INVESTMENT MANAGEMENT

Module-1

Module-1• Learning

objectives:• Meaning of Investment • Definition of Investment• Objectives of

Investment• Types of Investment• Securities Market• Primary Market(NIM)• Functions of primary

market• Right Issue

• Book building• Private placement• Organized stock

exchanges• Functions of stock

exchanges• Listing of securities• Trading & operational

mechanism of stock exchanges

• Settlement and clearing

• Dematerialization

Meaning of Investment

• Investment is putting money into something with the expectation that it will generate income or the value will appreciate in future or profit.

Definition of Investment • “Commitment of funds made in the

expectation of some positive rate of return”

• Investment is the employment of funds with the aim of achieving additional income or growth in

value.

• Expectation of return is an essential element of investment.

Meaning of Investment

• It involves the commitment of resources which have been saved or put away from current consumption in the hope some benefits will accrue in future.

• Investment involves long term commitment of funds and waiting for a reward in the future.

Meaning of Investment

Financial Meaning: Investment is the commitment of a

person’s funds to derive future income in the form of interest,divident,premiums,pension or appreciation in the value of their capital.

Meaning of Investment

Economic meaning:• Net additions to the economy’s capital

stock which consists of goods and services that are used in the production of other goods and services.

Financial Meaning of Investment

• Financial investment involves of funds in various assets, such as Stock, Bond, Real Estate, Mortgages etc.

Characteristics of Investment

• Return• Risk• Safety• Liquidity

Objectives of investment

• 1.Maximisation of return• 2.Minimisation of risk• 3.Hedge against inflation

Investment Vs Speculation

Investment Vs Speculation

Financial markets