8 BROAD FINANCIAL

SECTORS IN INDIA:

 SHARE MARKET
 MUTUAL FUNDS
 INSURANCE
 PROVIDENT FUND
 REAL ESTATE
 BANKING AND FIXED DEPOSITS
 POST OFFICE
 GOLD
STOCK / SHARE MARKET

 A stock market or equity market is a

market for the training of company
stock(shares)and derivatives at an
agreed price.
 The size of the word stock market
was estimated at about $6.6trillion
USD at the beginning of October
2008.
Stock Investing Pros and Cons
PROS:-
 Growth with economy
 Stay ahead of inflation
 East to buy
 Liquidity
 Need less money to start investing

CONS:-
 Risk
 Stockholders of broke companies
 Takes time to research
 Taxes on profitable stock sales
 Emotional ups an downs
MUTUAL FUNDS
Mutual funds is a common pool of
money into which investors place their
contributions that are to be invested
in different types of securities in
accordance with the stated objectives.
Mutual Fund shareholder or a unit
holder is a part owner of the fund’s
asset.
PROS AND CONS OF MUTUAL
FUNDS

Pros:-
Professional Portfolio Management
Diversification
Affordable
Liquidity

CONS:-
Fees and expenses
Lock-in periods
Dilution
 INSURANCE
The insurance act of 1938 was the first
legislation governing all forms of insurance to
provide strict state control over insurance
business.
Purpose:-to safe guard the interest of insured ,
setting the norms for carrying out the business
of insurance smoothly, Minimizing disputes.
PROS AND CONS OF
INSURANCE
Pros:-
 can protect your family
Secure living standard
Can cover you in serious health issues
Can prevent you from becoming bankrupt
You will be better able to plan for the future

Cons:-
Requires you to pay premium
May not worth it for minor savings
People may no longer actively prevent damage
People may overestimate their coverage
Adverse selection my lead to problems
PROVIDENT FUND
The Employees provident Funds Act
1952 is enacted to provide act a kind of
social security to the industrial
workers. The act mainly provides
retirement or old age benefits, such as
Provident Fund, Invalidation Pension,
Family Pension and Deposit Linked
Insurance
PROS AND CONS OF
PROVIDENT FUND

Pros:-
Safest Investment Avenue
Assured returns
Tax benefits

Cons:-
Accumulated Corpus may not high
Longer lock-in period
Upper limit
 REAL ESTATE
Real estateis property consisting of land
and buildings on it, along with its natural
resources such as crops , minerals or water.

Real estate is different from personal

property , which is not permanently
attached to the land , such as vehicles ,
boats , jewelry , furniture , tools , and the
rolling stock of a farm.
PROS AND CONS OF REAL
ESTATE
Pros:-
 can be purchased at below- market prices
 generates steady cash inflows
Provides a depreciation tax shield
Appreciates in value
Provides in inflationary hedge

Cons:-
Is a long grid
Its income can be variable
Requires maintenance
Is impacted by rent control
Requires your time
BANKING AND FIXED DEPOSIT
 FIXED DEPOSIT
A fixed deposit, also known as an FD, is an
investment instrument offered by banks, as
well as non-banking financial companies
(NBFC) to their customers to help them
save money. With an FD account you can
invest a sizeable amount of money at a
predetermined rate of interest for a fixed
period.
All banks offer fixed deposits at different
rates.
PROS AND CONS OF FD
Pros:-
 Assured rate of return.
 Tax threshold for interest.
 Flexible tenure.
 Easy liquidation.
 Loans against fixed deposit.

Cons:-
 Assured rate of return.
 Tax threshold for interest.
 Flexible tenure.
 Easy liquidation.
 Loans against fixed deposit.
BANKING
A bank account is probably not on your
list of hot investment ideas, but the
various options a bank offers might fit
some of your needs. Banks pay different
interest rates on different accounts, and
you typically earn more the longer you
are willing to let your money sit.
PROS AND CONS OF
BANKING
Pros:-
Bank Accounts are Insured
Certainty of Future Funds

Cons:-
 Low Returns
Account Fees
POST OFFICE
The Post Office Saving Schemes include
several reliable products and offer risk-free
returns on investment. Around 1.54 lacs
post offices spread all over the country
operate these schemes. For example, the
government operates the PPF scheme via
8200 public sector banks and the post
offices in each city.
 PROS AND CONS OF PO
Pros:
Low Minimum Amount – The minimum is only ₹1,000.
High Interest Rates.
Premature Withdrawal.

Cons:-
The maximum tenure of a post office FD is five years.
If you opt for a premature withdrawal, it may be charged a
fee.
Most services rendered are not online.
Banks offer more flexible tenures of FDs than post office.
Interest payout is only annually, whichever tenure you
choose.
GOLD
The Indian affinity to gold is well known.
Indians have always had a special connection
with precious metal. It has been used as a
means to store wealth, a hedge against
inflation, and a highly liquid asset that can be
pledged or easily liquidated.

The gold loan industry has always been

attractive due to its lower credit eligibility, high
liquidity, and because it can be easily used to
procure additional capital during exigencies.
PROS AND CONS OF GOLD
PROS:-
 Gold is a hedge against inflation.
 Liquidity.
 Diversification.
 Holds its value over a long period of time.
 Most desired commodity.

CONS:-
 Gold is not a passive investment.
 Gold is difficult to store.
 Price correction can lead to losses.