Investment_Management_Notes_Presentation.pptx

Introduction-Investment – Meaning and Process of Investment Management – Speculation – Gambling,-Difference between Speculation, Gambling and Investment – Type of Investors – Factors-influencing the investment choice - Investment Avenues in India.

1. INVESTMENT MANAGEMENT

2. UNIT I Introduction-Investment – Meaning and Process of Investment Management – Speculation – Gambling,-Difference between Speculation, Gambling and Investment – Type of Investors – Factors-influencing the investment choice - Investment Avenues in India.

3. UNIT II Risk and Return Risk: Definition - Systematic versus Non-systematic Risk - Measurement of Risk - Risk and Expected Return - Risk-Return Relationship of different stock - Portfolio and Security Returns -Return and Risk of Portfolio.

4. UNIT III Security Valuation Bond: Introduction – Reasons for issuing Bonds – Bond Features – Types of Bonds –Determinants of bond safety -Bonds Prices, Measuring Price Volatility of Bonds – Preference -Shares : Introduction – Features of Preference shares – Preference Shares Yield – Holding PeriodReturn – Yield to Call - Concept of Present Value - Equity Share Valuation Model.

5. UNIT IV Fundamental and Technical Analysis Fundamental Analysis: Objectives - Economic Analysis – Industry Analysis – Company Analysis– Technical Analysis: Meaning of Technical Analysis – Assumptions – Pros and Cons of Technical Analysis – Difference between Technical Analysis and Fundamental Analysis – Dow Theory & Random Walk Theory - Types of Charts – Chart Patterns - Trend Analysis – Support Line and Resistance Line - Volume Analysis - Indicators and Oscillators – Simple Moving Average – Exponential Moving Average

6. UNIT V Portfolio Management Portfolio Diversification – Portfolio Selection, Performance Evaluation and Portfolio Revision – Formula Plans – Methods of calculating Portfolio return - Sharpe’s Ratio - Treynor’s Ratio - Jensen’s Differential Returns – Capital Asset Pricing Model (CAPM).

7. UNIT I – Introduction Investment: Allocation of money in assets with the aim of earning returns. Investment Management: Process of planning, organizing, and managing assets for returns. Speculation: High-risk financial activity aimed at quick profit. Gambling: Risking money on chance with no underlying asset .

8. Difference: Investment is long-term; speculation involves risk; gambling is chance-based. Types of Investors: Risk-averse, risk-neutral, and risk-seeking. Factors Influencing Investment: Risk tolerance, return, liquidity, horizon. Investment Avenues in India: Stocks, bonds, mutual funds, PPF, real estate, gold.

9. UNIT II – Risk and Return Risk: Possibility of loss or variability in investment returns. Systematic Risk: Market-wide risk not diversifiable. Non-systematic Risk: Company-specific risk that can be diversified. Measurement of Risk: Standard deviation, beta .

10. Risk and Expected Return: Higher risk demands higher expected return. Stock Risk-Return: Varies with volatility and performance. Portfolio and Security Returns: Weighted average of individual returns. Portfolio Risk and Return: Combines expected return and risk of assets.

11. UNIT III – Security Valuation Bond: Debt instrument for raising funds. Bond Issuance: For operations, projects, debt repayment. Bond Features: Face value, coupon, maturity, yield. Types of Bonds: Government, corporate, zero-coupon, etc. Bond Safety: Credit rating, issuer, economy .

12. Bond Prices/Volatility: Affected by interest rates, risk. Preference Shares: Fixed dividend hybrid securities. Preference Share Yield: Income as a percentage. Holding Period Return: Total return over holding period. Yield to Call: Return until callable bond's call date. Present Value: Today’s value of future cash flows. Equity Valuation: DDM, P/E ratio, etc.

13. UNIT IV – Fundamental and Technical Analysis Fundamental Analysis: Evaluates intrinsic value using data. Objectives: Identify over/undervalued stocks. Economic Analysis: Studies macroeconomic factors. Industry Analysis: Examines sector performance. Company Analysis: Focus on financial health .

14. Technical Analysis: Uses charts and past data. Assumptions: Market discounts all, trends exist. Pros/Cons: Quick insights vs. ignores fundamentals. Fundamental vs. Technical: Data vs. charts. Dow/Random Walk Theories: Trend vs. unpredictability. Chart Types: Line, bar, candlestick. Patterns: Indicate future movements.

15. Trend Analysis: Direction of market movement. Support/Resistance: Key price levels. Volume Analysis: Confirms trends. Indicators/Oscillators: RSI, MACD, etc. SMA: Average of prices over time. EMA: Weighted average favoring recent data.

16. UNIT V – Portfolio Management Diversification: Spreading assets to reduce risk. Selection: Choosing assets for return and risk. Performance Evaluation: Using risk-return metrics. Revision: Adjusting based on market or goals. Formula Plans: Constant ratio, dollar-cost averaging .

17. Portfolio Return: Total return from holdings. Sharpe’s Ratio: Risk-adjusted return (standard deviation). Treynor’s Ratio: Return per unit of market risk (beta). Jensen’s Alpha: Return above CAPM expectation. CAPM: Return based on risk (beta).