Financial Sectors

Made by – Aryan Batra

(SCMS NOIDA)
Prn-20021021337
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Types Of Financial Sectors

1) Stock Market
2) Mutual Funds
3) Real Estate
4) Banks(FD)
5) Gold
6) Insurance
7) Post Office
8) PPF
9) Govt. Bonds
1) Stock Market

• The stock market consists of exchanges in which stock shares and

other financial securities of publicly held companies are bought and
sold.
• Two major types – NSE , BSE
BSE- Top 30 companies , Nifty50 – Top 50 companies
• Demat A/c is required for trade.
Merits

 Regulated By Securities Exchange Board Of India(SEBI)

 Passive Income
 High Profits
 Secure
 Easy to buy and sell
 Contribution to Economic Growth
Demerits

 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

2) Mutual Funds

A mutual fund is a financial vehicle that pools assets from shareholders to invest
in securities like stocks, bonds, money market instruments, and other assets.

M utual funds give small or individual investors access to professionally

managed portfolios of equities, bonds, and other securities.
Merits

 Convenience
 Built-in diversification
 Professional management
 Profit reinvestment
Demerits

 Management Fees.
 Locked in Clause.
 Wasted Cash
 Charges
 Misuse of money
3)Real Estate

 Real estate has become a popular investment vehicle over the last 50 years or so.

 Real estate is considered to be its own asset class and one that should be at least a part
of a well-diversified portfolio.
 One of the key ways investors can make money in real estate is to become a
landlord of a rental property.
Merits

 The Value of Real Estate Increases Over Time

 Real estate has its own set of tax advantages.
 Real estate generates consistent cash flow
 Real estate allows you to leverage your money
 Real estate is a great way to build wealth
 Real estate provides you with a sense of control
Demerits

 Investing in real estate necessitates financial resources.

 Buying and selling real estate takes a long time
 Real estate is an investment that pays off in the long run
 Real Estate Can Be Difficult
 Real Estate Advantages Aren't Always Valid
4)Banks(FD)

A fixed deposit or an FD is an investment instrument that banks and non- banking

financial companies (NBFC) offer their customers. Through an FD, people invest a
certain sum of money for a fixed period at a predetermined rate of interest in an
FD.

An FD is a relatively safe investment option. Market fluctuations do not impact

the interest rate that you get on an FD.
Merits

 Safe investment
 Fixed tenure
 Loan against FD
5)Gold

 Gold as an asset class has always worked as a

hedge against inflation and geopolitically turbulent
times.

 Along with investment in equities, it is prudent to have

some allocation to gold as it is inversely correlated with
equities.
Merits

 Gold has a long-term Store of Value

 High in demand

 Ease of access is one of the major advantages of gold

investment

 High Liquidity

 Inflation Hedge
Demerits

 High Cost
 Storage Issue
6)Insurance

Insurance Investments means any investment offered by an insurance company or

life office, whether the same involves a deposit, a loan, payment of premiums,
acquisition of a right or interest in or arising out of insurance or life policies, or in a
statutory fund or any similar investment.
Insurance-cum-investment products offer both – life cover and return on

investment. While the benefit of life cover is only available after the demise or

disability of the insured, the investment returns can be realized during the course

of the policy.
Merits

 Dividends enable growth

 Income guaranteed through annuities: Risk guard
 M ortgage recovery
Demerits

 Inconsistent premiums
 Deduction of funds
 Expiration of term insurance
 Insufficient funds
7)Post Office

Indian Post offers diverse investment options to cater to the varying needs of
different investors.

All Post office savings schemes guarantee returns as they are backed up by the
government of India.
Moreover, most of the post office investment schemes are tax- exempt under
Section 80C, i.e. tax exemption up to Rs. 1,50,000 is allowed.
Merits

 Simple Investment Process

Easily Accessible
 Long-Term Benefits
 Risk Free and Competent
Interest Rates
Demerits

 The m a x i m u m tenure of a post office FD is five years, and you cannot

opt for a longer tenure.
 If you opt for a premature withdrawal, you m ay be charged a fee. Mo st
services rendered are not online, and this m ay be a disadvantage to many.
 Post Office Savings Schemes are linked to Place of Investment