US Markets in green on Friday; Dow 30 up over 345 points, Nasdaq Composite, S&P 500 up nearly 1%

US Markets were trading in the green on Friday with Dow 30 trading at 30,678.80, up by 1.14%. While S&P 500 was trading at 3,701.66, up by 0.98% and Nasdaq Composite 10,690.60 was also up by 0.71 per cent

Twitter Facebook Linkedin
US Markets in green on Friday; Dow 30 up over 345 points, Nasdaq Composite, S&P 500 up nearly 1%
Earlier today, Indian stock markets ended the week on a winning note. It was the sixth straight gains for equity markets. Source: Reuters
US Markets were trading in the green on Friday with Dow 30 trading at 30,678.80, up by 345.25 points or1.14 per cent. While S&P 500 was trading at 3,701.66, up by 35.88 points or 0.98 per cent and Nasdaq Composite 10,690.60 was also up 75.75 points or 0.71 per cent. A Reuters report said that today’s strength was on the back of a report which said the Federal Reserve will likely debate on signaling plans for a smaller interest rate hike in December, reversing declines set off by social media firms after Snap Inc’s ad warning.

Source: Comex

Nasdaq Top Gainers and Losers

Source: Nasdaq

Earlier today, Indian stock markets ended the week on a winning note. It was the sixth straight gains for equity markets. The BSE Sensex ended at 59,307.15, up by 104.25 points or 0.18 per cent from the Thursday closing level. Meanwhile, the Nifty50 index closed at 17,590.00, higher by 26.05 points or 0.15 per cent. In the 30-share Sensex, 13 stocks gained while the remaining 17 ended on the losing side. In the 50-stock Nifty50, 21 stocks advanced while 29 declined.

Emotional Intelligence For Project Managers – Nice to Have Or Necessity?

