Why Do Investors Generally Pay Less Attention to Long and Complex Projects?
All mankind revolves around money and ways of obtaining it. Money is a mean of life, satisfaction of human needs, development and innovation, both in everyday life, and in technology and business, thus, investing money in a new business is the most effective way to develop and generate income. But why is it more often that investors who allocate money to finance new projects tend to choose short-term, simple projects in their choice?
According to Cambridge dictionary, investment is the act of putting money into a business to buy new stock, machines, etc., or a sum of money that is invested in a business in this way. Investments are viewed as a process reflecting the movement of value. As an economic category, they are economic relations associated with the movement of value invested in fixed assets.
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The difference between short-term and long-term investments is in the duration of the project, and the risks that the investor expects in this case of investing. Long-time projects are more complicated, so they need much time to develop, and a lot of money for the survey (Treynor 7). In this case, project should include deep investigation of the market, strengths, and weaknesses of the project, opportunities to enter the market. Another important stage is creation of business plan. This stage will contain information about area of activity, all details of business, investment plan and possible risks. That’s why investors don’t want to pay much time and money in such projects and choose short ones. They are more easy and understandable for people who want only invest money in something and not be engaged in all details (Barberis 178).
From this point of view it’s much easier to invest in short and simple projects, but to get more profit and develop the business, it’s better to create long and complete projects. All of this is choice of the investor what project to choose.
- Added Dec 26, 2018