The best investment methods: the best investment funds



Investment means raising funds in economic, cultural and also social projects, with the aim of achieving a modern capital entrance, with a view to raising capacities in production or modernizing and returning old capital.
As the investment can be divided into several types, including:
In terms of means: There are direct and indirect investments.
- In terms of its economic motives: government investment, that is, state investment, and there is private investment, which is known as private sector investment, in addition to foreign investment, which is known as foreign investment, which was considered an important source of financing economic development projects.

 The best investment methods: the best investment funds


The investment decision is considered one of the most important and most serious decisions taken by the bank’s management. It affects the bank’s survival, continuity, and growth. There are multiple investment assets with banks, and they differ in their terms in order to achieve three main goals, namely liquidity, income, and the combination of liquidity and income (safety), and therefore the investment portfolio in the bank contains a variety of [[legitimacy] Dealing in the stock market : the ruling on dealing in the stock exchange |]] which is:

1. Direct investments,
which are intended for the bank to participate with others in establishing projects from the beginning, participating in studying its economic roots and promoting its idea, and contributing to its shares, and thus the bank contributes to the revitalization of the stock market, by participating in adding new projects and attracting new investors to the market .
2. Investing in government
securities, which are the bonds that the state offers to subscribe for the purpose of financing some projects, instead of borrowing from abroad. This type of bond has a guarantee as it is guaranteed by the state, and the degree of risk in it is low if it is almost nonexistent, Therefore, we find that the return on these securities is low compared to some other securities.

3. Shares Shares
are divided into the following:
a. Ordinary shares A common stock
can be defined as a security that has a nominal value, and a market value that may be completely different from the nominal value. This security represents an instrument that establishes the right of its holder or owner to own a portion of the assets of the establishment, and obtain it after paying all debts and obligations that the establishment has Before others.
Owners of ordinary shares enjoy a set of rights represented in obtaining part of the profits achieved by the company according to conditions determined by the company, such as the condition of achieving the profits, and the company taking a decision to distribute the profits, and they have the right to elect the members of the board of directors and delegate their representatives to exercise the right to vote And they also have the right to see and review the company’s records and books.
B. Preferred Shares
The preferred stock is a security that has a nominal value and a market value, and the holder or rights are determined to outweigh the rights and privileges of the ordinary shareholder, so the preferred shares are distinguished by obtaining profits before the ordinary shares, and the preferred shares are determined by a percentage of the profit, they are similar to ordinary shares On the one hand, and bonds on the other hand, as they resemble ordinary shares by giving them the right to vote and owning a portion of the company's assets, and the bonds are similar on the basis that they have a fixed cost and may be of limited duration.

4. Bonds
The bond can be defined as: a security with a nominal value, market value, rate of return on the coupon and maturity date, and the nominal value of the bond is the fixed and written value on the face of the bond, which is the value paid by the borrowing establishment under the bond to the owner of the bond according to the agreed schedule of consumption of the bond or when The due date of the bond.
The bonds are characterized by the stability of the periodic return. They may be government bonds, which are issued by the state and offered to subscribe to obtain the necessary financing to pay the budget deficit or the financing of some projects, for example examples of treasury bills. It may be non-governmental, which is issued by business establishments, and is relatively exposed to the risk of non-payment to a higher degree than government bonds. It also has a higher return than government bonds.

 The objectives of investing in commercial banks


Banks seek its investment operations to achieve many goals, it can be the most important to clarify briefly the following are :
O_ achieving additional revenue for banks: The banks employ some of the money their surplus after detention necessary to meet the withdrawals expected to depositors funds, as well as to meet the borrowers demands, in various areas of investment Instead of leaving it idle to them without operation, and this achieves profits that allow it to expand the performance of the new banking services, and cover some of the costs that it incurs.
B_ Supporting liquidity in banks: Banks are able to secure their liquidity status by maintaining reserves that are convertible into cash, as securities of various kinds can be easily converted into money in a short time. Banks, with the available securities in their possession, can support their liquidity and provide a measure of them by borrowing from the central bank by guaranteeing these securities.
C - Facing the risks of banks' exposure to crises: Banks can, through their retention of securities portfolios, face the risks of exposure to crises, as some of these securities can be sold as soon as possible in the event of the bank's exposure to a financial crisis, thus compensating part of the loss.
D_ Achieving the interest of the national economy: Banks contribute to financing the economic development plan and meeting the needs of government spending, by subscribing to government securities, and they also contribute to achieving economic development by subscribing to shares of new companies that are offered for public subscription.

 Factors affecting investment policy in commercial banks


There are many factors that determine and influence to one degree or another the investment policies of commercial banks, and these include the following:

1- The size and structure of the depositor: Whenever the deposits are stable and are characterized by their longevity, they give the bank more freedom to employ these deposits in long-term financial investments. The bank focuses on investing in short-term securities.
2- Legislative restrictions: The policies and legislations drawn up and issued by the state affect the investment policies of the bank, such as setting a certain percentage as a maximum of the bank’s ownership of the shares of joint-stock companies. 3- The state of the stock market: The policy of financial investment in commercial banks depends to a large extent on the effectiveness of the stock market, it is through this market that securities are exchanged in organized markets, including the stock exchange that allows commercial banks the opportunity to diversify their investments and reduce the size Taking risks, in addition to securing liquidity for them.
4- The size, quality and diversity of the offered securities: The more the size of the issued securities, as well as the quality and quality of the issued securities, the more this will lead to the non-restriction of investment policies, which leads to diversification of investments to reduce investment risks and form effective investment portfolios.
5- Efficiency and experience of employees in the bank’s financial investments management: To form effective investment portfolios requires relying on highly efficient experiences and skills so that they can achieve the largest possible return under the lowest possible risk.
6- The bank’s management philosophy: The management philosophy means the direction of banks in investing their money in various investments.

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