects, which may be discussed as one of the alternative and mostly desired variant for achieving the investment object. Mostly using the mathematical models, which have no ability at all of reflecting every factor of the investment business, provides the planning of investment. That’s why the results of modeling don’t provide making such straight decisions, which would be the guarantee for the achieving the set object. The manufacture’s operative management basing on the results of planning and taking in mind other non-formalized factors provides getting the final decisions about those concrete objects of the investment, which must be included into the investment program of the manufacture.

The investment model is called such a mathematical model, with the help of which it is possible to estimate the effectiveness and resulting of the investments, as towards the set objects, so towards the sources for reaching it.

We must take into account the fact, that the real investments together with achieving the set objects cease quantitative changes as in the material-technical, so in the financial spheres. As to the financial investments, they are separated and touch mostly upon the financial side of the manufacture’s activities.

The investment business also may be isolated (separated) and interconnected. In the first case, in the process of investment business they discuss only alternative variant. Mutual connected investment planning also takes in mind the alternatives of getting decisions in the spheres of financing and organization. So the subject of isolated planning is working out the investment program. In the second case, the aim of the planning is industrial sphere wholly.

Any planning means distinctive period, during which the fulfillment and realization (exploitation) took place. This period is always reduced. It must be mentioned that the subject of investment planning terms is always conflicting. Basic question of the discussion is the ability of correcting the decisions under the influence of the phenomenon happened after finishing the planning section. Though this is a just demand the definition of the future investment decisions’ influence is possible only after these investments are realized.

Periods of the investment planning. In the process of investment planning, they divide the terms of planning into the intervals, which are called periods. The realizing decisions of one period are belonged to the beginning of end of the appropriate period. It’s important that this is not reflected at the conceptual side of the investment decisions and influences only the numbering of the period. Got results from the realization of the investments are expressed by the taxes, which are divided into delivery (for example, paying off the other industrial subjects by the investor) and incomes (for example, paid fee to the investor by other industrial subject).

The total sum of the payment during the concrete period equals to the sum of the realized delivery and incomes. If their balance is positive – that is the income overcomes the delivery or on the contrary.

The quantity of those periods during which the income-delivery of the sums takes place, is called either the term of the investment exploitation (in the case of the real investments), or the term of action (in the case of financial investments). This portion of time is either defined beforehand, or discussed as alternating quantity (at the time of getting investment decisions). The freed invested sources are called commonly disinvestments.

In the system of investment planning, the goal of the capital investment in this or that period of time may be the growth of property, increasing the income flow, making the investment profitableness higher and other showings, which characterize the ability of getting prolonged profit.

In the investment models of the planning, the volume of capital investment may change in the definite period of time, for which the plan is working out. During getting decisions, the priority is given to those projects, which guarantee the incomes from the realization of the investment in shorter time. Combination of the payments flow in this or that period of time is realized by the discount method.

Isolated planning of the investments. The isolated planning of investments is realized during the given budget toward the separate investment objects or the separate investment programs. The term of the investment (investment projects) exploitation may be discussed as a alternating or fixed parameters. The market of capital may be improved and also not improved. The separation of these markets is carried out by usage of distinctions between the percent rates of deposits and credits. Number of limitations of the financial resources in the isolated planning system may be belonged to any period of planning.

1.9. Interconnected planning of investments

Interconnected investment planning. The interconnected investment planning is realized in tight relations with planning the industry-financial activities. This relation is based on the complex formation of the cash flow taking in mind the fact, that like every activity the realization of every investment project needs the financial provision. This means that in the process of realization of the investment program, it is important to balance its financial parameters with the industrial and financial parameters of the manufacture, also, taking in mind the possible reductions. We mean, firstly the potential of own investment resources, the possibility of influxing loan capital, necessity of branch and regional diversification of the investment businesses, also, provision of effective balancing of inner balance, that is profitability, risk and liquidity of investment businesses.

The system of interconnection planning means the existence of many criteria during the selection of investment projects. It is based on ranging the goals and aims of the investment businesses in the system of the goals of business leading, according to either time, or meaning.

The differentiation of the criteria of investment projects’ selection takes place, as a rule, in the section of concrete forms of independent, inter-exclusive (alternative), and interconnected investment projects. Ranging of the goals requests the raging of criteria too. Usually, they use criteria of the net brought values and inner percent rate (inner profitableness) mentioned above, as basic criteria.

