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F&N Investment Portfolio Management Guide

This document provides an introduction to investments. It defines investment as committing funds with the aim of earning income or capital appreciation over time. The economic definition of investment is the net addition made to capital stock used for production. Financial investment allocates money to assets expected to yield gain over periods of time. Key investment attributes discussed are return, risk, liquidity, tax benefits, safety, and convenience. The document also outlines the portfolio management process and factors that influence investment decisions for individuals, governments, pension funds, and corporations.

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19 views16 pages

F&N Investment Portfolio Management Guide

This document provides an introduction to investments. It defines investment as committing funds with the aim of earning income or capital appreciation over time. The economic definition of investment is the net addition made to capital stock used for production. Financial investment allocates money to assets expected to yield gain over periods of time. Key investment attributes discussed are return, risk, liquidity, tax benefits, safety, and convenience. The document also outlines the portfolio management process and factors that influence investment decisions for individuals, governments, pension funds, and corporations.

Uploaded by

abhijeet1008
Copyright
© Attribution Non-Commercial (BY-NC)
We take content rights seriously. If you suspect this is your content, claim it here.
Available Formats
Download as PPT, PDF, TXT or read online on Scribd

INTRODUCTION TO INVESTMENTS

Investment is the employment of funds on assets with

the aim of earning income or capital appreciation. What one does with his savings to make them increase over time is investment.

An investment is the current commitment of income for a period of time in order to derive future payments that will compensate the investor for : 1. The time the funds are committed, 2. The expected rate of inflation, and 3. The uncertainty of the future payments.

Investment in a general sense:

For a layman, Investment means some monetary commitment. Economic Investment: To the economist, investment is the net addition made to the nations capital stock that consists of goods and services that are used in the production process. Financial Investment It is the allocation of money to assets that are expected to yield some gain over a period of time.

RETURN

RISK
LIQUIDITY HEDGE AGAINST INFLATION

SAFETY

INVESTMENT ATTRIBUTES RETURN RISK LIQUIDITY TAX SHELTER

CONVENIENCE

Analysis

Valuation

Portfolio Construction

Portfolio Evaluation

-Investible Fund - Objectives -Knowledge

-Market -Industry -Company

-Intrinsic Value -Future Value

-Diversification -Selection and Allocation

-Appraisal -Revision

PORTFOLIO MANAGEMENT PROCCESS


SPECIFICATION OF INVESTMENT OBJECTIVES AND CONSTRAINTS CHOICE OF ASSET MIX

FORMULATION OF PORTFOLIO STRATEGY SELECTION OF SECURITIES

PORTFOLIO EXECUTION

PORTFOLIO REVISION

PORTFOLIO EVALUATION

Liquidity

Time Horizon
Tax Concerns Legal and Regulatory Factors

Unique needs and preferences


Safety Temperament

An Individual

A Government
A Pension Fund A Corporation

Accumulation Phase : Early to middle years

Consolidation Phase : Past the midpoint of their

careers. Spending Phase : Retire Gifting Phase : Similar to Spending Phase

Net Worth Accumulation Phase a)Long term b)Short term Consolidation Phase a) Long term b) Short term

Spending Phase/ Gifting Phase a) Long term b) Short term

25

35

45

55

65

75

85

Age

Near term, high priority goals

Long term , high priority goals


Lower priority goals

INVESTMENT V/S SPECULATION/GAMBLING


BASIS
Planning Horizon

INVESTOR
Long

SPECULATOR
Short High High

GAMBLER
Short High Less

Risk Moderate Disposition Return Modest Expectation Basis For Decisions Leverage Fundamental No

Technical Entertainment High High

APPROACHES TO INVESTMENT

DECISION MAKING
Fundamental Approach
Psychological Approach
Academic Approach

Mp Iv
Random Walk Positive Link..Risk & Return

Eclectic Approach

QUALITIES FOR SUCCESSFUL


INVESTING Contrary Thinking Patience

Composure
Flexibility And Openness Decisiveness

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