Investment management: investments in real estate and private business

Investment management manages an investor's assets to obtain maximum profit with minimum risks. The investor or a professional trustee can carry out this activity.

The main task is to create and manage a portfolio of investments that would meet the investor’s goals and provide maximum returns for a given level of risk. For this purpose, various strategies, methods, and tools are used, such as:

• diversification;
• risk and return analysis;
• analysis of financial reports of companies;
• technical and fundamental analysis of markets, etc.

Investment strategies

Investment management strategies can vary and depend on the investor, their goals, level of risk, and the current market situation and economic conditions. Some of the most common investment management strategies include:

• Diversification is a strategy that involves allocating an investment portfolio among different types of assets, such as stocks, bonds, real estate, cash, and others, to reduce risk and maximize returns.
• Active management involves actively seeking and selecting investment opportunities that outperform market returns. This can be achieved through analysis of company financial reports, technical and fundamental analysis of markets, and other methods.
• Passive management replicates a market index or a particular sector of the economy. This can be achieved through investing in index funds or other passive investment products.
• Yield strategy — choosing investment products that provide a stable income, such as bonds or dividend stocks.
• The growth strategy is to choose investment products that can provide high returns but also have a high level of risk, such as stocks of young companies or new technologies.
• Protection strategy — the point is to protect the investor from risks in the market, for example, through gold or high-quality bonds.
• A «buy and hold» strategy is a method in which an investor buys and holds assets for an extended period, even during periods of market volatility, in the hope that their value will increase over time.
• Investing in assets with high liquidity — an investor chooses assets that can be quickly sold at a reasonable price if needed.

These are not all possible investment management strategies; an investor can combine different approaches to achieve their goals.

Investment management tools

Investment management tools can vary depending on the investor’s goals and strategies and the characteristics of a particular investment product. Some of the basic ones include:

• Stocks — investors can receive dividends and share price appreciation.
• Bonds — generate income in the form of interest payments and can be bought and sold on the market.
• Investment funds — investors can purchase shares in an investment fund and receive income from its investment strategy.
• Indexes — investors can invest in indexes using futures or options to earn income from price changes.
• Cryptocurrencies — investors can buy and sell cryptocurrencies on exchanges and earn income from price changes.
• Real estate investments — investing in commercial or residential real estate to earn rental income or a profit on the sale.
• Alternative investments — for example, investing in unique assets such as works of art, collectible coins, and other alternative types of assets to earn income.

Investing in private business and real estate: pros and cons

One of the main advantages of investing in private business is the possibility of obtaining higher returns than traditional investment instruments such as bonds or the stock market. Investors also have the opportunity to contribute to the development of a particular business and influence its success.

However, investing in a private business also involves risks, such as instability of returns and the possibility of losing the investment if the project fails or the company goes bankrupt. Therefore, it is essential to carefully assess all risk factors and make an informed decision about investing capital.

Various tools can be used to invest in private businesses, such as direct investment in company capital, issuing a loan or buying bonds, and using funds and investment platforms.

When it comes to real estate investments, they can be an attractive option for generating income because real estate is a tangible asset (a type of asset that has a physical form and can be touched, used to generate income, or preserve value in the future) that can be rented out or sold over time, allowing for rental income or property appreciation. In addition, investing financial resources in real estate can be used as a hedge against inflation because real estate prices tend to rise over time.

However, investing in real estate also has its disadvantages. For example, it requires significant financial expenses because the purchase of real estate can be expensive, and there may be additional costs for maintenance and repairs. In addition, real estate investments are not liquid, which means that selling the property may take some time and require other expenses for legal services.

Trust management of investments

Investment trust management (ITM) is the process of managing a client’s financial assets, whereby you entrust the management of your funds to a professional manager (trustee) who makes decisions on your behalf and for your account. The goal of an ITM is to achieve maximum returns, considering all risks.

A trustee, working on your behalf, develops an investment strategy based on your investment objectives, risk profile, and other individual factors. He or she selects financial instruments, buys and sells securities, rebalances the portfolio, and monitors performance.

The advantage of ITM is that you get professional management of your investments without the need for independent study of markets and financial instruments and constant monitoring of the investment portfolio.

Investment consultation from SPM Real Estate

Investment consultation is a service provided by professional advisors, such as SPM Real Estate, on investment matters. Advisors help clients make informed investment decisions and provide information about investment opportunities and risks.

We provide investment consultation, which can include various aspects of investing, including:

• Assessment of risks and returns on investments.
• Analysis of markets and choice of investment instruments.
• Development of investment strategy and investment portfolio.
• Evaluation of financial objectives and investment budget planning.
• Assessment of tax and legal aspects of investments.

Investment consultation can be helpful for investors with extensive experience as well as for those who are new to investing. SPM Real Estate specialists will help you get qualified assistance in making investment decisions.

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