Investment Management
...Professor
Emil Scarlat PhD Department of Economic Cybernetics, Academy of Economic Studies
Bucharest, using the announced references (see the Course's Syllabus).
Chapter 1
Introduction. Basic of Investment
1.1. What Investment it is about? But Investment Management?
1. Investment - concepts and types
The word Investment originates in the Latin "vestis", meaning garment, and refers to the
act of putting things (money or other claims to resources) into others' pockets. The basic
meaning of the term being an asset held to have some recurring or capital gains. It is an asset
that is expected to give returns without any work on the asset per se (Wikipedia).
In the most general wide accepted sense, to invest means to spend an amount of money
(investment fund I) in order and in such way that to get a future return R greater than the initial
spent fund. According with this acceptation of the investment it then has to be very easy for
every one to do so (i.e. to spend some money today and to receive more tomorrow). But,
unfortunately, things aren't so at all. The main arguments for this statement rely on all the
aspects that have to be tacking care of when we speak or think at an investment, and that make
this process to be a very complex one:
1) What types of assets we must invest in (tangible or fixed, intangible, financial,
human)?
2) How we can get the necessary information for assess the performances of a particular
class of assets?
3) For how long we should keep an (financial) asset before we sell it?
4) Where we can find the investment fund (if we do not posses the necessary
resources)?
Analyzing these items, we realize that actually there are very few people which have all
the answers. The others must turn to somebody else (an investment professional) in order to get
the right answers for these questions. And this is where the Investment...
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