If only it were just about defining scope, creating a project plan, and tracking costs! Project Management obviously encompasses all those things, but now more than ever it’s also about relationship development, team building, influencing, collaborating, and negotiating often in a very complex environment. As my father often said, this job would be easy, if it weren’t for the people!The pervasive school of thought among corporate leaders until recently was that a person’s IQ score is the best indicator of how successful that person will perform in the work environment, and that emotions are something to be checked at the door, considered to be a hindrance to the individual’s success. But this thinking is changing as a new generation of managers enters the leadership ranks. Enter Emotional Intelligence (EI). Awareness of EI started with Peter Salovey and John Mayer in 1990, and Salovey considers EI to be the “ability to monitor one’s own and other’s feelings and emotions, to discriminate among them, and use this information to guide one’s thinking and action”. Daniel Goleman popularized the EI theory with his book “Emotional Intelligence” in 1995, and there are a number of other critical contributors to the discussion on EI. This article will use the model developed by Dr. Steven Stein, CEO of Multi Health Systems, based on the Emotional Intelligence Skills Assessment (EISA) published by Pfeiffer, an Imprint of John Wiley & sons, to show that EI is a critical skill for a Project Manager to be successful. The EISA stems from the previous work of BarOn (1997), Mayer, Salovey, and Caruso (1997), and Goleman (1998), and has evolved into a five factor model that assesses the interconnected components of emotional intelligence that are directly tied to emotional and social functioning.So why does a Project Manager need an understanding of Emotional Intelligence as well as the ability to track schedules and budgets? Project Managers need to be able to do the following:• Operate in complex matrix environments – Project Managers need to influence, negotiate, and collaborate with other departments and teams for resources and to understand project dependencies. The ability to build relationships and understand how to get the best from others is a critical skill that a Project Manager needs to be effective in a matrix environment.• Build effective teams – People are key to the success of any project, and Project Managers rarely have direct ‘control’ over the staff with which they are expected to complete the project. They need to be able to motivate staff, build teams from disparate sources, and manage conflict, all skills that require the ability to understand people and their particular wants and needs.• Manage change – by their very nature, projects cause change. Building a technical solution is only one component of a project; understanding and managing the impact of that technical solution on a user population, and the effect of that change, is a critical skill for a Project Manager.• Provide leadership – Project Managers need to provide leadership to the people on the project, the stakeholders, and other groups with which they interact. As well as the ability to make decisions based on well thought out analysis of the situation, the ability to make decisions based on the understanding of the impact on people is also an important leadership aspect.• Deliver results – The complexity of the environment and the degree to which collaboration needs to be successful is unprecedented, and simply being able to track a project plan is unlikely to be enough to allow a Project Manager to be successful. Understanding one’s own emotions, the emotions of others, and how those can be most effectively managed can have a dramatic effect on a Project Manager’s ability to deliver results.The EISA framework is based on Reuven Bar-On’s Emotional Quotient Inventory (EQ-i) model and is a simplified version providing a starting point for understanding EI based behaviors, recognizing them in ourselves and others, and building action plans to modify behaviors in the future to obtain different outcomes. The framework has 5 basic EI factors, as follows:
- Perceiving – the ability to accurately recognize, attend to, and understand emotion
- Managing – the ability to effectively manage, control and express emotions
- Decision Making – the appropriate application of emotion to manage change and solve problems
- Achieving – the ability to generate the necessary emotions and to self motivate in the pursuit of realistic and meaningful objectives
- Influencing – the ability to recognize, manage and evoke emotion within oneself and others to promote changeThe framework is laid out with Perceiving and Managing surrounding the other three factors, on the basis that a person requires the ability to perceive and manage emotions to be able to apply EI to the remaining factors. Increasing the level of awareness of one’s self and others through perceiving and managing emotions is a great starting point in itself, and is the foundation for improving our outcomes in the areas of decision making, achieving and influencing.The EI skill of Perceiving is based on the ability of an individual to recognize, attend to, and understand emotions in themselves and others. Related to this are the critical abilities to demonstrate empathy, differentiate between emotions, and identify the impact that emotions have on a situation. Research shows that approximately 55% of what we perceive from someone comes from their body language, about 38% from the tone of their voice and a mere 7% from the actual words that they use. Perceiving emotional cues for Project Managers is a critical skill. For example, misunderstanding a resource manager’s body language when trying to negotiate for project resources from another part of the organization could be a critical factor in determining not only whether the Project Manager gets the resources they need, but also in determining the tone of the relationship with that manager for the remainder of the project schedule.The EISA framework indicates that those with a lower score on the Perceiving scale are likely to have more difficulty discriminating between emotions, exhibit less positive emotions, and may be more emotionally unpredictable. Those with a higher score on the Perceiving scale are likely to have a greater ability to discriminate between emotions, be more able to gauge the intensity of a person’s feelings, be more empathic, and be more emotionally predictable. While working on a recent project at the Federal Government, I came across an individual with whom we had to collaborate in order to obtain approval for our technical designs. We could have proceeded without his approval, but had we done so, he would likely have caused us more problems later in the project lifecycle when the cost of correcting course would have been considerably higher. In one meeting we were discussing a particular solution to a database design, and he was becoming increasingly agitated at one point because the solution we were proposing went against his preference. Rather than charge forward, we not only heard the words and tone with which he was resisting the solution, but also saw the body language, and decided that a compromise was necessary. Despite feeling that our technical solution was valid, we responded calmly, validated his opinion, and asked him questions until a compromise was found that all parties agreed to. The result was that not only did we get a better outcome in this particular instance, but our relationship with him improved drastically in other areas, and he became a big supporter of our team. It would have been easy for our team to get as tied to our technical solution as he was to his, and had we done so my guess is that while the project might have been completed from a technical perspective, any chance of collaboration and good will for the future would have been eliminated.The EI skill of Managing is the ability to effectively manage, control and express emotions. Identifying our own moods and the impact of our moods on our behavior is a critical aspect of self awareness. How many Project Managers have had to present project status to senior management, have it not go as well as they had hoped, and come out of feeling stressed? At the same time, they have staff that need their attention, who may only be working on the project part-time. The Project Manager must be aware of their own stress, and then make a choice about how to respond to the needs of their staff. If they run to the staff directly after the meeting without understanding their own level of stress, there is a risk that the stress will be passed on to the staff, resulting in a lowering of staff motivation. If they are able to take time out to cool off and rebalance themselves and then talk to their staff they are less likely to pass on their stress, and therefore the conversation is likely to have a better outcome. In a matrix environment, where staff are only assigned part-time to a project, a Project Manager passing their stress on to their staff can cause a team member to ‘hide’ behind the matrix structure and result in them