8/6/2019 1 Investment Environment

1/19

Investment Environment

8/6/2019 1 Investment Environment

2/19

Dr Raju Indukoori

Basic questions on Investment

1. What is investment?

2. Who is an investor?

3. Why do we invest?

4. What do we expect from investment?

5. Where should I invest?

6. How do I invest?

7. How much should I invest?

8. What should be the investment tenure?

9. When to Invest?

8/6/2019 1 Investment Environment

3/19

Dr Raju Indukoori

1) What is Investment?

Ans: Money for money It is the process of planting your money in an

prospective avenue for future returns.

In a simple sense investment is sacrifice of

current rupees for future rupees or it is a

process of making your money growing.

8/6/2019 1 Investment Environment

4/19

Dr Raju Indukoori

2) Who is an investor?Ans: Individual, Institution, Government and Foreign

Individual Investors

Institutional Investors

Government Investments

Foreign Investors

8/6/2019 1 Investment Environment

5/19

Dr Raju Indukoori

3) Why do we invest?Ans: Know your investment needs & Priorities

Real Needs Psychological Needs

High cost of daily expenses Passion to own a house

Increasing anticipated daily expenses Passion to become wealthy

Increasing current income Fear and In-secure future

Decreasing future income Influence of analysts, advisors and agents

Tax issues Demonstration effect

Children Education & Marriage Greed

Foreign Trips Promotional activities

New financial instruments Herd behavior

8/6/2019 1 Investment Environment

6/19

Dr Raju Indukoori

4) What do we expect from Investment?

Ans: Know your investment objectives

Regular earnings or income

Capital Appreciation and Wealth maximization

Hedge against inflation and Future Consumptions

Monetary welfare

8/6/2019 1 Investment Environment

7/19

Dr Raju Indukoori

5) Where should I invest?

Ans: Investment alternativesInvestment Alternatives

Real assets

Financial assets

Areas of investment

One asset

Multiple asset

Markets for Investment

Stock Market

Debt Market

Money Market

Real Estate Market

8/6/2019 1 Investment Environment

8/19

Dr Raju Indukoori

6) How Should I Invest?

Ans: Better invest for yourselfMethod of Investing

Direct Investing

Indirect Investing

Sequence of Investing

One time investment

Series / periodic investment

8/6/2019 1 Investment Environment

9/19

Dr Raju Indukoori

7) How much should I Invest?

Ans: Size of InvestmentDepends on

Income

Current Expenditure

Savings

Future needs

8/6/2019 1 Investment Environment

10/19

Dr Raju Indukoori

8) What should be the Investment Tenure?

Ans: Depends on investment objectives Short-term

Medium-term

Long-term

8/6/2019 1 Investment Environment

11/19

Dr Raju Indukoori

9) When to Invest?

Ans: Investment TimingIt determines

Investment entry

Investment exit

Investment holding

8/6/2019 1 Investment Environment

12/19

Dr Raju Indukoori

Were all the questions answered?

8/6/2019 1 Investment Environment

13/19

Dr Raju Indukoori

Investment Process

Process of Investing

Frame investment objectives

Confirm availability offunds

Search investment alternatives matching the objectives and funds

Prioritize the investment alternatives and select one or few

Deploy funds by buying the asset/s

Follow up and monitorthe investments periodically or whenever needed

Make changes according to return, risk, need, liquidity and marketability criteria

Evaluate the portfolio.

8/6/2019 1 Investment Environment

14/19

Dr Raju Indukoori

Investments Distinguished

Trading

Speculation

Hedging

Arbitrage

Gambling

Betting Lottery

Gaming

8/6/2019 1 Investment Environment

15/19

Dr Raju Indukoori

Investment Considerations

Related to Investment Related to Investor

Return Size of Investment

Risk Age

Tax Benefit Risk Tolerance

Marketability Need for regular income

Liquidity Time Horizon

TransparencyAvailability of time to monitor &

analyze investments

8/6/2019 1 Investment Environment

16/19

Dr Raju Indukoori

Pancha Sutras for Perfect

Investments1. Identify investment alternatives

2. Analyze alternatives

3. Maintain self discipline

4. Invest with understanding and involvement

5. Evaluate investments periodically

8/6/2019 1 Investment Environment

17/19

Dr Raju Indukoori

Questions???

8/6/2019 1 Investment Environment

18/19

Dr Raju Indukoori

Self Test Questions

Q) Are you an investor?

Ans:

If yes : Answer all the questions discussedin this session

If No: Answer all the questions discussedin this session related to the investments

of your parents / relatives / friends

8/6/2019 1 Investment Environment

19/19

Dr Raju Indukoori

Thank You