Investment Models





  • India has achieved impressive GDP growth of over 7% per annum in the last few years. however, sustaining growth at over 8% per annum will require a significant increase in investment levels in the economy-from approximately 30% of GDP to about 34% of GDP. 
  • Over the next 5 years, this translates to a cumulative investment of over $ 3 trillion. India needs to evolve an investment strategy that could enable it to achieve this investment goals. 
  • While expansion of domestic investment is essential to achieve this goal, FDI, which has been seeing slow growth in the recent past, also needs to be increased significantly. 






INVESTMENT


  • Investment implies the production of new capital goods, plants and Equipment. John Keynes refers investment as real investment and not Financial investment.
  • Investment is a conscious act off an individual or any entity that involves deployment of money (cash) in securities or assets issued by any financial institution with a view to obtain the target returns over a specified period of time.
  • An investment involves the choice by an individual or an organization such as a pension fund, after some analysis or thought, to place or lead money in a vehicle, instrument or asset, such as property, commodity, stock, bond, financial derivatives (e.g. futures or options), or the foreign asset denominated in foreign currency , that has certain level of risk and provides the possibility of generating returns over a period of time.
  • When an asset is bought or a given amount of money is invested in the bank, there is anticipation that some return will be received from the investment in the future.
  • Target returns on an investment include:
  • Increase in the value of the securities or asset, and/or 
  • Regular income must be available from the securities or asset.



TYPE OF INVESTMENT


Different types or kinds of investment are discussed in the following points.

  1. Autonomous Investment
  1. Induced Investment
  1. Financial Investment
  1. Real Investment
  1. Planned Investment
  1. Unplanned Investment




WHAT IS INVESTMENT MODELS?

  • The investment models speak about how to put the money into assets. for countries such as India, to evolve suitable investment models is of paramount significances as there are modalities 
  • Which determine the attractiveness of the country as investment destination not only from the domestic economy but across  the world as well.
  • Investment models are equally concerned with the efficacy of invested financial resources.