The Role of Financial Asset Valuation in Mitigating Investment Risks

The activity of any economic entity is associated with a certain level of risk. The risk factor influences the strategic behavior of entities, the potential return on assets and the development of individual economic units. In recent years, two external factors that have destabilized the economies of many countries have appeared at once: the global COVID-19 pandemic and political. Taking into account the influence of the global uncertainty factor, studies aimed at identifying effective methods of investment planning and risk mitigating seem to be extremely relevant.The valuation of financial assets makes it possible to draw reasonable conclusions about the fair value of this asset in the future and, accordingly, about its investment attractiveness. In the context of global economic uncertainty, the most reliable method of investment appraisal is the discounted cash flow method, which involves creating a financial model based on the company's internal cash flows.Despite the obvious advantages of financial statements analyses and investment valuation, many investors neglect to conduct primary analytical research. When developing their investment strategy, such investors take into account less objective criteria, such as brand awareness, the company's position in the market, and the "collective mood" of the stock market in relation to this company.Nowadays investors are paying more and more attention to some non-price factors, for intense, they can take into account the company's ESG rating, long-term goals and strategic objectives, the company's focus on innovation or the introduction of advanced technologies into the company's work processes. The world community expects that economic entities will perform not only the traditional functions of making a profit, but will also take on the social and environmental obligations.As part of this study, the author conducted a survey among private non-professional investors, the respondents were asked to answer ten polyvariant questions. The questions covered the following topics: the period of opening an investment account; tax investment deduction; sources of information for making investment decisions; factors influencing the choice of one or another investment object; methods of trading on the stock exchange; investment analysis and evaluation tools used by the respondents.The results of the survey made it possible to evaluate investment strategies, identify the most common methods of primary analysis of financial statements and determine the role of investment evaluation mechanisms for modern investors