best investment strategies, the Basics of investing.
At its core investment strategy is a system of long-term goals of investment activities of the organization, determined by the General tasks of its development and investment ideology, as well as the choice of the most effective ways of achieving them.
Investment strategy can be represented as a General direction (program, plan) of investment activities of the organization, compliance with which in the long term should lead to the achievement of the investment objectives and obtaining the expected investment effect. Investment strategy defines the priorities of directions and forms of investment activities of the organization, the character of formation of investment resources and sequence of implementations of long-term investment purposes, providing provided for the overall development of the organization.
Process development of investment strategy is the most important constituent part of the General system of the strategic choice of the enterprise, the main elements of which are mission, General strategic objectives for development of the system of functional strategies in the context of certain types of activities, ways of formation and the allocation of resources.
Urgency of the development of the investment strategy of the organization depends on a number of conditions.
The most important of these conditions is the rate of change of external factors in the investment environment. The high dynamics of the main macroeconomic indicators associated with investment activity of organizations, the pace of scientific and technological progress, frequent fluctuations of the conjuncture of the investment market, the volatility of the state investment policy and forms of regulation of the investment activity does not allow to effectively manage the investments of the enterprise on the the basis of only the previously accumulated experience and traditional methods of financial management. In these circumstances the absence of the developed investment strategy, adapted to the possible changes in the determinants of foreign investment environment, may lead to the fact that investment decisions of individual structural units of the organization will be of diverse nature, lead to contradictions and reducing the effectiveness of investment activity as a whole.
One of the conditions determining the urgency of the development of the investment strategy of the organization, it is the coming stage in the life cycle. Each of the stages of the life cycle of the organization are inherent characteristic to it the level of investment activity, directions and forms of investment activity, peculiarities of formation of investment resources. The developed investment strategy enables to adapt the investment activity of the organization for the upcoming radical changes in the ability of its economic development.
Another essential condition for determining the relevance of developing an investment strategy, is a radical change of the purposes of the operating activities of the organization, associated with the opening up new commercial opportunities. The implementation of such goals requires a change of the production assortment, introduction of new production technologies, development of new markets for products and etc. In these circumstances, a significant increase of investment activity of the organization and diversification of the forms of its investment activities should be predictable, provided by the development of clearly defined investment strategy.
Development of investment strategy of the company is based on the modern concept of a «strategic management», actively implemented since the beginning of the 70-ies of the corporations of the USA and most Western European countries. The strategic management concept reflects a clear strategic positioning organization (including its investment position), represented in the system of the principles and objectives of its functioning mechanism of interaction between the subject and the object of management, the nature of the relationship between the elements of the operational and organizational structure and forms of adaptation to changing conditions of the the external environment.
The strategic management concept has arisen on the basis of the methodology of strategic planning, which is its intrinsic basis. In contrast to the usual long-term planning, based on the concept of extrapolation of the existing tendencies of development, strategic planning takes account not only of these trends, but also the system of opportunities and dangers of the organization development, emergency situations, able to change the existing trends in the coming period.
