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What are the types of international investment
Release time:2023-05-17      The number of clicks:77

Based on the length of time, international investment can be divided into long term investment and short term investment.

Short term investments refer to securities investments that can be realized at any time and held for no more than one year, as well as other investments that do not exceed one year. Short term investments mainly utilize securities such as bonds and stocks for investment, which have the characteristics of low investment risk, strong liquidity, and low yield.

Long term investment refers to securities investments that are not ready to be realized at any time, held for more than one year, and other investments that exceed one year. Long term investments can be made in the form of cash, physical assets, intangible assets, securities, etc., which have the characteristics of high investment risk, poor liquidity, and high returns.

The division between external long-term investment and short-term investment does not entirely depend on the length of the investment period, but mainly on the purpose of the investment. Securities and other assets that cannot be realized at any time within a year are usually used for long-term investments, but marketable securities that can be realized at any time can be used for short-term investments as needed.

In practice, there are two situations where long-term investments can be converted into short-term investments:

(1) Temporal transformation. As time goes by, the maturity date of long-term investments gradually approaches, such as long-term investments that mature within one year, which are actually short-term investments.

(2) Managerial transformation. During the long-term investment period, if the enterprise urgently needs funds or discovers a deterioration in the financial condition of the invested unit, continuing to carry out long-term investments will incur significant losses. If the enterprise changes its investment purpose, it can quickly realize the long-term investment.

2. Based on the ownership of investment and management rights, international investment can be divided into International Direct Investment and International Indirect Investment.

The difference between direct investment and indirect investment:

The basic distinguishing mark is whether the investor can effectively control the foreign enterprise as the investment object, that is, the effective control over the foreign enterprise.

The nature and investment process of international direct investment are more complex than that of international indirect investment.

The nature and risk of investors obtaining returns vary.

3. Based on the source and purpose of capital, international investment can be divided into public investment and private investment.


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