INVESTMENT ANALYSIS & PORTFOLIO MANAGEMENT Lecture # 1 Shahid A. Zia Dr. Shahid A. Zia.
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Transcript of INVESTMENT ANALYSIS & PORTFOLIO MANAGEMENT Lecture # 1 Shahid A. Zia Dr. Shahid A. Zia.
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INVESTMENT ANALYSISINVESTMENT ANALYSIS&&
PORTFOLIO MANAGEMENTPORTFOLIO MANAGEMENT
Lecture # 1
Dr. Shahid A. ZiaShahid A. Zia
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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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Assets
Financial Assets Real Assets e.g. bond, stock e.g. land
Assets are things that people own.
Investment Alternatives
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There are three broad categories of securities.
Securities
EquitySecurities
e.g. common stock
Derivative Assets
e.g. futures, options
Fixed IncomeSecurities
e.g. bonds,preferred stock
Investment Alternatives
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Why invest ???
Three Reasons for Investing
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.
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To consume, to save, or to invest a rupee that is earned ?
Both saving and investing amount to consumption shifting through time.
Investing
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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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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Investing
You consume less than you save and then from saving you can always think about investment.
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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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Portfolio Management
How to manage different sectoral things.
“Don’t Keep all your eggs in one basket”
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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