Investor

Short description: Person who allocates capital with the expectation of a financial return

Capitalism

Concepts

* Business
* Business cycle
* Businessperson
* Capital
* Capital accumulation
* Capital markets
* Capitalist mode of production
* Company
* Corporation
* Competitive markets
* Economic interventionism
* Economic liberalism
* Economic surplus
* Entrepreneurship
* Fictitious capital
* Financial market
* Free price system
* Free market
* Goods and services
* Investor
* Invisible hand
* Liberalization
* Marginalism
* Money
* Private property
* Privatization
* Profit
* Rent seeking
* Supply and demand
* Surplus value
* Value
* Wage labour

Economic systems

* Anglo-Saxon
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* Regulated market
* Regulatory
* Rhine
* Social
* State
* State-sponsored
* Welfare

Economic theories

* American
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* Chartalism
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* Chicago
* Classical
* Institutional
* Keynesian
* Neo-
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* Post-
* Marxian
* Monetarist
* Neoclassical
* New institutional
* Supply-side

Origins

* Age of Enlightenment
* Capitalism and Islam
* Commercial Revolution
* Feudalism
* Industrial Revolution
* Mercantilism
* Primitive accumulation
* Physiocracy
* Simple commodity production

Development

* Advanced
* Consumer
* Corporate
* Crony
* Finance
* Global
* Illiberal
* Late
* Marxist
* Merchant
* Rentier
* State monopoly
* Techno

*   *   *   *   *

* v
* t
* e

Financial market participants

* Credit unions
* Insurance companies
* Investment banks
* Investment funds
* Pension funds
* Prime brokers
* Trusts

* Finance
* Financial market
* Participants
* Corporate finance
* Personal finance
* Public finance
* Banks and banking
* Financial regulation
* Fund governance

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Assets

* Bond
* Commodity
* Derivatives
* Foreign exchange
* Money
* Over-the-counter
* Private equity
* Real estate
* Spot
* Stock

Participants

* Investor
* institutional
* Retail
* Speculator

Locations

* Financial centres
* Offshore financial centres
* Conduit and Sink OFCs

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* Bond
* Cash
* Collateralised debt obligation
* Credit default swap
* Time deposit (certificate of deposit)
* Credit line
* Deposit
* Derivative
* Futures contract
* Indemnity
* Insurance
* Letter of credit
* Loan
* Mortgage

* Option (call
* exotic
* put)}}
* performance bonds
* Repurchase agreement
* Stock
* Security
* Syndicated loan
* Synthetic CDO

An investor is a person who allocates financial capital with the expectation of a future return (profit) or to gain an advantage (interest).[1][2] Through this allocated capital the investor usually purchases some species of property.[3] Types of investments include equity, debt, securities, real estate, infrastructure, currency, commodity, token, derivatives such as put and call options, futures, forwards, etc. This definition makes no distinction between the investors in the primary and secondary markets. That is, someone who provides a business with capital and someone who buys a stock are both investors. An investor who owns stock is a shareholder.

## Contents

* 1 Types of investors
* 2 Investor protection through government
* 3 Investment tax structures
* 4 Role of the financier
* 4.1 Perceptions
* 5 See also
* 6 Further reading
* 7 References
* 8 External links

## Types of investors

There are two types of investors: retail investors and institutional investors.[4]

A retail investor is also known as an individual investor.[5]

There are several sub-types of institutional investor:

* Pension plans making investments on behalf of employees
* Businesses that make investments, either directly or via a captive fund
* Endowment funds used by universities, churches, etc.
* Mutual funds, hedge funds, and other funds, ownership of which may or may not be publicly traded (these funds typically pool money raised from their owner-subscribers to invest in securities)
* Sovereign wealth funds
* Large money managers[6]

Investors might also be classified according to their profiles. In this respect, an important distinctive investor psychology trait is risk attitude.