spending their time elsewhere. It can often take a Project Manager a while to realize that this is happening, at which point the delivery of the project has been impacted.The EISA framework indicates that those with a lower score on the Managing scale are more likely to mismatch emotions, cope with stress less effectively, and have more difficulty building relationships and networks. Those with a higher score on the Managing scale are more likely to appropriately express their emotions, have better coping skills, and have more meaningful interpersonal relationships and networks. The effect of emotions and mood can have either a positive or negative effect on those with which we have to work. One of the best bosses I’ve ever had used humor to change the emotion of a group. At the start of one of the largest Electronic Health Record implementations outside of the Federal Government, he started a new role collaborating with a group in Hawaii. This was especially challenging as many of our meetings were over the phone, with clinicians who were only minimally enthusiastic about working with IT staff. He could sense some negative emotion, even over the phone, and so decided to tell a story about how he accidentally took his wife’s HRT tablets in place of a sleeping tablet (and interestingly got a very good night sleep!). His story resulted immediately in laughter, and the rest of the meeting went very smoothly. All sides provided positive contribution to the discussion, and this laid the foundation for a good relationship for the remainder of the project. His ability to identify a negative emotion, control his own emotional response to that (which could have been to get aggressive or defensive) and develop a strategy to put the group in a different mood demonstrated skillful use of EI in a project management setting.The EI skill of Decision Making is the ability to appropriately apply emotion to manage and solve problems, something that a Project Manager needs to do on a daily basis. Project Managers need to be able to make decisions by analyzing all aspects of a situation, without distorting reality in either a positive or negative manner, and understanding the people aspects and impacts of any decision made. Decisions often result in change, and so part of making grounded decisions is being able to identify and understand the emotional impact of change on other people. Change can cause ambiguity, and this is often very stressful for those impacted. If Project Managers can stay calm in the face of change, it can often reduce the level of anxiety for others, resulting in a lower negative impact on the project as a whole.The EISA framework indicates that those with a lower score on the Decision Making scale are more likely to generate emotions that are less appropriate for the task in hand, be more impulsive or paralyzed when making decisions, and perhaps even make inaccurate or untimely decisions. Those with a higher score on the Decision Making scale are more likely to generate emotions appropriate for the task in hand, be more flexible, pragmatic and perceptive of the effect that decisions have on people and a situation. It’s easy to get swept away by excitement when making decisions, although it is also true that a positive mood can more often result in good decisions, and a negative mood result in bad decisions. Emotions can affect our decisions in many ways. I worked for an Insurance company in the UK years ago, that had just spent millions of pounds on a custom built system. When a vendor came in to show them a new package solution, for only a fraction of the price, the enthusiasm that the organization felt about saving so much money was palpable. However, in the excitement of such a decision, the reality of implementing a package solution, with all of the activities related to analysis, testing, implementation, etc, was underestimated. The result was that the system was implemented, causing significant change for the users, but the final cost to the organization was not very different than the cost of implementing the original custom built solution.The EI skill of Achieving is the ability to generate the necessary emotions to motivate ourselves in the pursuit of realistic and meaningful objectives. Go-getters tend to set goals for themselves, and if they fail they are typically able to stand back, analyze what they could do better next time, and move forward with their corrective action. There are others that talk and complain that they’re not achieving what they want in life, but don’t make the necessary changes to meet goals, and blame others for their frustrations. Determination and vigor are feelings that help us move forward into action and achievement, and as Project Managers our ability to be able to achieve, often in the face of adversity, is critical to our success.The EISA framework indicates that those with a lower score on the Achieving scale tend to avoid risk, be only outcome oriented, avoid emotions associated with failure, and have little task ownership. Those with a higher score on the Achieving scale tend to be intrinsically motivated, take pleasure in success, take responsibility and ownership, tend to be in a positive mood, and are comfortable taking moderate risk. I worked on a large healthcare conversion project some years ago that was staffed by a mixture of employees and contractors from multiple different consulting companies. We had a strict scope and timeline, and no-one wanted to miss the deadline. The project was full of negative emotion, caused by poor processes, a fractured organization structure, poor communication, and a lot of turf wars between the various groups. The project met the deadline, but people worked many hours, there was infighting, and some of the relationships with the user base were damaged for a considerable time due to forcing the system to go live before it was really ready from a quality perspective. So while the project achieved its results at some level, in that it met the deadline, there were other casualties in terms of relationships and staff that took a long time to repair.The EI skill of Influencing is the ability to recognize, manage and evoke emotion in others to promote change. It is the ability to appraise a situation, interpret the emotional tone and understand the impact of this in our ability to build and maintain social relationships. How a Project Manager handles his or her emotions, as well as the emotions of others, can have a significant impact on the nature of a relationship. Positive emotions tend to result in a more collaborative relationship; negative emotions tend to reduce the likelihood of collaboration. Since a Project Manager almost always has a variety of groups to influence in order to be successful – operations groups, IT support services, functional managers, business stakeholders, vendors etc – the ability to positively influence relationships to achieve collaboration can have a dramatic effect on results.The EISA framework indicates that those with a lower Influencing score tend to be rarely or ineffectively assertive, prefer one on one communication, have difficulty managing others, and tend to be more instructive in their style of management. Those with a higher Influencing score are typically effectively assertive, often show a confident demeanor, are optimistic and inspire others. I made reference earlier in this article to my boss on an EHR project. What made him one of the best bosses I’ve ever had were his leadership qualities, which included empathy, a collaborative nature, flexibility, understanding, compassion, creativity and credibility. It was not at all related to his technical skill in managing a project, but rather the tone that he set as a leader. Many of us had been on a prior iteration of the same project, with entirely different leaders, resulting in an entirely different project culture. My boss took a deliberate strategy to be collaborative as he started his new role, and set up a variety of cross functional groups to buy people into the. The project was extremely successful, and this was a significant contributing factor.So in summary, Project Managers work in increasingly complex environments, and it’s not sufficient to bring only technical skills to that role to be successful. Relationships need to be developed, teams need to be motivated, change needs to be managed. If we can improve our ability to perceive emotions of others, we can empathize, and adjust our style to get a better outcome. If we can manage our emotions, we can be sure that the emotions we express are appropriate for the situation. If we can use our emotions to improve our decision making, we can enhance our ability to solve problems. If we can self-motivate we can achieve more realistic goals. Finally, if we can enhance our ability to interpret emotional tone, we can build more effective relationships and influence the goals and outcomes of a project. In doing so, Project Managers can be more effective leaders, resulting in more successful project delivery. So is Emotional Intelligence a nice to have or a necessity? Only you can decide, but I think it depends on just how successful you want to be!

