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K A K U L M A S O O D Z A I D I

( A S S O C I A T E M A N A G E R S A L E S )

D E L H I G O 7

FINANCIAL MARKET


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AGENDA

y What is investment ?

y Why invest ?

y Where invest ?

y An Introduction to Financial Market

y Types of Financial Market

y Conclusion


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What is Investment ?

Money we earn is partly spent and rest saved for meeting futureexpenses. Instead of keeping the savings idle we like to use savings inorder to get return on it in the future. This is called Investment.


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Why Invest ?

y Earn Return on idle resources

y Generate sum of money for specified goal in life

y Make provision for uncertain future

y To meet the cost of inflation


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An Introduction to Financial Market

In economics, a financial market is a mechanism thatallows people to easily buy & sell (trade) financial

securities ( such as stocks & bonds ), commodities (such as precious metals or agricultural goods ).


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Types of Financial Market

Financial Market

Capitalmarket

MoneyMarket

CommodityMarket

DerivativesMarket

InsuranceMarket

ForeignExchange

Market


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Options for Retail Investor

y Equity

y Debt

y Mutual Funds

y Fixed Deposits with Banks

y Post office schemes

y Gold

y Real Estatey Insurance


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Equity Shares

It commonly referred to as ordinary share

represents the form of fractional ownership in abusiness venture.

Equity shareholders have the right to getdividends as declared.


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DEBT

This instrument represents contract whereby one

party lend money to another on pre-determinedterms with regards to rate and periodicity of

interest, repayment of principle amount by theborrower to the lender.


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Classification of DEBT

y BONDS: Issued by Govt.(Central and State),PublicSector Organisation

y DEBENTURES: Issued by Private Corporate Sector.


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Mutual Fund

y A Mutual fund is a collective investment vehicle thatpools together investor money. This collective pool of

money is invested in accordance to stated objective.

y Mutual Funds are :

A large pool of resources

Managed by professionals

Diversified investment for lower risk & better return


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Fixed Deposits with Banks

y It allows an investor to deposit a lump sum of money for a

fixed period ranging from a few weeks to a few year and

earn a pre-determined rate of interest.y Guaranteed Returns depends upon term.

y Safe and Secured Investments


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Post Office Schemes

y Offered by Govt. of India

y Safe, secure and risk-free Investment

y No Tax deduction at source (TDS)

y Transferable to any post office in India

y Attractive Rate of Interest

y Post office monthly income scheme

y Kisan Vikas Patray National Savings certificate

y Public Provident Fund


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GOLD

y Physical Gold in the form of bars and coins

y Gold accounts in banks where units in the gold a/c inthe banks are backed up by physical gold held in thebank and bank gives assurance that the investor canconvert the gold back to cash anytime.


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Real Estate Investment

y Financial instrument that invests primarily in thereal estate such as offices, apartments, shoppingcentres, hotels etc.

y Tend to pay high returns( often as high as 10%)

y Attractive investment opportunity when the stockmarket is falling.


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Insurance

y A promise of compensation for specific potentialfuture losses in exchange for a periodic payment.Now it is considered as a investment tool also:

yULIPs

yTraditional Plans


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Conclusion

Investors looks at superior returns and measured

risk therefore he has to select a dynamicallybalanced asset allocation mix consisting of the

different investment options available in the

Financial Market.


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THANK YOU


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y There are a large number of investment instruments available today. Tomake our lives easier we would classify or group them under 4 main types ofinvestment avenues. We shall name and briefly describe them.

y 1. Financial securities: These investment instruments are freely tradable and negotiable.These would include equity shares, preference shares, convertible debentures, non-convertible debentures, public sector bonds, savings certificates, gilt-edged securities andmoney market securities.

y 2. Non-securitized financial securities: These investment instruments are not tradable,transferable nor negotiable. And would include bank deposits, post office deposits,company fixed deposits, provident fund schemes, national savings schemes and lifeinsurance.

y 3. Mutual fund schemes: If an investor does not directly want to invest in the markets,

he/she could buy units/shares in a mutual fund scheme. These schemes are mainlygrowth (or equity) oriented, income (or debt) oriented or balanced (i.e. both growth anddebt) schemes.

y 4. Real assets: Real assets are physical investments, which would include real estate, gold& silver, precious stones, rare coins & stamps and art objects.


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