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Investment Management

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Investment Management

i) The term investment refers to funds invested in various securities — consisting of Government and semi Govt. securities, loans, debentures, shares and bonds etc.

❖ Elements of Investment :-

a) Reward (Return)

b) Risk and Return

c) Time

❖ Nature of Investment :-

Investment requires a continuous flow of decisions which can not be avoided. The investment decisions are based on many streams of data which taken together, represent to an investor the observable environment and the general and particular of the securities & enterprises in which he may invest.

❖ Investment Environment :-

a) Stable Government

b) Stable Currency

c) Presence of Public financial Institutions

d) Development of corporate sector.

[pic]

❖ Different types of Port-folios for Investment :-

Investment — Concept of Port-folio :-

Portfolio is the collection of financial or real assets such as equity shares or debentures, bonds, treasury bills & property etc.

Steps in selecting a portfolio

a) framing of investment policies.

b) Valuation of Financial Instruments

c) Investment Analysis

d) Construction of Portfolio

Port-folio management is the investment of funds in different securities in which total risk of the port-folio is minimized while expecting maximum return form it.

❖ Port-folio construction :-

i) Determination of Diversification level.

ii) Consideration of Investment timings.

iii) Selection of Investment assets

iv) Allocation of funds to assets

v) Evaluation of Port-folio for feedback.

Before selecting a port-folio the required norm should be considered regarding Risk & Return aspect.

Risk may be caused by the factors :-

i) Wrong decision of Investment

ii) Kind of Investment

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