Finance, Credit, Investments – Economical Categories

Scientific works in the theories of finances and credit, according to the specification of the research object, are characterized to be many-sided and many-leveled.

The definition of totality of the economical relations formed in the process of formation, distribution and usage of finances, as money sources is widely spread. For example, in “the general theory of finances” there are two definitions of finances:

1) “…Finances reflect economical relations, formation of the funds of money sources, in the process of distribution and redistribution of national receipts according to the distribution and usage”. This definition is given relatively to the conditions of Capitalism, when cash-commodity relations gain universal character;

2) “Finances represent the formation of centralized ad decentralized money sources, economical relations relatively with the distribution and usage, which serve for fulfillment of the state functions and obligations and also provision of the conditions of the widened further production”. This definition is brought without showing the environment of its action. We share partly such explanation of finances and think expedient to make some specification.

First, finances overcome the bounds of distribution and redistribution service of the national income, though it is a basic foundation of finances. Also, formation and usage of the depreciation fund which is the part of financial domain, belongs not to the distribution and redistribution of the national income (of newly formed value during a year), but to the distribution of already developed value.

This latest first appears to be a part of value of main industrial funds, later it is moved to the cost price of a ready product (that is to the value too) and after its realization, and it is set the depression fund. Its source is taken into account before hand as a depression kind in the consistence of the ready products cost price.

Second, main goal of finances is much wider then “fulfillment of the state functions and obligations and provision of conditions for the widened further production”. Finances exist on the state level and also on the manufactures and branches’ level too, and in such conditions, when the most part of the manufactures are not state.

V. M. Rodionova has a different position about this subject: “real formation of the financial resources begins on the stage of distribution, when the value is realized and concrete economical forms of the realized value are separated from the consistence of the profit”. V. M. Rodionova makes an accent of finances, as distributing relations, when D. S. Moliakov underlines industrial foundation of finances. Though both of them give quite substantiate discussion of finances, as a system of formation, distribution and usage of the funds of money sources, that comes out of the following definition of the finances: “financial cash relations, which forms in the process of distribution and redistribution of the partial value of the national wealth and total social product, is related with the subjects of the economy and formation and usage of the state cash incomes and savings in the widened further production, in the material stimulation of the workers for satisfaction of the society social and other requests”.

In the manuals of the political economy we meet with the following definitions of finances:
“Finances of the socialistic state represent economical (cash) relations, with the help of which, in the way of planned distribution of the incomes and savings the funds of money sources of the state and socialistic manufactures are formed for guaranteeing the growth of the production, rising the material and cultural level of the people and for satisfying other general society requests”.
“The system of creation and usage of necessary funds of cash resources for guarantying socialistic widened further production represent exactly the finances of the socialistic society. And the totality of economical relations arisen between state, manufactures and organizations, branches, regions and separate citizen according to the movement of cash funds make financial relations”.
As we’ve seen, definitions of finances made by financiers and political economists do not differ greatly.
In every discussed position there are:

1) expression of essence and phenomenon in the definition of finances;

2) the definition of finances, as the system of the creation and usage of funds of cash sources on the level of phenomenon.

3) Distribution of finances as social product and the value of national income, definition of the distributions planned character, main goals of the economy and economical relations, for servicing of which it is used.