## Investor protection through government

Investor protection through government involves regulations and enforcement by government agencies to ensure that market is fair and fraudulent activities are eliminated. An example of a government agency that protects investors is the U.S. Securities and Exchange Commission (SEC), which works to protect reasonable investors in the United States .[1]

Similar protections exist in other countries, including the United Kingdom where individual investors have certain protections via the Financial Services Compensation Scheme (FSCS).[7]

## Investment tax structures

Company dividends are paid from net income, which has the tax already deducted. Therefore, shareholders are given some respite with a preferential tax rate of 15% on "qualified dividends" in the event of the company being domiciled in the United States. Alternatively, in another country having a double-taxation treaty with the US, accepted by the Internal Revenue Service (IRS). Non-qualified dividends paid by other foreign companies or entities; for example, those receiving income derived from interest on bonds held by a mutual fund, are taxed at the regular and generally higher rate of income tax. When applied to 2013, this is on a sliding scale up to 39.6%, with an additional 3.8% surtax for high-income taxpayers ($200,000 for singles, $250,000 for married couples).[8]

## Role of the financier

A financier (/fɪnənˈsɪər, fə-, -ˈnæn-/)[9][10] is a person whose primary occupation is either facilitating or directly providing investments to up-and-coming or established companies and businesses, typically involving large sums of money and usually involving private equity and venture capital, mergers and acquisitions, leveraged buyouts, corporate finance, investment banking, or large-scale asset management. A financier makes money through this process when his or her investment is paid back with interest,[11] from part of the company's equity awarded to them as specified by the business deal, or a financier can generate income through commission, performance, and management fees. A financier can also promote the success of a financed business by allowing the business to take advantage of the financier's reputation.[12] The more experienced and capable the financier is, the more the financier will be able to contribute to the success of the financed entity, and the greater reward the financier will reap.[13] The term, financier, is French, and derives from finance or payment.

Financier is someone who handles money. Certain financier avenues require degrees and licenses including venture capitalists, hedge fund managers, trust fund managers, accountants, stockbrokers, financial advisors, or even public treasurers. Personal investing on the other hand, has no requirements and is open to all using the stock market or by word-of-mouth requests for money. A financier "will be a specialized financial intermediary in the sense that it has experience in liquidating the type of firm it is lending to".[11]

### Perceptions

Economist Edmund Phelps has argued that the financier plays a role in directing capital to investments that governments and social organizations are constrained from playing:

> [T]he pluralism of experience that the financiers bring to bear in their decisions gives a wide range of entrepreneurial ideas a chance for insightful evaluation. And, importantly, the financier and the entrepreneur do not need the state's or social partners' approval. Nor are they accountable later on to such social bodies if the project goes badly, not even to the financier's investors. So projects that would be too opaque and uncertain for the state or social partners to endorse can be undertaken.[14]

The concept of the financier has been distinguished from that of a mere capitalist based on the asserted higher level of judgment required of the financier.[15] However, financiers have also been mocked for their perceived tendency to generate wealth at the expense of others, and without engaging in tangible labor. For example, humorist George Helgesen Fitch described the financier as "a man who can make two dollars grow for himself where one grew for someone else before".[16]

## See also

* Finance:Accredited investor - Investor with a special legal status
* Compound interest - Compounding sum paid for the use of money
* Finance:Financial literacy - Ability to make informed choices about money
* Finance:Institutional investor - Investors who invest professionally and as their main occupation in the stock market
* Social:Investor–state dispute settlement - Rules for suing countries by foreign investors
* Finance:Growth capital - Type of private equity investment
* Finance:Model audit - Colloquial term for the tasks performed when conducting due diligence on a financial model
* Finance:Philanthrocapitalism - Method of philanthropy that mirrors a for-profit business
* Finance:Securities offering - Discrete round of investment
* Social:Socially responsible investing - Any investment strategy combining both financial performance and social/ethical impact
* Time value of money - Better to receive money now than later

## Further reading

* Josephson, Matthew (1972). The Money Lords: The Great Finance Capitalists, 1925–1950. New York: Weybright and Talley.
* Graham, Benjamin; Zweig, Jason (February 21, 2006). The Intelligent Investor: The Definitive Book on Value Investing (Revised ed.). HarperCollins. ISBN 0-06-055566-1.