During the interconnected investment planning the system of reduction concerns basic and additional reductions. Basic reductions are the most important criteria of the selection. For example, if established basic criteria of the selection of investment projects are the showing of the project’s net brought value, the basic reductions may represent concrete meanings of the following showings: inner percent rate, the total risk level of the project, the terms of repurchasing the investment project and so on.

The additional reductions may be: the level of diversification of risk at the expense of regional and branch consistence; the value of the borrowed capital; the terms of realization of the investment projects; the size of the total volume of investment resources; the volume of the production and realization of the product and so on.

The realization of real projects. The concept of the second and third phases is essentially different from the real and financial investments, and it is stipulated by the peculiarity of their realization.

In the modern conditions the real investment is the foundation of investment businesses of the most manufactures. The realization of the real investment is characterized with a number of peculiarities; we can separate following ones:

1.  the real investments are straightly connected with the basic activity of the manufacture, the widening of the assortment of the production and improving its quality with the help of involving the achievements of the scientific-technical progress. In other words, investment business and real investment processes are connected and condition each-other;

2.  the real investments, relatively to the financial investments, are followed by bigger economical risks, which, in its turn, means the ability of providing higher profitableness relatively with the financial investments. Economical risks are connected with the peculiarity of the technological processes, factors of the material wearing out and so on;

3.  Real investments are less liquid relatively with the financial ones. The reason for this is a tight purpose of most of the investments in the real industry and very often absence of the abilities of alternative industrial usage. That’s why it is extremely difficult to compensate mistakes made during getting decisions about real investments.

The forms of realization real investments. Real investments are realized differently by the investments in the in the basic capital, capital investments in the turnover assets and investment in nonmaterial assets. The realization of the capital-investment, in its turn, happens in several forms and, firstly, it is building of new manufactures, reconstruction of the existed ones, modernization, technical re-equipment, and also, purchasing total prosperity complexes.

Purchasing total prosperity complexes is the prerogative of the largest companies with such a policy, which is directed towards increasing its influence at different markets. Real investments of this kind guarantee growth of the total value of the manufacture’s assets, which is conditioned by the growth of abilities of financial potential and joint usage of the system of materials, reducing the level of the manufacture expenses and so on.

New building, usually, is connected with the investments in such modern manufactures, which increases the labour production and satisfies the request of the ecological security, also, means the building of new objects.

Reconstruction in the most cases requests moving to the modern technologies of the industry taking in mind the achievements of scientific-technical progress. As a rule, it is connected with the involving of the resource economizing technologies, moving of the production to the modern standards of the quality and so on. The reconstruction may touch upon the building of new objects.

Modernization mostly is connected with bringing to conformity the active part of the basic funds to the modern requests of realization the technological processes.

Technical re-equipment touches upon the changing and purchasing new furniture, mechanisms and basic complexes of the technical system for effective realization of the technological processes. It is not always possible to put a sharp boundary between technical re-equipment and modernization.

Investments in the turnover assets as a rule, serves for widening the turnover funds used by the manufacture. In the most cases it is realized following the capital-investment realization and this essentially is the result of realization capital-investments.

Investments in nonmaterial assets generally mean innovational investments and realized in two basic forms:

Ready scientific – in the form of given patents of technical production, scientific achievements, inventions, commodity marks and so on; With the help of independent machining of the scientific-technical production.

Most part of the real investment forms and kinds – the turnover assets, excluding the innovations of separate kind of the furniture, mechanisms and so on, – are realized in the face of real investments having appropriate business-plans.6 In the business-plans of the investment projects together with the traditional section the subjects of providing the needed level of liquidity of the real investment objects and minimizing the level of investment risks must be worked out and shown.

Organization of the investment project realization. For preparing the organization and realization of every needed plan documents, as a rule the leader is appointed. The most important plan documents are the calendar plans of the projects and their capital budgets.

The calendar plans are made for definite period of time – year, quarter, month or decade. The data of terms and volume of the realization the separate kinds of activities foreseen by the investment project are represented in them. The terms and character of the activities define the quality of detailing the calendar plans.

