Conditions of the economy
We must mention the economic conditions affected by many factors such as monetary and fiscal policy, the state of the world economy, levels of unemployment, productivity, exchange rates, inflation and many other factors. Economic indicators are one of the most important factors influencing investors heavily in decision-making. When a country’s economic conditions improve, investors are encouraged to become more optimistic about the future and are likely to invest more because they expect positive returns due to improved economic conditions. The opposite is true when the economic situation worsens; making investors disappointed and more cautious to avoid future risks.Therefore, many companies are looking for visions to help them develop their profitability and sales. Consequently, all investments are at risk, which means that the purchasing power due to the soaring price of so-called inflation (inflation) may lead to high inflation rate zero, which means that the value of the riyal, For example the future will be less than today, so the investor always seeks to achieve higher return from inflation. When the investor intends to invest, the investor must be cautious and takes into account his entire mind, such as: difficulty of liquidity (difficulty in buying and selling stocks and bonds) and political instability in some markets, leading to economic instability and instability in the exchange rate.
Timing of the investment decision
It is very certain that timing is one of the most important elements in making investment decisions. , When investing in any bank, the wrong timing can turn a successful investment idea into a painful loss. So many investors and traders look at the market and individual securities through three different time frames and these actions are taken before the decision is made. These three time frames help investors analyze the market by avoiding losses and increasing profits. Start by analyzing market level or security level by looking at price charts with a long term time frame. Many investors use the monthly chart for this high level of analysis. The next long bandwidth can help determine whether the entire market is moving right or wrong (use an indicator for this type of market in the right position; it is prudent to move into a heavy cash allocation until the positive trend continues.) Investors assess their financial investments, , Through mental processes, to make logical calculations, by evaluating each investment decision separately, and any separate investment decision in the content, content and time of other investment decisions taken by the investor must be the relationship between different investments often does not benefit the process of pricing For those investments
Risk and uncertainty:
One of the most important factors that significantly affect the investment decisions of the investor is the risks and uncertainties associated with the future, thus making the expected return of the investment project undefined and confirming its occurrence. Therefore, incomplete uncertainty of difficulty and unpredictability sometimes results in a number of variables that may occur. However, the result is that the exact size of future benefits and costs will not be determined as a result of the technological changes that may occur to the project during the production period is also a result of inflation and So the rising prices do not go up for all goods one degree, but there is a general tendency to rise in the case of inflation and the general downward trend in the event of deflation, “a state of risk is the situation in which the decision maker can predict or estimate the probability of occurrence of nature.” The investor usually tries to switch between returns when making an investment decision and the degree of risk of change depending on the alternative investment. There are risk-free investments and risky investments. Investors can reduce risk through diversification of investment.
Market potential and sales volume forecasting
It is certainly a very high degree that market research is the best and most important factor recommended because it greatly affects the investor’s decision, so you must first start investing in the feasibility study, the marketing study is interested in identifying market potential, and determines the expected demand on the market. The products of the investment project and therefore estimate the volume of sales, usually depends on the market consideration of the rejection or acceptance of the proposed project, the first step worthy of study and attention to feasibility studies is to conduct a careful analysis of the goods market to be produced, The investor must focus on this aspect because when these estimates are incorrect, that is the layout of the project becomes useless. The most important factors that may affect the decisions of investors in the financial market are: price changes, market information, stock price trends in previous periods, customer preferences and the nature and quality of stocks. All of these changes may lead to investor reaction and the reaction may be exaggerated, which may adversely affect their investment decisions