Page 8 - Introduction To Investment Management

1.1 INTRODUCTION

Investment is an important aspect to

nourish and strengthen the economy either Investment:
The purchase of a financial assets
individually, small groups and national level of with an expectation of favourable
future returns. In general terms,
management resources. In this matter, we
investment means the use of money
in the hope of making more money
often see that the investment will be
in the future.
associated with the ability among individuals
on returns they made based on potential risks

for each investment or portfolios that are formed.

In general, investment may be referred to the ownerships of physical and financial
assets. The physical assets might consist of investment and ownership of property

(including buildings), machinery, technology and any forms of visible sources. Meanwhile,
financial assets are comprised of shares, bonds, trade notes’ ownership and other

possession of financial assets.

Although we tend to measure the wealth of economy by referring to the capacity

of national production, infrastructure development, services and sophisticated
technology wealth, where all of these are focused on physical assets. However, indirectly,
it cannot be denied that the financial assets also make a contribution in physical assets

existing. For example, in the establishment of a national car production, require a huge

allocation of funds to finance the project. Therefore, companies should consider the
alternatives whether using existing capital provision, issuing new shares, bonds or by

using financial instruments available in the market to finance the project. This shows that
financial assets play a significant role in the existence of visible (physical) assets.

Figure1:Relationship between Financial Asset and Visible Asset

Financial Assets Distribution of fund/capital Visible Assets
i.e. Bonds, i.e. Buildings,
Shares etc machinery etc

Returns & Risks

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