FINANCIAL SECTORS

• The financial sector is a section of the economy made

up of firms and institutions that provide financial
services to commercial and retail customers.
• A strong financial sector is a sign of a healthy economy.
• The financial sector generates a good portion of its
revenue from loans and mortgages and thrives in a low-
interest-rate environment.
• The sector is comprised of many different industries
including banks, investment companies, insurance
companies, and real estate firms.
 SHARE MARKET
• The stock market broadly refers to a number of exchanges and other venues in which
shares of publicly held companies are bought and sold. Such financial activities are
conducted through institutionalized formal exchanges (physical or electronic) and via
over-the-counter (OTC) marketplaces that operate under a defined set of regulations.
• The stock exchange shoulders the responsibility of ensuring price transparency,
liquidity, price discovery, and fair dealings in such trading activities.
MERITS
• Probability of high returns over
the short-term
• Ownership stake in the company.
• High liquidity 
• Tax benefits

DEMERITS
• Volatility
• Risk
• Stockholders are paid last
• Lack of knowledge
• Time Consuming
 MUTUAL FUNDS

A Mutual fund is a company that pools money

from many investors and invests the money in
securities such as stocks, bonds, and short-term
debt. The combined holdings of the mutual
fund are known as its portfolio. Investors buy
shares in mutual funds. Each share represents
an investor’s part ownership in the fund and
the income it generates.
MERITS
• Advanced Portfolio
Management
• Dividend Investment
• Risk Reduction
• Convenience & Fair
Pricing
DEMERITS
• High Expense Ratios
and Sales Charges
• Management Abuses
• Tax Inefficiency
• Poor Trade Execution
 GOLD
Investors generally buy gold as a way of diversifying risk, especially through the use of
futures contracts and derivatives. The gold market is subject to speculation and volatility as
are other markets. Compared to other precious metals used for investment, gold has been the
most effective safe haven across a number of countries.
MERITS
• Loan Facility
• Inflation Cover
• Status Symbol
• Protection Against Uncertainity

DEMERITS
• Storage Issues
• Low Return
• No Tax Benefit
• Low Liquidity
• Making Charges
 PROVIDENT FUND
•A provident fund is a compulsory, government-managed
retirement savings scheme used in Singapore, India, and
other developing countries.
•Both the employee and employer contribute to a fund that
aims to provide financial support to the employee when
they reach retirement.
•A provident fund is managed by the government, with set
minimum and maximum contribution levels.
MERITS
• Fixed & Assurance Return
• Safety & Security
• Tax Benefit
• Minor Can Invest
• Protection Against Solvency

DEMERITS
• Low Liquidity
• Locking Period
• Moderate Returns
 REAL ESTATE

Real estate can include property, land, buildings, air rights above
the land, and underground rights below the land. The term refers
to real, or physical, property. As a business term, real estate also
refers to producing, buying, and selling property.
MERITS
• Secondary Income
• Loan Facility
• Inflation Cover

DEMERITS
• Huge Capital
• Low Return
• No Tax Benefit
• Low Liquidity
• Locking Period
• Interventions of Government Policy
 POST OFFICE
In postal banking, your local post office offers some basic financial services,
much like a commercial bank. Postal banking is common in much of the world
and was once available in the United States. Now some advocates believe
bringing it back could be a low-cost solution for the country’s large unbanked
population.
 INSURANCE

The insurance sector is made up of companies that offer risk management in

the form of insurance contracts. The basic concept of insurance is that one
party, the insurer, will guarantee payment for an uncertain future event.
Meanwhile, another party, the insured or the policyholder, pays a smaller
premium to the insurer in exchange for that protection on that uncertain future
occurrence.
MERITS
• Financial Protection
• Distribution of Risk/Spreading of
Risk
• Stability of Living Standard
• Job Opportunities

DEMERITS
• Long Legal formalities
• Temporary and Termination
• Can be Expensive
• Rise in Subsequent Premium