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INVESTMENT ANALYSIS

&
PORTFOLIO MANAGEMENT

LECTURE 1
The Course
• INVESTMENT
• ANALYSIS
• PORTFOLIO
• MANAGEMENT

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Text book

• PRACTICAL INVESTMENT MANAGEMENT, 3rd


Edition, (Southwestern/Thomson)
• Robert A. Strong
• ISBN 0-324-17164-1
• INVESTMENT ANALYSIS and MANAGEMENT,
9th EDITION, (by Charles P. Jones)

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Investments

Investment means to invest something in


some where.

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Uses of Investments
Three uses of investments;
1. Consumption
2. Savings
3. Investing

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Savings
It is very important to see that how you
save the money.
• You save money in your home at secure
place.
• Committees.

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Channels of Savings

• Banking
• Non-financial institutions
• National saving schemes

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Investing
You consume less than you save and then
from saving you can always think about
investment.

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Investing
To consume, to save, or to invest
a rupee that is earned ?

Both saving and investing amount to


consumption shifting through time.

However, saving involves little, if any,


risk, while investing is a risky
endeavor.

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Fundamental Analysis
Fundamental Analysis include the evaluation of
the;
• Balance Sheet
• Annual Report
• Profit & Loss Figures
• Profitability Ratios
• Liquidity Ratios
• Operational Ratios

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Technical Analysis
Focus on the movement of the share prices
going up or going down.

Scenario Analysis

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Portfolio Management

How to manage different sectoral things.

“Don’t Keep all your eggs in one basket”

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Investment Alternatives

Assets are things that people own.

Assets

Financial Assets Real Assets


e.g. bond, stock e.g. land

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Three Reasons for Investing
Why invest ???
People invest to …
• supplement their income
– Dividends and Interest.
• earn capital gains
– Appreciation refers to an increase in the value
of an investment.
• experience the excitement of the
investment process. 14
Investment Alternatives
There are three broad categories of securities.

Securities

Equity Fixed Income Derivative


Securities Securities Assets
e.g. common e.g. bonds, e.g. futures,
stock, preferred stock options
mutual funds

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Investment Analysis and Portfolio
Management

Mutual fund are also used in the portfolio.


• Collection of eggs.
• Collection of different shares, cash and
foreign exchange.

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Bonds
• Term Finance Certificates
• Bearer bonds
• Fixed Income bonds
• Euro bonds

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