f2 Investors

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Types of Investors

1. Individual investors (including trusts on behalf of individuals, and umbrella companiesformed by two or more to pool investment funds).

2. Collectors of art, antiques, and other things of value

3. Angel investors (individuals and groups)

4. Sweat equity investor

5. Venture capital funds, which serve as investment collectives on behalf of individuals,companies, pension plans, insurance reserves, or other funds.

6. Investment banks

7. Businesses that make investments, either directly or via a captive fund

8. Investment trusts, including real estate investment trusts

9. Mutual funds, hedge funds, and other funds, ownership of which may or may not bepublicly traded (these funds typically pool money raised from their owner-subscribersto invest in securities)


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Angel investors


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Sweat equity investor

Sweat equity is a term that refers to a party's contribution to

a project in the form of effort , as opposed to financial equity,

which is a contribution in the form of capital.
http://en.wikipedia.org/wiki/Ownership_equityhttp://en.wikipedia.org/wiki/Ownership_equity


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VENTURE CAPITAL


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VENTURE CAPITAL


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VENTURE CAPITAL

The venture capital fund makes money by owning

equity in the companies it invests in, which usually

have a novel technology or business model in high

technology industries, such as biotechnology, IT,

software, etc
http://en.wikipedia.org/wiki/Collective_investment_schemehttp://en.wikipedia.org/wiki/Equity_(finance)http://en.wikipedia.org/wiki/Business_modelhttp://en.wikipedia.org/wiki/Biotechnologyhttp://en.wikipedia.org/wiki/Information_technologyhttp://en.wikipedia.org/wiki/Softwarehttp://en.wikipedia.org/wiki/Softwarehttp://en.wikipedia.org/wiki/Information_technologyhttp://en.wikipedia.org/wiki/Biotechnologyhttp://en.wikipedia.org/wiki/Business_modelhttp://en.wikipedia.org/wiki/Equity_(finance)http://en.wikipedia.org/wiki/Collective_investment_scheme


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INVESTMENT BANKING

An investment bank is a financial institution that assists

individuals, corporations and governments in raising capital

by underwriting and/or acting as the client's agent in the

issuance ofsecurities. An investment bank may also assist

companies involved in mergers and acquisitions, and provide

ancillary services such as market making, trading of

derivatives, fixed income instruments, foreign exchange,

commodities, and equity securities.
http://en.wikipedia.org/wiki/Securitieshttp://en.wikipedia.org/wiki/Mergers_and_acquisitionshttp://en.wikipedia.org/wiki/Market_makinghttp://en.wikipedia.org/wiki/Derivative_(finance)http://en.wikipedia.org/wiki/Fixed_incomehttp://en.wikipedia.org/wiki/Foreign_exchange_markethttp://en.wikipedia.org/wiki/Commoditieshttp://en.wikipedia.org/wiki/Equity_securitieshttp://en.wikipedia.org/wiki/Equity_securitieshttp://en.wikipedia.org/wiki/Commoditieshttp://en.wikipedia.org/wiki/Foreign_exchange_markethttp://en.wikipedia.org/wiki/Fixed_incomehttp://en.wikipedia.org/wiki/Derivative_(finance)http://en.wikipedia.org/wiki/Market_makinghttp://en.wikipedia.org/wiki/Mergers_and_acquisitionshttp://en.wikipedia.org/wiki/Securities


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MUTUAL FUND


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Mutual funds

A mutual fund is a professionally managed type of collective

investment scheme that pools money from many investors to

buy stocks, bonds, short-term money market instruments,

and/or other securities


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Regret Theory


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Regret Theory

Fear of regret, or simply regret, theory deals with the

emotional reaction people experience after realizing

they've made an error in judgment. Faced with the

prospect of selling a stock, investors become

emotionally affected by the price at which they

purchased the stock. So, they avoid selling it as a way

to avoid the regret of having made a bad investment,as well as the embarrassment of reporting a loss. We

all hate to be wrong, don't we?
http://www.investopedia.com/terms/r/regrettheory.asphttp://www.investopedia.com/terms/r/regrettheory.asphttp://www.investopedia.com/terms/r/regrettheory.asp


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Mental Accounting


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Mental Accounting

Hesitation to sell an investment that once had monstrousgains and now has a modest gain. During an economicboom and bull market, people get accustomed to healthygains.

When the market correction deflates investor's net worth,they're more hesitant to sell at the smaller profit margin.

They create mental compartments for the gains they oncehad, causing them to wait for the return of that gainfulperiod.


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Prospect/Loss-Aversion Theory


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Prospect/Loss-Aversion Theory

Explains why investors hold onto losing stocks: people

often take more risks to avoid lossesthan to realize gains.

For this reason, investors willingly remain in a risky stock

position, hoping the price will bounce back. Gamblers on

a losing streak will behave in a similar fashion, doubling

up bets in a bid to recoup what's already been lost.

They may believe that today's losers may soon

outperform today's winners.


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Anchoring


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Anchoring

Investment decisions are often influenced

by price anchors, prices deemed

significant because of their closeness torecent prices. This makes the more

distant returns of the past irrelevant ininvestors' decisions.
http://www.investopedia.com/terms/a/anchoring.asphttp://www.investopedia.com/terms/a/anchoring.asp


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Over-/Under-Reacting


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Over-/Under-Reacting

Investors get optimistic when the market goes up,

assuming it will continue to do so. Conversely,

investors become extremely pessimistic during

downturns. A consequence of anchoring, or

placing too much importance on recent events

while ignoring historical data, is an over- or under-

reaction to market events which results in prices

falling too much on bad news and rising too much

on good news.

Extreme cases of over- or under-reaction to market events may lead to

market panics and crashes.


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Overconfidence


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Overconfidence

O fid


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Overconfidence


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Overconfidence

Many investors believe they can consistently

time the market. But in reality there's an

overwhelming amount of evidence thatproves otherwise. Overconfidence results in

excess trades, with trading costs denting

profits.
http://www.investopedia.com/terms/m/markettiming.asphttp://www.investopedia.com/terms/m/markettiming.asp


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Greater fool theory

The greater fool theory (also called survivor investing) is

the belief held by one who makes a questionable investment,

with the assumption that they will be able to sell it later to "a

greater fool"; in other words, buying something not becauseyou believe that it is worth the price, but rather because you

believe that you will be able to sell it to someone else at an

even higher price
http://en.wikipedia.org/wiki/Investmenthttp://en.wikipedia.org/wiki/Pricehttp://en.wikipedia.org/wiki/Pricehttp://en.wikipedia.org/wiki/Investment

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