The special importance of investments in a market economy

The value of investment in a market economy is reflected in their definition. Indeed, ordinary money resources, bank deposits, shares, shares and other securities, as well as machines, technologies, equipment and licenses can be included in them. We should not forget about property rights and intellectual values that can be invested in any object of entrepreneurial activity in order to profit in the future and achieve a high social effect. Investments and their role in the economy are determined by their financial definition. This, in essence, is the assets invested in economic activities to generate income.

With the help of economic definition, investments are represented by costs associated with the formation of fixed and working capital. Any changes that have occurred in inventories can be explained by movements in expenditures on fixed assets. The value of investments in a market economy is visually displayed in the process of investing certain funds in various forms, which is inextricably linked to obtaining any effect or simply income. Investments, first of all, are a resource, the use of which contributes to the achievement of the intended result.

Thus, the role of investment in a market economy is reflected in close interaction of the two sides of investment activity: resource costs and results. In this case, the lack of the desired result when using the investment shows their uselessness. The importance of investment in a market economy is confirmed by the use of certain financial means in the form of capital investments of various types (short-term or long-term). Investments can be made both by legal entities and individuals. The following kinds of investments are known from the special literature : venture, portfolio, annuities and direct.

In Russia, the importance of investments in a market economy can not be overestimated. So, investments can be made at creation of the subjects of managing with participation in the equivalent equivalent of the foreign capital. The main problem of modern domestic business is insufficient incentive to attract foreign capital. Therefore, today it is considered relevant to consider two issues: in which sectors the attraction of borrowed funds should be limited and in which spheres the inflow of additional capital should be implemented first. Foreign investments can be attracted in the form of direct and portfolio "injections" of cash.

Another direction of the inflow of additional capital is loans and borrowings. In the financial market there is also such a thing as real investments, represented by capital investments in real estate, land, equipment, machinery and spare parts. This type of investment may also include working capital costs.