Investment - importance and obstacles

Learn about what investment means and what are its pros and cons .

Investment - importance and obstacles
23-12-2020
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Last update 11-11-2023
Table of content

Investing is the process of channeling money and resources into assets or projects to achieve financial returns in the future. Investment is an essential element in the economic growth and development of societies, as it contributes to creating new job opportunities, expanding production, and improving the economic life of individuals.

Investment operations are closely related to the economy, as they promote economic growth and stimulate trade and investment activities. When money is channeled into businesses and projects, new job opportunities are created for workers, and productivity and creativity are enhanced. In addition, the national revenue and income base is broadened, which leads to higher consumption and economic growth in general.

Building new projects is an essential part of the investment process. Construction and development of new projects require investments in assets, infrastructure, technology, labor, and equipment. This will provide new job opportunities and stimulate economic activity in various sectors. Building new projects enhances economic competitiveness, develops emerging industries, and diversifies sources of national income.

In addition to the economic aspects, the construction of new projects contributes to developing the community's infrastructure and improving the quality of life. New projects can be built in public infrastructure, renewable energy,

technology, education, health, tourism, and creative industries. These projects contribute to improving the services provided to the community, providing development opportunities for youth, and enhancing the attractiveness of the region or the country for foreign investment.

In short, investment and building new projects promote economic growth and the development of societies. They contribute to creating job opportunities, expanding production, and improving the quality of life. Therefore, building new projects and encouraging investment operations are vital to economic and social development.

أهمية الاستثمار

The importance of investment

  • Wealth Growth: Individuals and organizations can increase their wealth through investment. When money is invested correctly and smartly, high financial returns can be achieved, leading to an increase in net worth.
  • Retirement and financial security: Investing is essential for planning retirement and securing the financial future. By investing in retirement accounts, stocks, or real estate, individuals can build a store of wealth to meet their financial needs in retirement.
  • Confronting inflation: Investment is an effective way to address the impact of inflation on the purchasing power of funds. The rates of return on investments are usually higher than the rate of inflation, which allows for an increase in the value of money in the long term.
  • Job creation: Investment supports the economy and creates new job opportunities. When individuals and companies invest in projects and businesses, new jobs are created, and economic growth is stimulated.
  • Diversification and Risk Reduction: By spreading your investments across various assets, you can reduce the risks associated with the volatility of a single market.
عوائق الاستثمار

Investment barriers

There are several obstacles that individuals or institutions may face in the investment process. Among these obstacles:

  • Financial risks: Investing involves financial risks, as you may lose part or all of your invested capital. Financial markets may witness fluctuations and unexpected changes, and there may be a deterioration in the performance of the selected investments. Therefore, investors must be willing to take financial risks and diversify their investments to reduce risks.
  • Lack of knowledge and experience: Lack of investment knowledge and experience can significantly hinder. Understanding financial markets and analyzing financial statements requires special skills and knowledge. Obtaining education and advice from qualified financial experts before embarking on investment operations is essential.
  • Lack of financial liquidity: You may have your invested capital tied up in investments for a long time that you may be unable to withdraw quickly. If you need quick liquidity for emergencies, you may face difficulty recovering your invested funds quickly.
  • Political and economic changes: Investments may be affected by political and economic changes in the country or global markets. Changes in government policy, economic downturns, or global crises can negatively affect the performance of investments and increase risks.
  • Bad timing: Improper timing of entering or exiting an investment can be a drag. There may be fluctuations in the markets or periods of economic recession that may make achieving good returns on investments difficult.

With proper planning and continuous learning, investors can overcome these barriers and achieve investment success.

