2/18/2022

Outline
• Deposits
• Government Savings Schemes
• Money Market Instruments
Chapter 2 • Bonds or Debentures
• Equity Shares
INVESTMENT ALTERNATIVES • Mutual Fund Schemes
• Insurance Products
Choices Galore • Retirement Products
• Real Estate
• Precious Objects
• Financial Derivatives

 2017 by Prasanna Chandra  2017 by Prasanna Chandra

Deposits Government Savings Schemes

• Bank Deposits
• Public Provident Fund Schemes
• Post Office Savings Account

• Post Office Time Deposits • Senior Citizen’s Saving Scheme

• Post Office Monthly Income Scheme

• National Savings Certificate
• Company Fixed Deposits

 2017 by Prasanna Chandra  2017 by Prasanna Chandra

 2/18/2022

Money Market Instruments Bonds or Debentures

• Treasury Bills
• Central Government Securities
• Commercial Paper
• State Development Loans
• Certificate of Deposit
• Public Sector Undertaking Bonds
• Call Money Market
• Private Sector Debentures
• Repos
• Preference Shares
• Collateralised Borrowing and Lending Obligations

 2017 by Prasanna Chandra  2017 by Prasanna Chandra

Equity Shares Stock Market Classification

• Terminology – Authorised, Issued, Paid-up

• Rights of Equity Shareholders – Voting, Div, Residual, Prop. • Blue-chip Shares

• Stock Market Classification – Blue-chip, Growth, Income, • Growth Shares

Cyclical, Defensive, Speculative • Income Shares

• Peter Lynch’s Classification – Slow growers, Stalwarts, Fast • Cyclical Shares

growers, Cyclical, Turnarounds, Asset plays
• Defensive Shares
• Nature of Equity Shares – Investment Char.(increase over
• Speculative Shares
time) and Speculative Char. (fluctuating)

 2017 by Prasanna Chandra  2017 by Prasanna Chandra

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Peter Lynch’s Classification Mutual Fund Schemes

Schemes Galore
• Slow Growers
I. Equity Schemes
• Stalwarts • Diversified equity schemes
• Index schemes
• Fast Growers • Sectoral schemes
• Tax planning schemes
II. Hybrid (Balanced) Schemes
• Cyclicals
• Equity-oriented schemes
• Debt-oriented schemes
• Turnarounds • Variable asset allocation schemes
III. Debt Schemes
• Asset Plays • Gilt schemes
• Mixed schemes
• Floating rate debt schemes
• Money market schemes
 2017 by Prasanna Chandra  2017 by Prasanna Chandra

Mutual Fund Regulation Pros and Cons of Mutual Funds

Pros Cons
• Diversification • Expenses
• Filing of Offer Document with SEBI
• Professional management • Lack of thrill
• No Guaranteed Returns
• Liquidity
• NAV Published Regularly • Tax advantages
• Comprehensive regulation
• Investment Are Subject to Restrictions
• Transparency
• Costs Are Subject to Certain Ceilings

 2017 by Prasanna Chandra  2017 by Prasanna Chandra

 2/18/2022

Insurance Products Retirement Products

• Term Assurance Plans

• Traditional Investment- Oriented Plans • Mandatory Retirement Schemes
• Money Back Plan • Employees’ Provident Fund Scheme, 1952
• Endowment Plan • Employees’ Pension Scheme, 1995
• Whole Life Plan • New Pension Scheme
• Children’s Plan
• Unit Linked Insurance Plans • Voluntary Retirement Schemes
• Riders • Immediate Annuity
• Tax Breaks • Deferred Annuity
• Considerations in Choosing a Policy
 2017 by Prasanna Chandra  2017 by Prasanna Chandra

Real Estate Pros and Cons of Real Estate

For the bulk of the investors, the most important asset in their portfolio is Pros Cons
a residential house. In addition to a residential house, the more affluent investors
are likely to be interested in the following types of real estate. • Rental yield (or saving) • Large ticket size

 Semi-urban land • Attractive capital appreciation • Legal disputes

 A second house
 Commercial property
 Agricultural land • Psychic pleasure • Illiquid markets
 Time share in a holiday resort
• Low risk • High spread and commissions
Historically, real estate in India has been financially the most rewarding
asset class. The pros and cons of investing in real estate are as follows:
• Tax benefits • Maintenance effort

 2017 by Prasanna Chandra  2017 by Prasanna Chandra

 2/18/2022

Precious Objects
Financial Derivatives
• Gold and Silver A derivative is an instruments whose value depends on
the value of some underlying asset.

• Precious Stones Futures A futures contract is an agreement between two

parties to exchange an asset for cash at a predetermined
future date for a price that is specified today.
• Art Objects
Options An option gives its owner the right to buy or sell
an underlying asset on or before a given date at a
predetermined price.

 2017 by Prasanna Chandra  2017 by Prasanna Chandra