INVESTMENT PLANNING
Investment Planning
The Investment Planning process ensures that Organizational Unit (OUs) investment activities are coordinated and focused on achieving high-level strategic business objectives through the integration of business growth and financial investments.
Investment Forecasting
Our Investment Forecasting estimates future investment outcomes by analyzing historical data. It allows management teams to anticipate market trends and make informed decisions. Characteristics of investment forecasting include:
- Used to determine how companies should allocate their investment funds for future growth. Unlike budgeting, investment forecasting does not compare projections with actual performance.
- Regularly updated, possibly monthly or quarterly, based on market conditions, asset performance, and business strategy adjustments.
- Can be both short-term and long-term. For example, companies may have quarterly investment forecasts, adjusting them if market dynamics change.
- Enables management teams to take immediate action based on forecasted investment trends.
Investment forecasting helps businesses optimize capital allocation, adjust portfolio strategies, and enhance financial planning. Long-term forecasts can support the development of robust investment plans for sustainable growth.
Investment Budgeting
An investment budget outlines expectations for financial asset allocations over a specific period, usually one year. Characteristics of investment budgeting include:
- Estimates of capital investments and expected returns.
- Projected cash flows related to investment activities.
- Strategies for risk management and portfolio diversification.
- A structured comparison of actual investment performance against projected outcomes.
Investment budgeting provides a framework for assessing financial positioning, liquidity, and long-term goals. Companies typically review investment budgets periodically, ensuring flexibility to adapt to market conditions and new opportunities. While most budgets span a year, they can be adjusted based on evolving business needs.