Escolar Documentos
Profissional Documentos
Cultura Documentos
Sandesh Nayak
Introduction
Instead of putting all Eggs in a Single Basket it is better to put eggs in different baskets
Portfolio management
When a Single security is analyzed it is called security analysis, If Securities are combined to blend together to give maximum returns it is called portfolio management.
Study of different kinds of investment alternatives Analysis of single and combination securities to form a portfolio
market
Features
and management
approaches
to
portfolio
INVESTMENT
An investment is the commitment of funds made with an expectation of some positive returns in the form of interest, dividends, pension benefits, etc. Two essential aspects of investments: Waiting for returns Element of risk
For an Economist, Investment means Net additions to the economys capital stock.
From Finance point of view, It is a commitment of a persons funds to derive future income in form of interest, dividend,rent, etc
Time Horizon
Risk
Limited Risk
Short term planning holding assets even for one day with objective. High Profits and Gains
Return
Use of Funds
Consistent over long period even though its moderate Own Funds through savings
Decisions
Investment
Purchase of a financial asset that produces a yield that is proportionate to the risk assumed over some future investment period
Speculation Buying and selling activities with the expectation of getting profits from the price fluctuations
Gambling consists of uncertainty and high stakes for thrill and Excitement. Gambling is based on Tips and Rumors Typical Examples of Gambling are Horse Racing , Game of Cards, Lottery etc.
The simultaneous purchase and sale of an asset in order to profit from a difference in the price.
Objectives of Investment
Return Risk Liquidity or marketability Hedge against Inflation Safety
INVESTMENT PROCESS
The investment process can be divided in to 5 stages: 1. Investment Policy 2. Investment/Security Analysis 3. Investment/Security valuation 4. Portfolio Construction 5. Portfolio Evaluation
Investment Process
Investment Policy
Investment Process
Investmen t Analysis
Market/Indu stry/Compa ny
Investment Process
Investment Valuation
Investment Process
Portfolio Construction
Investment Process
Portfolio Evaluation
Appraisal, Revision