Investor's dictionary: who are qualified investors?

Investor's dictionary: who are qualified investors?

You may have encountered the concept of a “qualified investor” in the articles on investing. Who are they and what does this status imply? Today we decided to cover this concept in more detail.

Any person or company can invest money in various assets and receive passive income. But some of the most profitable investment instruments are not available to ordinary traders due to the high level of risk. To diversify your portfolio and invest in non-standard assets, you need to get the status of a qualified investor.

High-risk assets include:

- Shares of foreign companies.
- Eurobonds that are purchased outside the stock exchange.
- Shares of venture investment funds, hedge funds and other closed-end investment funds. In this case, the investor's money remains in the fund for the entire duration of its existence without the possibility of an early withdrawal.
- Structured notes whose yield depends on the price or index of the underlying asset. These securities can be dependent on stocks, oil, gold, etc.
- Depositary receipts and other instruments that indicate that they are only available to qualified investors.

How do you become a qualified investor and "skim the cream off” by purchasing the most profitable assets? Get to know the requirements for the qualified investor status in your country!

For example, to obtain the status of a qualified investor in Russia, you should meet at least one of these requirements:

- personal investment portfolio amounting to at least 6 million rubles including all the assets and funds on the accounts;
- a college degree in economics or a document confirming your financial market expertise (qualification certificate of an auditor, insurance actuary, financial specialist, etc.);
- more than 3 years of work experience as an analyst or trader in a company that deals with securities and derivatives, or at least 2 years of work experience in a company holding the status of a qualified investor;
- active practice in trading: the investor must make at least 10 transactions on a quarterly basis with the total price of these transactions exceeding 6 million rubles, with at least 1 transaction per month.

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