Fulfillment of the calendar plan is straightly connected with financing the activities of the investment project. For this purpose, the financial plan is worked out, which, usually is called “the capital budget of the investment project”.  The volumes, terms and sources of the financing any kind of activities considered by the project in the section of separate phase of the calendar plan are substantiated and established in it.

Capital budget consists of two sections: capital expenses of the projects and influxing the needed sources for its realization. The capital expenses are the specified estimation of initial volume of the investment expenses taking into account the reserve of those financial sources, which are needed for recovering unexpected expenses according to the calendar plan.

The section of the “source influx” of the capital budget is the specification of volume of the investment needed resources for the project realization in the section of own sources of the investor, influxed sharing capital, leasing, banking credits and so on.

The synchrony of the income of the sources and the volume of investment expenses must be provided in the capital budget for realizing the works foreseen in the calendar plan.

Briefly about the investment risks. An important element of the project’s calendar plans and systems of sustaining capital budget taking into account the factors of the investment risk and working out the activities for their neutralization. The investment risk, as a rule, is discussed in the prism of possibility for getting unprofitable financial result. The forms of its displaying may be loosing the planned investment income or shortage for vagueness in the realization of investment projects. The investment project risk is a complex concept and units those various kind of risks, which are connected with the realization of investment projects.

Every stage of the realization of investments is characterized specific kinds of risks. That’s why estimation of whole risk of the project is provided on the foundation of aggregated facts according to the separate stages.

The realization of any investment project is in its essence a unique phenomenon for even one-typed projects. This circumstance makes the individual approach necessary, taking into account the specific information, which is connected with objective and subjective factors of occurring risks during the realization of the investment processes. The long is term of the project realization; the bigger is the vagueness of final results of its realization and, consequently – level of the risk.

We mist take into account the planned size of the cash incomes to get from the investment project depends on future status of appropriate segment of commodity market and effectiveness of commercial activity of the manufacture. It means that the investment risks are greatly conditioned by the commercial risks of a manufacture. In other words, there is a straight connection between the length of the vital cycle of the project and level of the investment-projecting risk. The completeness and trustworthy of the gathered information about every stage of the project’s realization, the level of qualification of the investing management defines greatly the substantiation of taking into account the various factors of the different types of risks.

The kinds of investment risks.Let’s name the basic kinds of the risks of investment projecting taking into account the specific conditions in Georgia.

The risk of inability of paying is in important connection with fulfillment of state obligations of the partners in the business, also, lowering the level of liquidity of the turnover sources.

The risk of financial provision of the project is connected with the late influx of the investment resources from the separate sources, the danger of incomplete financing because of increasing the value of the capital, which is needed for the realization of the project. It is in a straight correlation with the risks of inability of paying and inflation.

The risk of financial infirmity of the manufacture. It is characterized by the flow of invested own and borrowed capital and the incomes conditioned by the investment project and unbalancing of the flow of payments. This risk, together with the risk of the inability of paying is one of the most provoking reasons for bankruptcy of the manufacture.

The risk of inflation is connected with the possibility of devaluation of the expected incomes from the investment project and raising the value of capital expenses expressed by the nominal price. In the modern conditions the risk of inflation has permanent character and touches upon most parts of the operations of the project’s realization. Solving the problem of its taking into account and softening neutralizes this permanency.

The percent risk is related with the risk of inflation. It has own specific in Georgia, which is conditioned by the peculiarity of formation of the financial market and its being not developed.

The marketing risk is the risk of getting incomplete income from the investments on the stage of the project’s realization conditioned by the active circumstances at the expense of the volume and exploitation of the realization. The long are the terms of the project’s realization, the higher is the possibility of this kind of risk.

The criminal risk is conditioned, at the first place, by the absence of the appropriate defense of the rights of the investor’s privacy that appears in the economic of our country the most often.

For neutralization of the possible negative results of the investment projecting risks various measures and arrangement are worked out, which are grouped into the inner and outer measures. Inner measures of the neutralization of the risks concern the foundation of the various insurance and financial funds (reserves) and working out such measures, which will suppress possibility of raising this or that risk. This may be refusing using the low-liquidated assets and the borrowed capital of the important volume, also the mechanism of transferring the risks following the separate operations to the partners.

