Investment World Is Changing Fast

History of Investment

The investment world has been in existence for a couple of centuries and until a few decades ago the investment industry had a small number of partnerships and they earned their share of income from the commissions on behalf of their clients. It was the need of capital of the Americans during the Civil War that drew the attention of Europeans who later involved in private banking instead of assorted mercantile activities. However, after the Civil war the financial services market met a radical change. Post World War two there was devastation all over and the existence of the business seemed to be a thing of the past. But the investment industry saw a revival later in the 1980s and 90s.

Changes in the last decade

And all was well until there was a huge crisis that erupted from the aftermath of the fall of the Lehmann Brothers. This left a huge impact, but negative in the investment banking sector which later affected every other industry. And it was the end of an era in the investment world when one of the powerful financial players Goldman Sachs and Morgan Stanley decided to function as commercial banks.

Since then the adaptation to the losses has been difficult and apart from private firms, the common people also went through a series of losses that they found complicated to get over.

After a time-consuming recovery from the financial disaster, the investment industry saw a bright resurgence and the people came across new investment ideas that brought about the same old interests in the minds of the investors. Many of them have showed a keen interest in both long term and short term investments and earned great profits.

There were modifications in the rules and regulations regarding the investment banking and the financial institutions which were previously denied permission to indulge in consumer banking were later permitted as there was a possibility of the institutions becoming more feasible fiscally when they provide direct services to the consumers.

Changes have also been brought in the method of packaging and reselling of the home mortgage loans. This is because the investment experts felt that the reason behind such financial crisis is due to the investments made in the packages of the higher risk loans by the institutions and individuals. And the investment world is yet to meet much more amelioration and bring about further change.

Article written by: Jessika Carolin, jcarolin02[at]gmail.com

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3 thoughts on “Investment World Is Changing Fast”

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