## References

1. ↑ 1.0 1.1 Lin, Tom C.W. (2015). "Reasonable Investor(s)". Boston University Law Review 95 (461): 466.
2. ↑ "Investor". Investor. Cambridge University Press. https://dictionary.cambridge.org/us/dictionary/english/investor. Retrieved November 29, 2019.
3. ↑ Fisher, Jonathan; Bewsey, Jane; Waters, Malcolm; Ovey, Elizabeth (2003). The Law of Investor Protection (2nd ed.). London: Sweet & Maxwell.
4. ↑ Palmer, Barclay (August 11, 2023). "Institutional vs. Retail Investors: What's the Difference?". https://www.investopedia.com/ask/answers/06/institutionalinvestor.asp.
5. ↑ Hayes, Adam. "Retail Investor Definition". https://www.investopedia.com/terms/r/retailinvestor.asp.
6. ↑ "Institutional Investor – Overview, Types, Investing Risks". https://corporatefinanceinstitute.com/resources/knowledge/trading-investing/institutional-investor/.
7. ↑ "Investments" (in en). https://www.fscs.org.uk/what-we-cover/investments/.
8. ↑ "Investment Tax Basics for All Investors". http://www.investopedia.com/articles/investing/072313/investment-tax-basics-all-investors.asp.
9. ↑ "financier". The American Heritage Dictionary. Houghton Mifflin Harcourt Publishing Company. https://www.ahdictionary.com/word/search.html?q=financier.
10. ↑ "financier | meaning of financier". Longman Dictionary of Contemporary English. https://www.ldoceonline.com/dictionary/financier.
11. ↑ 11.0 11.1 Xavier Freixas, Jean-Charles Rochet, Microeconomics of Banking (2008), p. 227.
12. ↑ Landström, Hans (2007). Handbook of Research on Venture Capital. p. 202.
13. ↑ Neave, Edwin H. (2009). Modern Financial Systems: Theory and Applications. p. 8.
14. ↑ Phelps, Edmund S. (October 10, 2006). "Dynamic Capitalism". Europa-Institut. http://www.europainstitut.at/upload/publikationen/publikation_39.pdf.
15. ↑ Elliott, Sterling, ed (1896). Good Roads: Devoted to the Construction and Maintenance of Roads. 24. p. 366.
16. ↑ Fitch, George (1916). Vest Pocket Essays. p. 123.

## External links

* v
* t
* e

Financial markets

Types of markets|

* Primary market
* Secondary market
* Third market
* Fourth market

Types of stocks|

* Common stock
* Golden share
* Preferred stock
* Restricted stock
* Tracking stock

Share capital|

* Authorised capital
* Issued shares
* Shares outstanding
* Treasury stock

Participants|

* Broker-dealer
* Day trader
* Floor broker
* Floor trader
* Investor
* Market maker
* Proprietary trader
* Quantitative analyst
* Financial law
* Regulator
* Stock trader

Exchanges|

* Electronic communication network
* List of stock exchanges
* Trading hours
* Multilateral trading facility
* Over-the-counter

Stock valuation|

* Alpha
* Arbitrage pricing theory
* Beta
* Bid–ask spread
* Book value
* Capital asset pricing model
* Capital market line
* Dividend discount model
* Dividend yield
* Earnings per share
* Earnings yield
* Net asset value
* Security characteristic line
* Security market line
* T-model

Trading theories
and strategies|

* Algorithmic trading
* Buy and hold
* Contrarian investing
* Day trading
* Dollar cost averaging
* Efficient-market hypothesis
* Fundamental analysis
* Growth stock
* Market timing
* Modern portfolio theory
* Momentum investing
* Mosaic theory
* Pairs trade
* Post-modern portfolio theory
* Random walk hypothesis
* Sector rotation
* Style investing
* Swing trading
* Technical analysis
* Trend following
* Value averaging
* Value investing

Related terms|

* Block trade
* Cross listing
* Dark pool
* Dividend
* Dual-listed company
* DuPont analysis
* Efficient frontier
* Flight-to-quality
* Government bond
* Haircut
* Initial public offering
* Long
* Margin
* Market anomaly
* Market capitalization
* Market depth
* Market manipulation
* Market trend
* Mean reversion
* Momentum
* Open outcry
* Position
* Public float
* Public offering
* Rally
* Returns-based style analysis
* Reverse stock split
* Share repurchase
* Short selling
* Slippage
* Speculation
* Stock dilution
* Stock exchange
* Stock market index
* Stock split
* Trade
* Uptick rule
* Volatility
* Voting interest
* Yield

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