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INVESTMENT ANALYSIS
&
PORTFOLIO MANAGEMENT
Lecture # 1
Dr. Shahid A. Zia
The Course
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INVESTMENT
ANALYSIS
PORTFOLIO
MANAGEMENT
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Text book
• PRACTICAL INVESTMENT MANAGEMENT, 3rd
Edition, (Southwestern/Thomson)
• Robert A. Strong
• ISBN 0-324-17164-1
• INVESTMENT ANALYSIS and MANAGEMENT,
9th EDITION, (by Charles P. Jones)
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Investment Alternatives
Assets are things that people own.
Assets
Financial Assets
e.g. bond, stock
Real Assets
e.g. land
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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
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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 of the
investment process.
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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.
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Fundamental Analysis
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Fundamental Analysis include the evaluation of
the;
Balance Sheet
Annual Report
Profit & Loss Figures
Profitability Ratios
Liquidity Ratios
Operational Ratios
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Technical Analysis
Focus on the movement of the share prices
going up or going down.
Scenario Analysis
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Investments
Investment means to invest something in
some where.
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Uses of Investments
Three uses of investments;
1. Consumption
2. Savings
3. Investing
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Investing
You consume less than you save and then
from saving you can always think about
investment.
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Savings
It is very important to see that how you
save the money.
• You save money in your home at secure
place.
• Committees.
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Channels of Savings
• Banking
• Non-financial institutions
• National saving schemes
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Portfolio Management
How to manage different sectoral things.
“Don’t Keep all your eggs in one basket”
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Investment Analysis and Portfolio
Management
Mutual fund are also used in the portfolio.
• Collection of eggs.
• Collection of different shares, cash and
foreign exchange.
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Bonds
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Term Finance Certificates
Bearer bonds
Fixed Income bonds
Euro bonds
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