Introduction to Investment_Invetment help.pptx

Introduction to Investment

1. Investment

2. Text Books Prasanna Chandra. (2021). Investment Analysis and Portfolio Management. Tata McGraw Hill Education Private Limited. 6 th Edition Bodie, Kane, Marcus. (2024). Essentials of investment. Mcgrew -Hill. 13 th Edition REILLY, Brown & Leeds . (2018). Investment Analysis & Portfolio Management. Cengage , USA, Eleventh Edition

3. Benjamin Graham Benjamin Graham:- The Father of Value Investing Books:-The Intelligent Investor Security Analysis (Published in 1934) “Investing isn’t about beating others at their game. It’s about controlling yourself at your own game.” Benjamin Graham

4. Books related to Stock Market/SAPM The value investor – Benjamin Graham The Warren Buffet Way Rich dad Poor dad (By Roberk Kiyosaki )

5. Investment Meaning Investment: An investment is a sacrifice of current money or other resources for future benefits. Investment is usually associated with risk. Process of conversion of money or cash into securities. Investment is the allocation of monetary resources to assets that are expected to yield some gain or positive return over a given period of time. Divestment: Process of conversion of securities into cash/money Two Types of Investment decisions: Long term: Capital Budgeting Short term:

6. Investment options: Factors we need to consider ( Three pillars of investment ) Safety:- Principal amount should be safe. Liquidity:- They need more liquid investment options Return: There should be a decent return.

7. Risk Free Investment/Deposits Saving Deposit (2.7 to 3%) Fixed Deport (Tenure)-6.2% to 7.5% Recurring Deposit (7% like Post office RD) Public Provided Fund (7.5% to 8%) Investing in Treasury Bills (6%) Government bonds All interest will vary YOY or institutions

8. How to invest in stock market? Open Demat Accounts

9. How a Demat Account works SEBI Depositories (NSDL/CDSL) Depository Participants (DPs)/Stock broking institutions Demat ( Demeterialized ) Account

10. Stock Broking Institutions Above 600 DPs (Depository participants)-Broking Institutions in India Agent between investors and depositories Full service:- ICICI Direct HDFC Securities Kotak Securities Angel Broking Geogit Discount Brokers:- Upstox Zeroda Samco Prostock Fyers Groww

11. C learing house The clearinghouse enters the picture after a buyer and a seller execute a trade. Its role is to accomplish the steps, like the proper transfer of ownership of shares and validate the transaction and finalize the process. It acts as a middleman, the clearinghouse provides the security and efficiency that is integral to stability in a financial market. To mitigate default risk in futures trading, clearinghouses impose margin requirements .

12. List of Clearing Corporations Sr. No. Name Address Valid Upto 1 Indian Clearing Corporation Ltd. Address: BSE Limited, P J Towers, Dalal Street, Mumbai -400001 Website :   https://www.icclindia.com/  Oct 02, 2026 2 Multi Commodity Exchange Clearing Corporation Ltd. Address: Exchange Square, Suren Road, Chakala, Andheri (E), Mumbai-400093 Website :   https://www.mcxccl.com/  Jul 30, 2028 3 National Commodity Clearing Ltd. Address: Akruti Corporate Park, 1st Floor, Near G.E. Garden, L.B.S. Road, Kanjurmarg (West), Mumbai-400078. Website :   https://nccl.co.in/  Sep 09, 2025 4 NSE Clearing Limited. Address: Exchange Plaza, C-1, Block G,Bandra Kurla Complex, Bandra (E),Mumbai - 400 051 Website :   http://www.nscclindia.com/  Oct 02, 2026 5 AMC Repo Clearing Limited. Address: AMC Repo Clearing Limited Unit No. 503, Windsor, Off CST Road, Kalina, Santacruz – East, Mumbai – 400098 Website :   www.arclindia.com  Jan 16, 2026

13. Regulatory Frameworks

14. Main legislations governing “the securities market” At present, the four main legislations governing “the securities market” are: The SEBI Act, 1992 , which empowers SEBI with statutory powers for ( i ) protecting the interests of investors in securities, (ii) promoting development of the securities market, and (iii) regulating the securities market. The Companies Act, 2013 , which provides regulations for issuance, allotment and transfer of securities, and related matters in public issues of securities; The Securities Contracts (Regulation) Act, 1956, which provides for recognition and regulation of transactions in securities in a Stock Exchange. The Depositories Act, 1996 , which provides for electronic maintenance and transfer of ownership of dematerialized (demat) shares.

15. WHY IS INVESTMENT IMPORTANT ? Wealth creation To make return in terms of profit/divided To hedge against the inflation (2.10% in June 2025). To enjoy taxation To generate the passive income. To enjoy financial freedom (through disciplined investment)-Avoid dependence on others.

16. Participants in the capital market

17. Risk-averse:- Zero or minimal risk Try to make risk free return Always seeking safe zone investment Passive investors are preferring to risk averse Eg :- Investors in government bonds Risk-neutral:- Moderate risk and expect moderate return Ex: Mutual Fund investors R isk-seekers:- Taking high risk with the expectation of high return Taking challenges, accordingly making return Ex: Intraday and Options traders Investors towards risks

18. Participants in Stock Market Investors (Position Trading-Long term) Traders (Intraday and Swing trading) Gamblers

19. Participants in Stock Market Traders/Speculators Investors Gamblers Compared to investment and speculation, the result of gambling is known more quickly. Rather than making rational buying, they are entering into market for making money quickly Gambling consists of uncertainty and high stakes for thrill and excitement. Typical examples of gambling are horse racing, game of cards, lottery etc.

20. Investment vs Speculation Investor Speculator Planning horizon An investor has a relatively longer planning horizon. His holding period is usually at least one year. A speculator has a very short planning horizon . His holding period may be a few days to a few months. Risk disposition An investor is normally not willing to assume more than moderate risk. speculator is ordinarily willing to assume high risk. Return expectation An investor usually seeks a modest rate of return which is commensurate with the limited risk assumed by him. A speculator looks for a high rate of return in exchange for the high risk borne by him. Leverage Typically an investor uses his own funds A speculator normally resorts to borrowings /margins

21. Participants in Commodity Markets Hedgers (Risk averse) Speculators Arbitragers An investor can also be an arbitrager if he buys and sells securities in more than one stock exchange to take advantage of the price differentials in such exchanges. Arbitrages : Taking the differences of NSE and BSE