If refuse the preposition “socialistic” in the definition of finances, we may say, that it still keeps actuality. We meet with such traditional definitions of finances, without an adjective “socialistic”, in the modern economical literature. We may give such an elucidation: “finances represent cash resources of production and usage, also cash relations appeared in the process of distributing values of formed economical product and national wealth for formation and further production of the cash incomes and savings of the economical subjects and state, rewarding of the workers and satisfaction of the social requests”. in this elucidation of finances like D. S. Moliakov and V. M. Rodionov’s definitions, following the traditional inheritance, we meet with the widening of the financial foundation. They concern “distribution and redistribution of the value of created economical product, also the partial distribution of the value of national wealth”. This latest is very actual, relatively to the process of privatization and the transition to privacy and is periodically used in practice in different countries, for example, Great Britain and France.

“Finances – are cash sources, financial resources, their creation and movement, distribution and redistribution, usage, also economical relations, which are conditioned by intercalculations between the economical subjects, movement of cash sources, money circulation and usage”.
“Finances are the system of economical relations, which are connected with firm creation, distribution and usage of financial resources”.

We meet with absolutely innovational definitions of finances in Z. Body and R. Merton’s basis manuals. “Finance – it is the science about how the people lead spending `the deficit cash resources and incomes in the definite period of time. The financial decisions are characterized by the expenses and incomes which are 1) separated in time, and 2) as a rule, it is impossible to take them into account beforehand neither by those who get decisions nor any other person” . “Financial theory consists of numbers of the conceptions… which learns systematically the subjects of distribution of the cash resources relatively to the time factor; it also considers quantitative models, with the help of which the estimation, putting into practice and realization of the alternative variants of every financial decisions take place” .

These basic conceptions and quantitative models are used at every level of getting financial decisions, but in the latest definition of finances, we meet with the following doctrine of the financial foundation: main function of the finances is in the satisfaction of the people’s requests; the subjects of economical activities of any kind (firms, also state organs of every level) are directed towards fulfilling this basic function.

For the goals of our monograph, it is important to compare well-known definitions about finances, credit and investment, to decide how and how much it is possible to integrate the finances, investments and credit into the one total part.

Some researcher thing that credit is the consisting part of finances, if it is discussed from the position of essence and category. The other, more numerous group proves, that an economical category of credit exists parallel to the economical category of finances, by which it underlines impossibility of the credit’s existence in the consistence of finances.

N. K. Kuchukova underlined the independence of the category of credit and notes that it is only its “characteristic feature the turned movement of the value, which is not related with transmission of the loan opportunities together with the owners’ rights”.

N. D. Barkovski replies that functioning of money created an economical basis for apportioning finances and credit as an independent category and gave rise to the credit and financial relations. He noticed the Gnoseological roots of science in money and credit, as the science about finances has business with the research of such economical relations, which lean upon cash flow and credit.
Let’s discuss the most spread definitions of credit. in the modern publications credit appeared to be “luckier”, then finances. For example, we meet with the following definition of credit in the finance-economical dictionary: “credit is the loan in the form of cash and commodity with the conditions of returning, usually, by paying percent. Credit represents a form of movement of the loan capital and expresses economical relations between the creditor and borrower”.

This is the traditional definition of credit. In the earlier dictionary of the economy we read: “credit is the system of economical relations, which is formed while the transmission of cash and material means into the temporal usage, as a rule under the conditions of returning and paying percent”.
In the manual of the political economy published under reduction of V. A. Medvedev the following definition is given: “credit, as an economical category, expresses the created relations between the society, labour collective and workers during formation and usage of the loan funds, under the terms of paying present and returning, during transmission of sources for the temporal usage and accumulation”.

Credit is discussed in the following way in the earlier education-methodological manuals of political economy: “credit is the system of money relations, which is created in the process of using and mobilization of temporarily free cash means of the state budget, unions, manufactures, organizations and population. Credit has an objective character. It is used for providing widened further production of the state and other needs. Credit differs from finances by the returning character, while financing of manufactures and organizations by the state is fulfilled without this condition”.

We meet with the following definition if “the course of economy”: “credit is an economical category, which represents relations, while the separate industrial organizations or persons transmit money means to each-other for temporal usage under the conditions of returning. Creation of credit is conditioned by a historical process of fulfilling the economical and money relations, the form of which is the money relation”.

Following scientists give slightly different definitions of credit:
“Credit – is a loan in the form of money or commodity, which is given to the borrower by a creditor under the conditions of returning and paying the percentage rate by the borrower”.
Credit is giving the temporally free money sources or commodity as a debt for the defined terms by the price of fixed percentage. Thus, a credit is the loan in the form of money or commodity. In the process of this loan’s movement, a definite relations are formed between a creditor (the loan is given by a juridical of physical person, who gives certain cash as a debt) and the debtor.
Combining every definition named above, we come to an idea, that credit is giving money capital of commodity as a debt, for certain terms and material provision under the price of firm percentage rate. It expresses definite economical relations between the participants of the process of capital formation. Necessity of the credit relations is conditioned, from one side, by gathering solid quantity of temporarily free money sources, and from the second side, existence of requests of them.