Foundation of the insurance and financial funds means the reservation of one part of the investment resources for getting over those unexpected negative results, which are not related with the actions of personnel and contractors of the manufacture. Of course, wasting of the part of the own sources of a manufacture, or, more concretely, “freezing”, makes important getting the loan at the market of finances for filling it, that makes the dependence on the outer sources of financing the investment projects stronger.

The outer methods of the neutralizing the projecting risks, in the first place, is insuring the project risks of separate kinds and guaranteeing by the third person. The object of the insuring is the property of the manufacture, which is used in the process of investment process; the responsibility of the manufacture and its personnel towards the third persons; insurance of the participants of the investment project’s realization. The mechanism of guaranteeing is oriented firstly towards the protection of the investors’ rights in case of changing the investor’s conditions.

The peculiarities of realization the financial investment. For the manufactures, which are not institutional investors, the basic direction of the investment business is the realization of the real investments. Herewith, when the conjuncture of the financial market gives the ability of getting significantly higher level of profitability at the invested capital, then the operation activity at the commodity market (the formed situation at the market of securities in Russia in 1995-1996 is a good example of this). Also, in case of existence of temporary free financial resources, the manufactures actively invest sources into the high liquidate financial instruments. Except this, the manufactures invest own capital other manufactures’ regulation funds for diversification and ruling other companies and organizations.

From the economical point of view, the financial investments are such instruments, with the help of with the solving the strategical and operative problems of effective placement of the capital in the country and abroad. The financial investments are mostly realized in the manufactures in the time of having free money sources. They appear in the face of outer investments (except the occasions, when the manufactures expiate their own securities, for example shares).

The most part of the manufactures realize the financial investments for the purpose of getting additional investment income (speculative income) from the usage of the free money sources. The concrete choice of the concrete instruments of the financial investments is wide enough even in the conditions of already formed market.

The level of profitability received from producing the investments into this or that instrument is in the straight relation with the level of risk. Higher is profitability, the higher is the risk of financial set-back.

The portfolio of the financial instruments. In the purpose of getting the desired level of profitability of the financial investments and the diversification of risks, the enterprises (investors) purchase financial instruments with different levels of profitability and risk, that is, in other words, they create the portfolio of financial instruments of specific character.

For the changing character of the conjuncture of the financial market, the process of getting desired level of the profitableness requests permanent monitoring of the various instruments’ profitability, risk and liquidity and also making the appropriate ruling decisions related with changing the portfolio of finances; it means the reducing or increasing the share of this or that financial instruments. Such kind of correcting is called “the restructuring of the portfolio”. It is the basic concept of the financial instruments’ operative ruling in the manufactures.

Basic financial instruments of the speculative portfolio of the finances the shared and debt securities, also, deposits and the currency valuables. During the monitoring process, depending on the type of the financial instruments, they take into account and analyze a lot of factors, which influence upon the levels of their profitability, liquidity and risk. From the factors which negatively influence upon the profitability of the shared financial instruments, the most important are:

· growing the level of taxation of the emitenti manufactures’ investment profit;

· the conjuncture changing of the volume of emitenti companies’ selling (it especially touches upon the oil companies);

· reducing the level of dividends for reducing the volume of the profit;

· reducing the price of net assets of the emitenti manufactures;

· speculative games of the participants of stock market.

The growth of the percent middle rate at the market; increasing the level of inflation; increasing the level of taxation of emitenti manufacture’s investment profit; degradation of the level of financial firmness of the manufacture; degradation of the pay ability of emitenti manufacture belong to the factors, which reduce the level of liquidity of the debt securities. The level of registration rate of the central bank; the firmness of the national currency; financial stability of the institutions of the deposit kind; changing of the percent middle rate at the financial market make and essential influence upon the profitability, risk and liquidity of the cash instruments.

According to the results of the investment market monitoring, they display the separate instruments of the speculative investments and also the tendency of the levels of profitability, risk and liquidity of the whole portfolio. Based on the received information, they make decisions about the necessity of the portfolio restructuring and its direction.

The investment resources during realization of the financial and real investments are used as in the cash, so in the natural form. The formation of the investment resources of the manufactures is connected as with the manufacture itself, so with the processes of gathering and keeping, which take place in the whole country. The rates and scales of the keeping and gathering the investment capital are conditioned by the level of the country development and also the level of the population’s profitability.

