INVESTMENT ANALYSIS

&
PORTFOLIO MANAGEMENT

Lecture # 1
Dr. Shahid A. Zia
 The Course
• INVESTMENT
• ANALYSIS
• PORTFOLIO
• MANAGEMENT

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 Text book

• PRACTICAL INVESTMENT MANAGEMENT, 3rd

Edition, (Southwestern/Thomson)
• Robert A. Strong
• ISBN 0-324-17164-1
• INVESTMENT ANALYSIS and MANAGEMENT,
9th EDITION, (by Charles P. Jones)

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Investment Alternatives

Assets are things that people own.

Assets

Financial Assets Real Assets

e.g. bond, stock e.g. land

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 Investment Alternatives
There are three broad categories of securities.

Securities

Equity Fixed Income Derivative

Securities Securities Assets
e.g. common e.g. bonds, e.g. futures,
stock preferred stock options

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 Three Reasons for Investing
Why invest ???
People invest to …
• supplement their income
– Dividends and Interest.
• earn capital gains
– Appreciation refers to an increase in the value
of an investment.
• experience the excitement of the
investment process. 6
 Investing
To consume, to save, or to invest
a rupee that is earned ?

Both saving and investing amount to

consumption shifting through time.

However, saving involves little, if any,

risk, while investing is a risky
endeavor.

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 Fundamental Analysis
Fundamental Analysis include the evaluation of
the;
• Balance Sheet
• Annual Report
• Profit & Loss Figures
• Profitability Ratios
• Liquidity Ratios
• Operational Ratios

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 Technical Analysis
Focus on the movement of the share prices
going up or going down.

Scenario Analysis

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 Investments

Investment means to invest something in

some where.

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 Uses of Investments
Three uses of investments;
1. Consumption
2. Savings
3. Investing

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 Investing
You consume less than you save and then
from saving you can always think about
investment.

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 Savings
It is very important to see that how you
save the money.
• You save money in your home at secure
place.
• Committees.

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 Channels of Savings

• Banking
• Non-financial institutions
• National saving schemes

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 Portfolio Management

How to manage different sectoral things.

“Don’t Keep all your eggs in one basket”

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 Investment Analysis and Portfolio
Management

Mutual fund are also used in the portfolio.

• Collection of eggs.
• Collection of different shares, cash and
foreign exchange.

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 Bonds
• Term Finance Certificates
• Bearer bonds
• Fixed Income bonds
• Euro bonds

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