Though, at the same time we must distinguish two resembling concepts: loan and credit. Loan is characterized by:

o Here, the discussion may touch upon transmission of money and also things form one side (loaner) to another (borrower): a)under the owning of the borrower and, at the same time, b) under the conditions of returning same amount or same quantity and quality of the things;

o The loaning of money may bear no interest;

o Any person may take part in it.
With the difference with loan, credit, which is somehow a private occasion of the loan, represents:

o One side (loaner) gives to the second one (borrower) only money, and _ for temporal usage;

o It may not bear no interest (if the assignment doesn’t foresee something);

o In it creditor is not any person, but a credit organization (at the first place, banks).
So, a credit is the bank credit. To our mind, it is not correct to use “credit” and “loan” as the synonyms.
Banking crediting is the union of relations between bank (as a creditor) and its borrower. These relations touch upon:

a) Giving a certain amount of money to the borrower for definite purpose (though, we meet with the so-called free credits, aims and objects of crediting are not appointed in the assignment);

b) Its opportune returning;

c) Getting percentage rate from the borrower for using the sources under his/her disposal.
The essential foundation of the credit essence and its important element is existence of trust between the two sides (in Latin “credo”, from which comes the word “credit”, means “trust”).
From the position of circulation of money forms (in the abstraction, historical process of formation economical relations and social budget and banking systems expressed by them) comparing different definitions of finances and credit, the paradox conclusion appears: credit is the private occasion of finances. And truly, from the position of movement of the money forms, finances represent the process of formation and usage of the funds of cash means. Very often such movements are fulfilled without returning, but sometimes, it is possible to give loans from the budget for the investment projects of other needs. Also, when a manufacture or corporations use their cash funds and we mean the finances of industrial subject, such usage may be realized as inside the manufacture or corporation (there is no subject about returning or not returning of the usage), so gratis under conditions of returning. This latest is called commercial form because of transmitting the sources to others, but even in this occasion, it is the element of financial system of the manufacture and corporation.

From the point of cash means movement, main character of credit is the process of formation and usage of the funds of cash means under the conditions of returning and, as a rule, taking the value-percentage. If gating the credit value doesn’t take place (even in the exceptional occasions), according to the movement form, credit becomes a private occasion of finances, as from the net financial funds (consequently from the state budget) the loans which bear no interests may be used. If gating credit value takes place, by the appearance form, credit is discussed to be financial modification.

From the historical point of view, finances (especially in the sort of the state budget) and credit (beginning with usury, later commercial and banking) were developing differently for considering credit to be the part of finances. Though, from the genetic-historical point of view, previous loaners, before giving loan, needed gathering the permanent capital not returning, that is the net financial foundation. The banks analogously needed concentration of the important own capital for influxing the consumers’ means and for getting higher percentage rate under the conditions of returning. Herewith, exactly on the financial basis, in the sort of financial fund (which later partially becomes loan fund) part of the bank capital appears to be the reservation (insurance) part of the fund, which by nature is financial and not loan. So notwithstanding the essential distinctions between finances and credit form the genetic-historical point of view, credit appears to be formed from finances and represent their modification.

From the essential position of expressing economical relations of finances and credit, we meet with cardinal distinctions between these two categories. Which mostly expressed by the distinction of the movement forms notwithstanding they are returnable or not. Finances express relations in the aspects of distribution and redistribution of social product and part of the national wealth. Credit expresses distribution of the appropriate value only in the section of percentage given for loan, while according to the loan itself, a only a temporal distribution of money sources takes place.
Herewith, there is a lot of common between the finances and credit as from the essential point of view, so according to the form of movement. At the same time, there is a significant distinction between finances and credit as in the essence, so in the form too. According to this, there must be a kind of generally economical category, which will consider finances and credit as a total unity, and in the bounds of this category itself, the separation of the specific essence of the finances and credit would take place.

