INVESTMENT

MANAGEMENT
 INTRODUCTION OF
INVESTMENT
• The income that a person receive may be
used for purchasing goods and services
that he currently requires or it may be
saved for purchasing goods and services
that he may require in the future. In the
other word, income can be what is spent
for current consumption or saved for
future consumption.
• Investment is one’s fund to be used by another
party for productive activity.
• Investment means conversion of cash or money
into a monetary asset or a claim on future money
for a return. This return is for saving, reward for
waiting for a future consumption, for taking a
risk.
• It is an addition to the capital.
• Financial investment is an exchange of financial
claims- stocks and bonds, real estates etc.
 What is Security?
•A security is an instrument of promissory note or
a method of borrowing or lending or a source of
contributing to the funds needed by a corporate
body or non-corporate body.

• Investment in capital market is in various financial

instruments, which are all claims on money. These
instruments may be of various categories with
different characteristics. These are all called
securities.
The Securities Contracts Regulation Act (1956) has
defined the security as inclusive of share, scripts,
stocks, bonds, debenture stock or any other
marketable securities of a like nature in or any
debentures of a company or body corporate, the
Government and semi-government body etc. It
includes all rights and interests in them including
warrants and loyalty coupons etc., issued be any of
the bodies, organizations or the Government. The
derivatives of securities and Security Index are also
included as securities
 Characteristics of Investment
• All investments are characterized by
certain features. let us analyze these
characteristic features of investment
2. Return
• Risk
• Safety
• Liquidity
1. Return :-
Primary objective of investment is to deriving
a return.

2. Risk :-
The risk may relate to loss of capital, delay in
repayment of capital, non payment of interest
of capital or variability of return.
3. Safety :-
The on investment implies the certainty of
return of capital without loss of money or
time.

4. Liquidity:-
An investment which is easily saleable or
marketable without loss of money and without
loss of money and without loss of time is said
to possess liquidity.
 OBJECTIVES

1. Maximization of return

3. Minimization of risk

5. Hedge against inflation

 Investment Avenue
• There are large number of investment
avenue for saver in India. Some of them are
marketable and liquid while others are non
marketable. some of them are highly risky
while some of others are almost risk less.
The investor has to choose proper avenue
from among them depending on his
preference, needs and ability to assume risk.
• Investment avenue can be broadly categories under
the following heads.
2. Corporate security
3. Deposits in banks and non banking companies.
4. UTI and others mutual funds scheme
5. Post deposits and certificates
6. Life insurance policies
7. Provident fund schemes
8. Government and semi government securities.
 Investment Activity
saver

IN V E S T O R

F IN A N C IA L A S S E T S M AR KE TAB LE ASSE TS P H Y S IC A L A S S E T S
CASH SHARES H O U S IN G , L A N D , B U IL D IN G
BANK B O N D S , G O V T . S E C U R IT IE S G O L D , S IL V E R
P F , L IC ,P O C E R T IF IC A T E S M .F . U T I CO NSUM ER DURABLES
SPECULATION
AND
INVESTMENT
• Investment and speculation are two term
which are closely related. Both involve
purchase of assets like shares and securities.

• Traditionally, investment is distinguished from

speculation with respect of three factors.
4.Risk
5.Capital gain
6.Time period
INVETMENT, RISK &
RETURN
• Investment involving both risk and return, the
investor has to make a study of the alternative
avenues of investment- their risk and return
characteristics and make proper projection or
expectation of the risk and return of the alternative
investments under consideration.
 RISK OF INVESTMENT
Risk means: “……possibility of loss or injury…….
the degree or probability of such loss.” In
considering economic and political factors,
investors commonly identify following risk
involved in investment.
•Market Risk.
•Business and Financial Risk.
•Interest Rate Risk.
•Social and Regulatory risk.
•Other Risk.
 RISK-RETURN
RELATIONSHIPS
Risk and Return
Return Hedge
Financial Future

Warrants
Options
Equity Share

Loan, Debenture
GS

Risk
THANKING YOU