INVESTMENT ANALYSIS & PORTFOLIO MANAGEMENT

Lecture # 1 Dr. Shahid A. Zia

The Course • INVESTMENT • ANALYSIS • PORTFOLIO • MANAGEMENT 2

Text book • PRACTICAL INVESTMENT MANAGEMENT, 3 rd Edition, (Southwestern/Thomson) • Robert A. Strong • ISBN 0-324-17164-1 • INVESTMENT ANALYSIS and MANAGEMENT, 9th EDITION, (by Charles P. Jones) 3

Investment Alternatives

Assets

are things that people own.

Assets Financial Assets e.g. bond, stock Real Assets e.g. land

4

Investment Alternatives

There are three broad categories of securities. Securities

Equity Securities

e.g. common stock

Fixed Income Securities

e.g. bonds, preferred stock

Derivative Assets

e.g. futures, options

5

Three Reasons for Investing

Why invest ???

• • • People invest to …

supplement their income

– Dividends and Interest.

earn capital gains

– Appreciation refers to an increase in the value of an investment.

experience the excitement

investment process.

of the 6

Investing

To

consume

, to

save

, or to

invest

a rupee that is earned ?

Both saving and investing amount to consumption shifting through

time

.

However, saving involves little, if any,

risk

, while investing is a risky endeavor.

7

Fundamental Analysis Fundamental Analysis include the evaluation of the; • Balance Sheet • Annual Report • Profit & Loss Figures • Profitability Ratios • Liquidity Ratios • Operational Ratios 8

Technical Analysis Focus on the movement of the share prices going up or going down.

Scenario Analysis 9

Investments Investment means to invest something in some where.

10

Uses of Investments Three uses of investments; 1. Consumption 2. Savings 3. Investing 11

Investing You consume less than you save and then from saving you can always think about investment. 12

Savings It is very important to see that how you save the money.

• You save money in your home at secure place.

• Committees.

13

Channels of Savings • Banking • Non-financial institutions • National saving schemes 14

Portfolio Management How to manage different sectoral things.

“Don’t Keep all your eggs in one basket” 15

Investment Analysis and Portfolio Management Mutual fund are also used in the portfolio.

• Collection of eggs.

• Collection of different shares, cash and foreign exchange.

16

Bonds • Term Finance Certificates • Bearer bonds • Fixed Income bonds • Euro bonds 17