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Investment and Portfolio Management

1. Investing is the process of buying assets that increase in value over time and provide returns in the
form of income payments or capital gains.
2. Investment management is the management of money or any kind of assets owned by investors. It is
the process through which the investment manager seeks to accomplish defined investment
objectives by deploying capital in an appropriate mix of financial instruments and other assets.
3. A portfolio is a collection of investments
4. Forms of investment
a. Stocks - a security that represents a fractional ownership in a company.
b. Savings account - is an interest-bearing deposit account held at a bank or other financial
institution
c. Time Deposit Account - is a type of interest-bearing bank or credit union account that requires
you to leave your money in the account for an agreed-upon length of time, or term.
d. Special Saving Deposit - a savings account maintained for those who are interested to save
their money to get interest and effect payments through cheque
e. Trust Investment - is a public limited company that aims to make money by investing in other
companies.
f. Treasury Bills or popularly known as T-Bills are peso-denominated short-term fixed income
securities issued by the Republic of the Philippines through its Bureau of Treasury.
g. Commercial paper, also called CP, is a short-term debt instrument issued by companies to
raise funds generally for a time period up to one year. It is an unsecured money market
instrument issued in the form of a promissory note
h. Mutual Funds - company that pools money from many investors and invests the money in
securities such as stocks, bonds, and short-term debt.
i. Bonds - used by governments or companies to raise money by borrowing from investors.
j. Share of stock is a unit of ownership in the business. The number of shares determines how
big of a piece of ownership in a business you have.
k. Common stock is a type of tradeable asset, or security, that equates to ownership in a
company. If you own common stock in a company, you have the right to vote on things like
corporate policies and board of director decisions.
l. Preferred stock is a class of stock that is granted certain rights that differ from common stock.
Namely, preferred stock often possesses higher dividend payments, and a higher claim to
assets in the event of liquidation.
m. Derivative is a security with a price that is dependent upon or derived from one or more
underlying assets. The derivative itself is a contract between two or more parties based upon
the asset or assets.
n. Real estate investing refers to the purchase of property as an investment to generate income
rather than using it as a primary residence. It can be understood as any land, building,
infrastructure and other tangible property which is usually immovable but transferable.
o. Commodities are physical products that you can invest in. They are common in futures
markets where producers and commercial buyers – in other words, professionals – seek to
hedge their financial stake in the commodities.
Metals: precious metals (gold and silver) and industrial metals (copper)
Agricultural: Wheat, corn and soybeans
Livestock: Pork bellies and feeder cattle
Energy: Crude oil, petroleum products and natural gas

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