الاستثمار

Investment motives

There are several motives for carrying out investment operations, and they differ from one person to another. Among the common motives for investment :

  • Achieving a financial return: obtaining financial returns is one of the main motives for investment. Investors can increase their wealth by making profits from investments, whether by trading in financial markets or investing in real estate or businesses.
  • Expansion and Business Growth: Investing is also used to expand and develop a business. By investing money in expanding production, opening new branches, or purchasing modern equipment and technology, companies can grow and expand their business and increase revenues.
  • Retirement and financial security: Many invest to plan for retirement and secure their financial future. Individuals can build a financial balance to provide a sustainable income after retirement by investing in retirement accounts or long-term investment funds.
  • Achieving personal goals: Investing may be a way to achieve personal goals for individuals. You may have goals such as buying a home, financing your children's education, or traveling the world, and investing can help you achieve those goals by growing your wealth.
  • Diversification and risk reduction: It can be a motive for investing in diversifying sources of income and reducing financial risks. When investments are distributed over various assets such as stocks, bonds, and real estate, risks associated with market fluctuations can be reduced and capital protected.

Before making any investment, investors should evaluate their financial objectives and the risk associated with the investment and obtain professional advice if necessary.

Factors encouraging investment

Several factors promote and encourage investment operations. Among these factors :

  • Economic and political stability: Economic and political stability is essential in encouraging investment. With a stable and reliable investment environment, investors are more likely to take risks and invest in various assets.
  • Positive Expectations for Economic Growth: Investment demand increases when markets and investors expect strong economic growth. When investors expect that there is an opportunity to make good profits, they feel confident and excited to invest.
  • Innovation and Technology: Technological progress and innovation enhance investment opportunities in emerging and innovative sectors. When there is a discovery or the development of new technology, investors who want to invest in these sectors can have an opportunity to achieve high returns.
  • Government policies encouraging investment: Government policies play an essential role in encouraging investment. Governments may work to provide facilities and appropriate tax procedures and to enhance the investment climate to attract local and foreign investors.
  • Demand for products and services: High demand for certain products or services can be an encouraging factor for investment. When there is
  • A large and growing market for products or services, it provides good investment opportunities for companies and investors.

These are some of the factors that encourage investment, and it is worth noting that the conditions and factors that encourage investment differ from one country to another and from one sector to another.

Why invest in real estate in Türkiye?

Türkiye is considered one of the leading investment destinations in the world's real estate field. Türkiye has several factors that make it attractive to real estate investors. The following is the importance of real estate investment in Turkey and the great opportunities that can be achieved :

  1. The growth of the real estate market: Turkey is witnessing strong growth in the real estate market as the demand for real estate increases, whether by local or foreign investors. This growth is due to the country's economic and political stability and government reforms to attract investments.
  2. Strategic geographical location: Turkey is located at the intersection of three continents (Europe, Asia, and Africa), which makes it a strategic center for global trade and investment. It has excellent communications and infrastructure that support transportation and international trade.
  3. Diversified real estate sector: Turkey provides a variety of real estate investment opportunities, ranging from apartments, villas, and country houses to commercial offices, commercial complexes, hotels, and other commercial real estate. Investors can find suitable options that meet their needs and investment goals.
  4. Affordable real estate cost: Despite the strong growth in the real estate market, Turkey still offers attractive economic opportunities for investors. Real estate can be obtained at reasonable prices compared to other real estate markets, especially in big cities such as Istanbul, Ankara, and Izmir.
  5. Citizenship and residency programs: Türkiye offers citizenship and residency programs for real estate investors. This enhances the attractiveness of real estate investment in the country, as investors can get additional benefits such as freedom of movement and access to the European market.

In short, real estate investment in Turkey provides excellent opportunities for investors looking for sound financial returns, diversification in the investment portfolio, and opportunities to obtain citizenship or residency. Investors should conduct the necessary research and analysis and obtain professional advice before making investment decisions.

Also, at the end of this article, we want to share with you essential information about how to calculate the return on real estate investment in Turkey (ROI), a new service provided by Deal Real Estate Company to view accurate accounts for any real estate apartment or real estate investment in Turkey with the expectation of annual profit.

Written by: Deal Real Estate

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