Name of Institution
ABS
SAPM
AKHIL SWAMI
2017-18
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Name of Institution
• Descriptors/Topics: Basics of stock markets.
Investment versus Speculation, Investment
Alternatives and Their Evaluation, Financial
Markets, Portfolio Management Process,
Approaches to Investment Decision Making,
Common Errors in Investment Management,
and Qualities of Successful Investing. Role of
Portfolio Management, Portfolio Management
Practices in International markets.
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BASICS OF STOCK MARKET Name of Institution
• Definition: It is a place where shares of
pubic listed companies are traded. The
primary market is where companies float
shares to the general public in an initial
public offering (IPO) to raise capital.
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Name of Institution
• Description: Once new securities have
been sold in the primary market, they are
traded in the secondary market—where
one investor buys shares from another
investor at the prevailing market price or at
whatever price both the buyer and seller
agree upon.
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Name of Institution
• The secondary market or the stock
exchanges are regulated by the regulatory
authority. In India, the secondary and
primary markets are governed by the
Security and Exchange Board of India
(SEBI).
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Name of Institution
• A stock exchange facilitates stock brokers
to trade company stocks and other
securities. A stock may be bought or sold
only if it is listed on an exchange. Thus, it
is the meeting place of the stock buyers
and sellers. India's premier stock
exchanges are the Bombay Stock
Exchange and the National Stock
Exchange.
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Name of Institution
• When on cannot build up a company ,
then one can invest in primary market or
secondary market to make money.
• Venture capitals/angel financers/PE funds
also make money in the same way.
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Investor vs speculator Name of Institution
• Investment is long term in nature, A
investor commits funds for a longer period
in the expectation of holding period gains.
Speculator trades frequently , hence the
holding period of security is very short.
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Name of Institution
• Speculation is a calculated move with an
expectation to get huge profits from the
market. Gambling is betting and reckless
trading. Hedging is risk reduction
technique. They use derivative
instruments to reduce risk.
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Properties of financial assets
Name of Institution
• Monetary value
• Divisibility
• Convertibility
• Reversibility
• Liquidity
• Cash flow
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Equity market Name of Institution
• Equity instruments bestow ownership on the
holder of the security.so, equity implies
ownership rights in the corporate entity that
has issued the instrument to the public. Equity
is also referred as the stock or capital stock.
owner of equity will not have a fixed claim in
the distribution of profits like fixed interest as in
the case of debt instrument. The dividend will
be decided by AGM and will be given to equity
investors
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Name of Institution
• IPO
• FPO
• Right offer. Debt offering
• Anchor investor
• Private placement
• QIB
• QIP
• FCCB, ADR/GDR/
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ERRORS IN INVESTMENT Name of Institution
• 1. No Plan---As the old saying goes, if you
don't know where you're going, any road
will take you there.
• A. goals and objectives. B. risks . C.
appropriate benchmarks, D.asset
allocation. E. diversification
• 2. Too Short of a Time Horizon
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Name of Institution
• 3. Too Much Attention Given to Financial
Media
• 4. Not Rebalancing
• 5. Overconfidence in the Ability of
Managers
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Name of Institution
• 6. Not Enough Indexing—actively
managed funds and passive managed
funds.
• 7. Chasing Performance(trade cycle)
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Characteristics of Highly Name of Institution
Successful Investors
• 1. Highly successful investors are proactive
learners
• 2. They always invest with a planned exit
strategy
• 3. They are patient
• 4. Highly successful investors have strong
emotional control
• 5. They have a well defined investing strategy("A
winning strategy must include losing.“)
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Name of Institution
• 6. They are focused
• 7. Successful investors use trend to their
advantage
• 8. They are persistent
• 9. They thrive on risk
• 10. Successful investors are disciplined
• 11. They know how to use leverage to
their advantage
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Name of Institution
• 12. They learn quickly from their mistakes
• 13. They have a team of professional
advisors
• 14. They have a strong financial
background
• 15. Successful investors are passionate
about the game of investing
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Portfolio management Name of Institution
• Portfolio management is the art and
science of making decisions about
investment mix and policy, matching
investments to objectives, asset allocation
for individuals and institutions, and
balancing risk against performance.
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Name of Institution
• Simply put, portfolio strategy is a roadmap
by which investors can use their assets to
achieve their financial goals. Portfolio
theory refers to the design of optimal
portfolios and its implication for asset
pricing.
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International portfolio Name of Institution
• A grouping of investment assets that
focuses on securities from foreign markets
rather than domestic ones. An
international portfolio is designed to give
the investor exposure to growth in
emerging and international markets and
provide diversification.
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Name of Institution
• International portfolios allow investors to
further diversify their assets by moving
away from a domestic-only portfolio. This
type of portfolio can carry increased risk
due to potential economic instability
stemming from emerging markets, but can
also bring increased stability through
investments in industrialized and more
stable markets.
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Name of Institution
• Due to the integration of global financial
markets, many companies already have
operations in more than one country.
• Trade cycles and factors responsible for
movements in international market
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