Merits & demerits of types of investment

The above presentation tells you about the various forms of investment and their advantages and disadvantages

1. Merits & Demerits of Types of Financial Investments Deepak D wivedi BBA E1 (Vth)

2. Various financial sectors Real Estate. Shares. Gold. Post Offices. Banking . Mutual Funds. Government Bonds. PPFs , EPFs & PFs. Insurance.

3. Merits 1. O pportunity to earn rental income. 2. Higher control on the assets. 3. Rental rates rise whenever a lease expires. 4. Great diversification. Demerits 1. Unattractive locations may not be taken into consideration. 2. Change in the government could hinder the rates of property. 3. Additional expenses. 4. Sudden government plans can cause huge losses in the investment . Real Estate

4. Merits 1. Easy liquidity. 2. Flexibility. 3. Versatility. 4. Maximum return. 5. Time Value of money. 6. L imited liability . Demerits 1. Knowledge about the market is a must. 2. Might not give the desired result. 3. De-mat account required 4 . Have to seek external help for investment. 5 . No life cover. Shares

5. Merits 1. High Liquidity. 2. One of the most desired community. 3. Holds its value for long time. 4. Diversification. 5. Start with a small amount. Demerits 1. Extra bank charges are to be given for deposits. 2. Difficult to store. 3. Losses begin from the time of purchase. 4. Less R esale value. 5. Subject to Confiscation. 6. P artial liquidity. 7. May subject to a crime in the outside world. Gold

6. Merits 1. Withdrawal before completion. 2. Safe and Secure mode of savings. 3. The A/C can be transferred from one post office. 4. Electronic deposits. Demerits 1. Rate of interest. 2. No Computerization. 3. No R oaming facility. 4. Reliability on the agent. 5 . Allocation issues. Post Office

7. Merits 1. Guaranteed returns. 2. Easily withdrawal. 3. Flexible in nature. 4. Encourages saving habits. 5. Higher rate of returns. Demerits 1. No flexibility to access your funds. 2 . Relatively low investment returns. 3 . Time consuming. 4 . Additional charges may occur at the time of breaking of FD. Banking

8. M erits 1. Reduces investment risk. 2. D iversification at low cost. 3. Professionally managed. 4. Ease of liquidity. 5.Time value of money. Demerits 1.High expense ratios and sales charges. 2.Misleading during investment. 3.No insurance against losses. 4.Trading limitations. Mutual funds

9. Merits 1. T ax free. 2. L ess risk. 3. G ood long term returns. 4. E arly redemption is easy 5. D iversifies Portfolio Demerits 1.Vulnerable at the time of fiscal crisis. 2.Low rate of investment (depends on inflation/deflation). 3.Burden on the government. 4. Limit to investment. Bonds

10. Merits 1. G enerates guaranteed returns. 2. T he maturity proceeds are exempt from taxes. 3. Safety of capital. 4. C an be opened in the name of minor along with a guardian. Demerits 1. Lack of liquidity. 2. Cannot be opened by HUF, NRI, trust etc. 3. Joint account is not permissible. 4. Big lock in period of 15 years. 5. Account cannot be closed prematurely. PPF , PF , EPF

11. Merits 1. C omes under 80©. 2. G uaranteed income. 3. T ax benefits. 4. M ortgage recovery. 5. R isk guard. 6. H igh Liquidity. Demerits 1. Lack of awareness. 2. Inconsistent premiums. 3. Trust worthiness. 4. Lengthy legal formalities. Insurance

12. Conclusion and Treatment

13. Thank you.