Funding of the cash means is common to the researched economical categories. It takes place in any separate system of finances and credit, which have been touched upon during the analyses of defining finances and credit. Word combination “funding of the cash sources (fund formation)” reflects and defines exactly essence and form of economical category of more general character, those of finances and credit categories. Though in the in economical texts and practice, it is very uncomfortable to use a termini, which consists of three words. Also, “unloading” with an information hardens greatly its influxing into the circulation even in the conditions of its strict substantiation and thoroughness.
In the discussing context we consider:

1) wide and narrow understanding of economical category of the finances;

2) discussing finances in narrow understanding under general traditional meaning;

3) discussing finances, as funding of the cash means, in wide understanding, which concerns finances – in narrow meaning and credit – in complete meaning.
Termini “funding” and its equivalent “fund formation” are used by us as the purposeful structuring of cash means, which is based on two poles – accumulation of money sources (gathering) and its usage for definite purpose in the way of financing and crediting.
We have established a new termini – “finance-investment sphere” (FIS). Analyses about interrelation of finances and credit made by us give us an opportunity of proving, that in the given termini, the word “financial” is used with the meaning of funding cash sources, its purposeful structuring. In this process we consider at the same time financial, credit and investments’ economical categories.

Let’s sum up middle results of discussing new concept – “finance-investment sphere” and discuss its investment consisting parts.

The concept “investments” was brought into the native economical science from the West. In the Soviet economical science they for a long time used in the place “investments” the termini “capital placement”, which expressed the usage of the industrial factors in the sphere of real industrial activities during realization of capital projects. From one glance, this termini in its concept is identical to the “investments”, consequently it is possible to use them as synonyms. Though the termini “investments” and “investing” have the advantage towards the termini “capital placement” from linguistic and philological points of view, because they are expressed with one word. This is not only economical and comfortable in the process of working with the termini “investment” itself, but also it gives an opportunity of termini formation. More concretely: “investment process”, “investment domain”, “finance-investment sphere” – all these termini are much more acceptable.
Changing native economical termini with foreign ones is purposeful, if it really matters (by keeping parallel usage of the native termini for the inheritance). Though we must not change native economical termini into foreign ones all together, when by ordinal traditional language easy to explain private and narrow concrete processes and elements get their own termini. The “movement” of these termini is approved in the narrow professional bounds, but their “spitting out” into the economical science may turn economical language into the tangled slang.

Let’s discuss termini – “investment” and “capital placement’s” usage in the economical literature.
Investments are placement of funds into the main and circulation capital for the purpose of getting profit. “Investments in material assets – are the placements of funds into the mobile and real estate (land, buildings, furniture and so on). Investments in financial assets are the placements of funds into the securities bank accounts and other financial instruments”.

We don’t meet with the termini “investments” in the earlier economical dictionary, but we meet the combined termini “investment policy” – the union of the industrial decisions, which guarantee main directions of the capital investments, the activities of their concentration in the determinant suburbs, on which the reaching of planned rates of development of the society production is depended, balancing and effectiveness, getting more and more production and profit of the national income for every lost Ruble”. For today, in the most actual definitions, the capital investments are bounded only by financial means, when not only financial, but also the investment of natural, material-technical and informational resources takes place. Labour resources take an actual place in the investment process. They themselves fulfill this or that investment process.

A positive side of the discussed definitions is that they connect investment policy and capital placements (investments):

- economical development according to the key directions to the concentration;

- providing high rates of economical growth;

- raising an economical effectiveness, which is expressed:

a) by growing the throw off of the production and national income for every lost Ruble;

b) by fulfilling the branch structure of the investments;

c) by improving their technological structure;

d) by optimization of their further production structure.

Compared with such definition of the investments (capital placement) the definition of investments in the dictionary attaching the “Economics” seems to be unimproved: “investments – the expenses of gathering production and industrial means and increasing material reserve”. In this definition current expenses (production expenses) are mixed with the investment (capital) expense. Also, not the investment expenses but (though the investments are followed by the appropriate expenses) exactly advancing. It differs from the expenses by that the means (means) are put by returning the advanced values, also, under the conditions of growth, to which the concept-advanced capital is corresponding. the advancing may be realized in the money, natural-material and informational forms.

Except the termini “investments”, there are two more termini related with the investment. They are shown below.

“Human capital investment” – any activity provided for rising the workers labour productivity (in the way of growing their qualification and developing their abilities); at the expenses of improving the workers’ education, health and raising the mobility of the working forces”. It is very useful to use the mentioned termini, though it needs one correction: the human capital investments do not concern only workers, but also the servants, representatives of every kind of labour.
“Investment commodity, capital goods – a capital.”

In the official manuals of political economy of the reformation time the capital investments are discussed as “expenses for creating new main funds and widening, reconstruction and renewing the active ones”. In this definition the investments (capital placements) during separation of the forms (types) of further production of the main funds are bounded only by main funds (without increases of the circulation funds and insurance reserves):

a) creating new ones;

b) widening;

c) reconstruction;

d) renewing.

