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Introduction to Investment
Environment
▪ Focus is on Investment Portfolio
Management
▪ Portfolio management involves investment
decision on various securities that will meet
the long-term financial goals and risk
tolerance of an investor based on certain
strategy.
▪ Current commitment of resources in expectation of
getting benefit in the future.
▪ What is benefit at this point? Its about monetary
benefit.
▪ Resources such as: knowledge, labour, _______,
_______
▪ Discussion mainly on Shares (stock)
Process of taking a
comprehensive look at your
financial situation and building
a specific financial plan to
reach goals.
Delves into multiple areas of
finance, including investing,
taxes, savings, retirement,
estate, insurance and more.

Regulated by securities
commission & central bank
Process of making it clearly known how you want
your estate to be handled after you pass or if you’re
incapacitated and unable to handle things on your
own.
▪ Plan that establishes who will eventually
receive your assets.
▪ Makes known how you want your affairs to be
handled in the event you are unable to handle
them.
▪ Handing over can complicated process.
▪ Tax advantages
▪ An individual
▪ A government
▪ A pension fund
▪ A corporation (our focus)
▪ Determine the productive capacity and net
income of the economy
▪ Physical characteristic that determine the value
of the assets
▪ Examples: Land, buildings, machines,
knowledge used to produce goods and services
▪ Financial assets are no more than sheets of paper
or, more likely, computer entries, and they do not
contribute directly to the productive capacity of the
economy.
▪ These assets the means by which individuals hold
their claim on real assets.
▪ Financial assets are claims to the income
generated by real assets (or claims on income from
the government).
▪ Example if people cannot own auto plants (a real
asset), they can invest - buy shares in Ford or
Toyota (financial assets) and thereby share in the
income derived from the production of
automobiles.
 Three types:
1. Fixed income or debt
2. Common stock or equity
3. Derivative securities
▪ Payments fixed or determined by a formula

▪ Money market debt: short term, highly

marketable, usually low credit risk. Mostly
offered by governments, almost 0 risk

▪ Capital market debt: long term bonds, can

be safe or risky. Issued by government or
corporate
Common Stock
Common stock is equity or ownership in a corporation.
Benefits for investors: Investors own stocks for three
reasons. (for capital gains, for income, to have a voice in
the management of the company).

Preferred Stock
This class of stock is a hybrid of common stock and
bonds. Preferred shares usually pay a higher dividend
than common stock, their dividends must be paid before
common stock dividends, and they rank higher than
common stock in a bankruptcy. Preferred shares do have
capital gains potential but do not carry voting rights.

Pros
• Grow with economy
• Stay ahead of inflation
• Easy to buy
• Don't need a lot of money
to start investing
• Income from price
appreciation and dividends
• Liquidity
• Potential dividend &
capital gain
Cons
• Risk
• Stockholders of broke
companies get paid last
• Takes time to research
• Taxes on profitable stock
sales
• Emotional ups and downs
• Competing with
institutional and
professional investors
4-14
▪ Value derives from prices of other
securities, such as stocks and bonds
▪ Used to transfer risk
▪ Example : Commodity, futures, options
▪ https://portal.bloombergforeducation.com/si
gn_up
▪ Or just search Bloomberg for Education
▪ Learner
▪ Students email address
▪ Institution: Taylor’s University
▪ First & Last Name (Certificate Purpose), so use
your full name
▪ and click sign up
 BMC CERTIFICATE
▪ Its compulsory for every student to complete the course
and attach the certificates of members at end of group
assignment.
▪ 5 modules to complete in the course.
▪ Not tested in your Final Exam.
▪ However, there is a penalty as per group assignment .
Check group assignment question (MyTimes).
▪ Use this code to enroll into the class:
▪ X3MBR2QDLS
SAMPLE
 QUESTIONS TO ANSWER

▪ Do your knowledge check in between

▪ Do your section quiz
▪ Once completed all 5 modules, you able to obtain the
certificate.
▪ No pass or fail
Research on Financial Planning
https://dl.acm.org/doi/pdf/10.1145/3473714.3473839?casa_toke
n=yQatqwjR6mUAAAAA:WDHnwtfWRWRPsxYJ58FIzdUuaGrovk3
jl-nLKx2FKdJSWkQNLmQ8RNMTfCSXJABNMYtGwVHc03l
2-23