What is the difference between a direct investment and a portfolio investment?

Direct investment and portfolio investment are two different types of investment. Direct investment is when an investor puts money into a business or other investment opportunity for the purpose of controlling a stake in the operation or to obtain some form of influence. Direct investments are usually larger investments, which are often long-term commitments. This type of investment is generally done to gain financial returns, but also to maintain power and influence in the operation. On the other hand, portfolio investment is when an investor puts money into a variety of different investments, often with a much smaller amount than with direct investment. Portfolio investments are usually made with the purpose of diversifying the investor’s capital risks and to spread out any potential losses. Portfolio investments are usually shorter-term than direct investments, and investors may regularly switch from one investment to another. In Washington, each type of investment has its own set of legal requirements and regulations. For example, for direct investments, investors must register with the Washington Department of Financial Institutions, while portfolio investments may fall under the securities laws administered by the Washington State Securities Division.

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What is the difference between a direct investment and a portfolio investment?

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