The process of formatting the investment resources in the manufacture is permanently working in the face of the incomes received from the basic activities and the activities not for realization, also by taking loans and others. The concrete quantity of those sources, which are used either for the investments, or the consuming needs, are defined by the finance-industrial plan of the manufacture. it depends greatly upon the values of their influx, the growth of the manufacture’s capital and its structure. If a large portion belongs to the sources in the structure, then the abilities of loaning are reduced. At the same time, the value of additional resources influx increases because of increasing the credit risk.

In the system of effective planning of usage and analyses of the financial resources it is very important to point out those various groups of the investments, which differ in specifics and request the usage of the adequate methods of ruling. They differ several characteristical features, with the help of which the classification of the investment resources takes place. 

Read the papers today, and you’ll feel like start-ups are a rare breed in 2009. Many sources say less people are starting up companies, albeit successfully too – citing the lack of investors available as one of the top reasons. But perhaps they are not looking in the right places.

A paper in Philadelphia (Philadelphia Inquirer & Daily News) recently did a story in which a start-up CEO almost seemed to feel like securing angel investment was easier in this market than before. And it makes sense, since less competition combined with more places to look for funding make this a good time for companies to secure investment.

It is true that angel investors are becoming more cautious, and one will need a strong, convincing business plan (or some already existing activity) in order to secure such funding, but this has always been the case. However, sites such as the Mid-Atlantic Investment Network help potential entrepreneurs and existing start-ups alike find more channels in which to reach these investors.

Many companies will look to raise “Seed Capital” from a wide variety of courses, including friends and family. But the Mid-Atlantic Investment Network allows members to look beyond that, with the ability to broadcast your plans to other potential investors online.

While technology remains one of the top niches in angel investment (such as the recent development by an entrepreneur in Maryland to develop software that uses facial recognition technology to determine who can see the content on-screen), other fields are also attracting entrepreneurs and angel investors these days. Our network has active investors and entrepreneurs in fields such as Real Estate, Retail, Business Services, Transportation, Health Care, Entertainment, Agriculture and more.

A wide range of investors are members, including various angel investors from within Mid-Atlantic regions such as Delaware, Maryland (including Baltimore), Pennsylvania (Philadelphia, Pittsburgh, etc), Virginia, West Virginia and Washington D.C, but also features investors located across the country and internationally.

Join the Mid-Atlantic branch of the Angel Investment Network today and find someone to help get your business off of the ground.

During the current economic climate, there are factors that entrepreneurs look at more closely when it comes to starting up a business.  The “where” and “how much” factors become a bigger part of the decision, as one looks to trim any unnecessary cost factors.  Gone are the days where if you were technology based, you’d set up in Silicon Valley or if you needed to network with business contacts – set up shop in New York.  Ironically, thanks to modern day technology, you can set up in a much wider range of locations.

Entrepreneurs look at factors like the ease of recruitment, and as a result – have looked into the central states of the US, such as Colorado, where the workforce is well educated, quality of life is good, and cost of living is a big step lower than on the coasts.  

With hopes up about stabilisation of the economy, this is a great opportunity for aspiring entrepreneurs and small business start ups alike to take things to the next level.  Over the last few years, several angel groups and individual investors have started to set up shop in cities like St. Louis (such as the Arch Angel Investor Network), again bucking the general trends.  

On the Central Investment Network – entrepreneurs in the Central states of the US get another chance to connect with angel investors.  Members can get their business ideas and plans out to hundreds of local investors – and since Central Investment Network is part of the Angel Investment Network, members can connect with thousands of other investors from around the world.  In fact the network grows continuously, with branches in over 40 countries and investments occurring both on a local and international basis.

Of course, the plans have to be well thought out and organised, as while entrepreneurs may have less competition, the investors are also more choosy.  Still, there are signs that more successful angel investment strategies such as venture capital investments are occurring within the central states.  While some venture capital backed companies have gone bankrupt this year in the U.S, almost all of them are California based, and none of them are in the states that the Central Investment Network covers – which includes Colorado, Kansas, Missouri, Montana, Utah & Wyoming.

Find out more, by visiting http://www.centralinvestmentnetwork.com

a remake of my previous “how to make money investing” video – I was trying to be “edgy” in the other one but it came out as too obnoxious.

Find More Investing Articles