INVESTMENT

• It is the sacrifice of current money for future

benefits
• An investment is an asset or item accrued with the
goal of generating income or recognition.
 Investment attributes
• Rate of returns
• Risk
• Marketability
• Tax shelter
• Convenience
 Investment Process
• Specification of Investment objectives and
constraints
• Choice of asset mix
• Formulation of Portfolio strategy
• Selection of securities
• Portfolio execution
• Portfolio Revision
• Portfolio evaluation
 Investment Versus Speculation
Investment Speculation
• Long planning horizon • Short planning horizon
• Less risky • More risky
• Modest Return expected • High return expected
• Fundamental Factors • Technical charts
• Own funds • Borrowed funds
 Investment
• Arbitrage
• Gambling
 Investment Alternatives
• Non marketable financial assets:
• 1)Bank deposits
• 2)Post office deposits
• Equity shares
• Bonds
• Money market instruments
• Mutual funds
• Life insurance
• Real Estate
• Gold and silver
• Derivatives
 Macroeconomic Factors affecting
Investments
• Agriculture
• Gross Domestic Product (GDP)
• Inflation
• Rates of interest
• Political stability
• Others
 Questions
1. How is Investment different from Speculation
and Gambling?
2. What is Arbitrage?
3. Write a note on Investment Scenario in India.
4. Write a note on how are various Macro
economic factors influence Investments?