Security Analysis & Portfolio Management By Ankur Mittal

SECURITY ANALYSIS & PORTFOLIO MANAGEMENT A Saving : A part of earning forgone or sacrificed consumption today. An Investment: An activity that commits fund in any financial/physical form in the present with an expectation of receiving additional return in the future. An Instrument Literary Meaning : A well recorded financial/legal document Financial Meaning: Funds raised from a large body of lenders, documents issued called instrument. A Security: Literary Meaning: Some thing that provides safety ; Pledge for repayment of a loan Financial Meaning: Where an instrument has a ready market, as in case of Govt. bonds or equity shares,the instrument is called a security. Primary/Derived…. Ownership/Debt…… Gilt edged/Govt. Security….

Security Analysis Numerous securities (7,000 listed Companies) Newer & Newer forms of securities are coming in to existence. Besides old ownership securities viz. equity, preference share & Debt securities viz. debenture, bond etc. New forms of securities such as Convertible Debentures Deep Discount Bonds Zero coupon Bonds Floating Rate Bond Euro Currency Bonds Flexi Bonds Global Depository Receipts American Depository Receipts Large varieties of Mutual Funds& so on Security Analysis means examining the risk return characteristics of individual securities Fundamental Analysis

&

Technical Analysis

A Portfolio

Literary Meaning: 1. A portable case for keeping loose papers 2. Office of a minister of State Financial Meaning: A combination or group of securities for the purpose of investment is referred to as a Portfolio

Investment & Speculation



An investment is one which upon thorough analysis promises safety principle and an adequate return



One not fulfilling this, is speculation.



Unlike gambling, it is not based on random outcomes.

Investment & Gambling



Gambling is putting money at risk by betting on an uncertain outcome with the hope of winning money.

Investment Process       

Setting Investment Policy Time Horizon, Risk Tolerance, Portfolio Mgmt Style Performing Security Analysis Fundamental Analysis & Technical Analysis Portfolio Construction Portfolio Revision Portfolio Performance Evaluation

Investment Risks

   

Credit Inflation Interest Rate Market Risk

Common Errors in Investment Management

    

Not having a clearly defined Investment Plan Not coping up with drastic changes Profit booked not realized at a right time Overdosing of information Shortcuts & Gimmicks

Qualities of a Smart Investor

   

Proper investment plan Consistent Investment Patience Keeping away of emotions.