Post on 02-Jun-2018
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Security Analysis & Portfol io
Management
Dr. Anirban Ghatak
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Investment Alternatives
Investment
Avenues
Equity
Shares
Money MarketInstruments
Life Insurance
Policies
Precious
Objects
Non-
marketable
Financial
Assets
Bonds
Mutual Fund
Schemes
Real Estate
Financial
Derivatives
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Investment Attributes
RETURN
RISK
LIQUIDITY
TAX SHELTER
CONVENIENCE
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Current yield Capital
appreciationRisk
Marketability/Liquidity Tax Shelter Convenience
EquityShares
Low High High Fairly high High High
Non-
convertible
DebenturesHigh Negligible Low Average Nil High
Equity
Schemes
Low High High High High Very high
Debt
SchemesModerate Low Low High
No tax on
dividendsVery high
Bank
DepositsModerate Nil Negligible High Nil Very high
PublicProvident
Fund
Nil ModerateNil
AverageSection 80 C
benefit
Very high
Life
Insurance
PoliciesNil Moderate
NilAverage
Section 80 C
benefitVery High
Residential
HouseModerate Moderate Negligible Low High Fair
Gold andSilver Nil Moderate Average Average Nil Average
Return
Evaluation Of Various Investment Avenues
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Investment Vs. Speculation
INVESTOR SPECULATOR
PLANNING LONG SHORTHORIZON
RISK MODERATE HIGHDISPOSITION
RETURN MODEST HIGHEXPECTATION
BASIS FOR FUNDAMENTAL TECHNICALDECISIONS
LEVERAGE NO HIGH
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CLASSIFICATI ON OF FINANCIAL MARKETS
DEBT MARKET
NATURE OF CLAIM
EQUITY MARKET
MONEY MARKET
MATURITY OF CLAIM
CAPITAL MARKET
PRIMARY MARKET
SEASONING OF CLAIM
SECONDARY MARKET
CASH OR SPOT MARKET
TIMING OF DELIVERYFORWARD OR FUTURES MARKET
EXCHANGE-TRADED MARKET
ORGANISATIONAL
STRUCTURE OVER-THE-COUNTER MARKET
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PORTFOLIO MANAGEMENT PROCCESS
SPECIFICATION OF
INVESTMENT OBJECTIVES
CHOICE OF ASSET MIX
FORMULATION OF
PORTFOLIO STRATEGY
SELECTION OF SECURITIES
PORTFOLIO EXECUTION
PORTFOLIO REVISION
PORTFOLIO EVALUATION
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Common Errors In Investment Management
INVESTORS APPEAR TO BE PRONE TO THE FOLLOWINGERRORS IN MANAGING THEIR INVESTMENTS.
INADEQUATE COMPREHENSION OF RETURN AND RISK
VAGUELY FORMULATED INVESTMENT POLICY
NAVE EXTRAPOLATION OF THE PAST
CURSORY DECISION MAKING
SIMULTANEOUS SWITCHING
MISPLACED LOVE FOR CHEAP STOCKS
OVER-DIVERSIFICATION AND UNDER-DIVERSIFICATION
BUYING SHARES OF FAMILIAR COMPANIES
WRONG ATTITUDE TOWARD LOSSES AND PROFITS
TENDENCY TO SPECULATE
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Qualities for Successful Investing
CONTRARY THINKING
PATIENCE
COMPOSURE
FLEXIBILITY AND OPENNESS
DECISIVENESS
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SUMMING UP
A bewildering range of investment avenues is available.
For evaluating an investment, the following attributes
are relevant: rate of return, risk, marketability, tax
shelter, and convenience.
A financial market is a market for creation and
exchange of financial assets.
Financial markets can be classified by the nature of
claim, maturity of claim, seasoning of claim, timing of
delivery, and organisational structure.
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Portfolio management is a complex activity which can
be broken down into a series of steps. The stock market is thronged by investors pursuing
diverse investment strategies.
Investors are prone to various errors
The qualities of contrary thinking, patience,
composure, flexibility, and decisiveness are required tosucceed in the investment game.