Ch1-Intro to Capital markets.

yes this also is in the syllabus

MOHIT SHARMA
What is investment?
Commitment of funds for a period of time with the
expectation of receiving more than the current outlay.
(getting return on the risk taken)
RETURNS could be in the form of annual income or
appreciation in price.
Where to invest-
In various assets like
buildings,shares,bonds,commodities etc.
He may also invest in a combination of such assets(this is
also known as the portfolio, how wide his portfolio is
depends on his risk taking ability as has been discussed
deeply by Mr.Gurcharan.
Types of assets
TANGIBLE(real assets,commodites,luxury
collectibles)
FINANCIAL –represent a claim on physical assets or
future cash flows(FD,saving
deposits,shares,bonds,derivatives)
Are of two basic types-
1.Personal Contracts[PPF(15yr
lockin),Insurance,pension plans]
2.securites[debt(central/state bonds,corporate,pubilc
sector),equity,derivatives]
INTANGIBLE(trademarks,goodwill,patents)
WHY invest?
Money for emergencies(eg.unexpected kids)
to beat inflation(aag lagi ahi duniya mein)
Acquiring other assets(tune yeh kese liya,mein bhi
loonga)
Paying for education(hahah)
Travel and hobbies(kebab,sharab,shebab)
Charity and retirement(allah ke naam pe dede baba)
PS-don’t be judgemental ,half of this is according to
Rohini Singh
BASIS Investment Speculation
Defination Long term commitment to funds Seeks abnormally high
with the expectations of returns in return mainly due to
the form of periodic returns fluctuation in prices over
or/and capital appreciation a very short period,but
in the process incurs
more risk
Return moderate high
expectaions

Time Wants to stay for the long run Short period

Basis of Based on reasearch and other Usually

decision techniques invovlving analysis of impulses,hunches,rumor
past data for future predictions s
Also
There are choices even in the different types of assets
for investment
E.g in tangible one can invest in real estate,gold,art.
Depending on what your purpose of investment is.
Say it is liquidity,then gold is the best.
But nowadays one can aslo invest in real estate via
REITS(real estate investment trusts) and real estate
mutual funds.
Dividend income is tax free
 interest income is taxable
“The most valuable commodity I know of is
information. ”

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