Also, the concept of the industrial gathering appears, at the expenses of widening of basic, circulation funds and also insurance reserves takes place”.

You’ll meet below the definitions of investments from “the course of economy”: the investments are called “placements of fund into the basic capital (basic means of production), reserves, also other economical objects and processes, which request long-termed influxing of material and cash means. “According to the division of capital into physical and money forms, the investments too must be divided into material and cash investments”.

They apportion investment commodity, to which belong industrial and nonindustrial building objects, vehicles purposed for changing or widened technical park and the furniture, increasing reserves and others.

“They call the total investments of production an investment product, which is directed towards keeping and increasing the basic capital (basic means) and reserve. Total investments consist of two parts. One of them is called the depreciation; it represents important investment resources for compensation of renewal till the level of before industrial usage, wearing out and repairing of the basic means. Second consisting part of the total investments is represented by net investments – capital investments for the purpose of increasing basic means”. Depreciation is not a compensation resource of wearing the basic funds out, but it is the purposeful financial source of such resources.
Human capital investment is “a specific kind of investments, mostly in education and health protection”.

“Real investments are the investments in the economical branches and also, they are kinds of economical activities, which provide influxing the increases of real capital, that is increasing material values of the industrial means”. We can agree with such definition with one specification that material and nonmaterial values too belong to the real capital (wealth), consequently science-researching experimental-construction results, various information, education of he workers and others. Such service as organization of the excitable games, also the service of redistribution social wealth from one private person to another (except charity).

“Financial investments represent placement of funds into the shares, obligations, promissory notes, other securities and instruments. Such investments, of course, do not give increases of the real material capital, but they help getting profit, consequently at the expenses of changing the course of the securities in the time of speculation, or distinguishing the course in different places of sell and purchasing”. We share wholly such definition, hence it follows that financial investments (if it is not followed by real investments as a result) do not increase real material wealth and real nonmaterial wealth. According to this context, the expression below is very important: “we must distinguish financial investments, which represent placement of the funds in the ways of selling and purchasing the securities for the purpose of getting profit and financial investments, which become cash and real, moved to real physical capital.”

In the “economical course” quoted before long and short-termed investments are separated. Recognizing the existence of the bounds between them, the authors ascribe short-termed investments to “one month or more” investments. If we get such conditioned criteria, that we can call the investments which overcome the terms of some months, long-termed ones, which is very doubtful and we don’t agree with it. A long-termed character of the fund placement is a significant feature of the investments (short-term doesn’t combine with the concept of investments). Principally, it would be better to point out quick compensative, middle termed compensative and long-termed compensative investments:

- less then 6 months – quick compensative;

- from 6 months up to the year and a half – middle termed compensative;

- more then the year and a half – long termed compensative.

We stopped at the definition of the investments in the capital work “economical course” for the special purpose, as, in it the author tried to discuss the concept of investments systemically and quite completely, herewith the book is published just now.

We’ll return to the discussion the definition economical category of “investments” in different publications in the following chapter. The definitions given here are quite enough for having a notion of the level of lighting up the given category in the economical literature.
What conclusions may be made according the definition of the mentioned economical category in the published works, except the made notions and specifications?

There is quite deeply, concretely and thoroughly defined the concept of “investments”, different definitions in the economical literature; but mostly in every works about the investments discussed by us until now, there is not opened the essence of investments as an economical category. In every monograph , even if it has a title investment, as an economical category , there is given only the definition, concept of investments. But, as the Academician Vasil Chantladze explains, “a concept is a discussion, which proves something about the distinguishing feature of the researched object. A concept out of much essential characteristic features represents only one, and essential in it is only – definition”.

But the categories are much wider; it is “a key, the most fundamental concept of every science”. Economical categories theoretically represent real, objectively existed productive relations. A category is the defining of occasions of existed characters, connections, relations of the objective world. Generally, any educational process is fulfilled by the categories, which give opportunities for dividing the processes and occasions semantically, for expressing the definitions of a subject and realize their specific peculiarities and economical relations of a material world.
Our goal is exactly to substantiate investments – as an economical category and also, as a financial category in the narrow understanding.

Here we apply for another manual thesis made by the academician Vasil Chantladze: “every financial relation is an economical one and every financial category is and economical one, but not every economical relation and economical category is financial relation and financial category”.
In the process of defining the investments, it is important to take in mind the sides of resources, expenses and incomes, because investment, from one side, is the result of the manufacture’s activity, and, from another one, – a part of income, which, in this case, is not used for usage.
Another occasion: it is advisable to discuss investments in two aspects: as a category of reserve and flow, which will reflect exactly the connection between “placement of funds” and “investments”.