What Is an Investment Position?

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  • Written By: Malcolm Tatum
  • Edited By: Bronwyn Harris
  • Last Modified Date: 17 September 2019
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An investment position is a term that is used to describe the current status of the assets and liabilities relating to a particular nation, with the figures on the nation’s financial statement being compared to those of other countries. The position will include documentation about investment activities, such as the amount of foreign holdings that are owned by domestic corporations and investors, as well as domestic assets that are owned by foreign interests. A compilation of this type of data makes it possible to ascertain the financial stability of the nation overall, and how that stability compares with other countries.

The preparation of an investment position requires careful scrutiny of the financial activity that is occurring with the nation during a specified time period. The effort requires the collection of a great deal of data, then carefully arranging the information under relevant line items. It is not unusual for this type of statement to be prepared on a quarterly or even a monthly basis, making it easier to compare the current period with recently closed periods, as well as evaluate the current position as compared to what is happening in other nations.


An investment position is usually considered to be in one of three different states. One state or condition is known as surplus, a term that implies that domestic investors are holding more foreign assets than foreign investors are holding in domestic assets. In a deficit state, the data included in the investment position indicates that foreign investors are holding more domestic assets than domestic investors are holding in the way of foreign assets. The investment position is considered balanced when there is little to no difference between what foreign and domestic investors are holding in terms of both domestic and international investments.

Assessing the content of an investment position over several periods can be extremely helpful for investors as well as financial analysts. By identifying the balance between foreign and domestic assets as well as how those figures compare to nations with a similar gross domestic product and import/export ratio, it is easier to spot emerging trends that may have an impact on the nation’s economy. The information learned by compiling the data for the position statement can often provide clues on how to support trends that are anticipated to strengthen the economy, as well as slow down and maybe event reverse trends that could lead to unfavorable economic situations.


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