MRS. SHILPA.R.

Y
G
Assistant Professor
a
Davan Institute of Advanced Management
Studies Davangere
INVESTMENT
MANAGEMENT
What is Investment?

The meaning of investment is putting your money

into an asset that can grow in value or produce
income or both. For example, you can buy equity stock
of a listed company in the hopes of receiving regular
dividends and capital appreciation in the form of the
share price.
Your savings become investments when they are put
into assets that carry investment risk or a degree of
illiquidity. Such investments help you create wealth that
can be used as an emergency fund, a retirement
corpus, for buying a house, or funding a child's
education, etc.
Objectives of Investment
The need for investment will grow as you move ahead in
life. Growing responsibilities will demand an increase in
investment. The primary objectives of investment are
listed below:
 Safeguard your Money
Investing keeps your money safe from immediate
and unnecessary expenditures. It also helps you keep
your money safe from inflation effects. Inflation
erodes the value of your money unless it is invested
in an interest-earning asset. Thus, investing will help
you automatically keep up with inflation.
 Grow your Savings
Investment is the only way to start growing your
invested money. It allows your money to earn interest
and if you keep the interest invested it will also start
to earn interest.
Build Funds for Emergencies
Life is usually a series of ups and downs. Few times you are earning
decent and saving money while other times you need a large sum for an
emergency. Building investment pools help you on such rainy days.
Secures your Retired Life
Retired life is where you don’t have a source of income to sustain your
life. Once you have built a retirement corpus, you can experience the
freedom that comes with it.
Save Tax
Investment in tax-saving instruments like life insurance plans, ULIPs,
PPF, NPS, etc allows you to claim deductions on your taxable income.
Thus, investing in specific assets can help you reduce your tax liability.
Many of these investments also help you reduce your future tax with tax-
free maturity values.
Fund Bigger Life Goals
Your monthly income will not be enough to purchase your next car or
build a house for your family. However, if you invest a small sum in a few
years both could be possible.
 Investment
management
Investment management the professional
is management
of various asset
shareholdin bonds, and other securities,
assets, such
gs, as real
including
estate, to meet specified investment goals for
the benefit of investors
Investment
management
Investment and Saving a
alternatives
Insurance
Insurance is a means of protect ion from financial loss
in which, in exchange for a fee, a party agrees to
compensate another party in the event of a certain
loss, damage, or injury.
Health insurance policies cover the cost of medical
treatments.

Life insurance provides a monetary benefit to a

decedent's family General insurance covers property
and liability risks.
Pension Plans These investment plans allow
you to systematically save money over the years
so that you can enjoy a steady income once you
retire.

National Pension System e (NPS) is a voluntary

retirement savings scheme laid out to allow the
subscribers to make defined contribution towards
planned savings thereby securing the future in the
form of Pension.

The Atal Pension Yojana is a government of India

scheme that ensures the old age income security of
the working poor and is focused on encouraging
and enabling them to save for their retirement.
 Government of India has introduced a pension
scheme for unorganised workers namely
Pradhan Mantri Shram Yogi Maan-dhan
(PM-SYM) to ensure old age protection for
Unorganised Workers.

Pradhan Mantri Laghu Vyapari

r Mandhan Yojana
also known as National Pension
d Scheme of Traders
and Self Employed Persons. This scheme was
launched for shopkeeper's /retail traders
and self-employed persons for
providing monthly minimumthe
attaining assured
age of 60
pension of Rs 3000/- after years.
 M
The Pradhan Mantri Kisan aan-Dhan
Yojana (PM- KMY) aims to secure the lives
of 5 crore small and marginal farmers by
providing them a minimum pension of ₹3000
per month, who attains the age of 60 years.
A stock is a general term used to describe the
ownership certificates of any company. A stock
is a security that represents a fractional
ownership in a company.
g
A bond is a fixed-income investment that
represents a loan made by an investor to a
borrower, ususally corporate or governmental.
Bonds refer to high-security debt instruments
that enable an entity to raise funds and fulfil
 mutual fund is a pool eof money managed by a
professional und Manager. It is a trust that coll cts
money from a number of nvestors who share a
common inv stment objective and invests he same
in equities, bonds, money market instruments
and/or ther securities.

“Investors protection is a wide term, it

encompasses all the measures. designed to protect
investors from malpractices of brokers, companies
managers to issue, merchant bankers, registrar to
issues etc.
 h
Stock market It is a place where shares of
pubic listed companies are traded.

The primary market refers to the market where

securities are created and first issued,
The secondary market is where investors
buy and sell securities they already own.

stock exchange is a forum where securities like bonds

and stocks are purchased and traded. This can be both
an online trading platform and offline
What is stock trading?
Trading typically means buying and selling shares
in the secondary market on the same day. So, it is
necessary to get an understanding of the primary
and secondary markets.
Primary market: A primary market is where
companies issue new securities and offer them to
the public. So, the transaction happen between
issuer and buyer .
Secondary market: In the secondary market,
you can buy and sell shares that are issued in the
primary market. The transaction takes place
between the seller and buyer. The stock exchange
or broker acts as an intermediary in the
What is Stock Market Operations??
Stock Market is a financial market where the shares of the
public listed companies are traded. The primary market is a
market where the companies raise capital with the help of
Initial Public Offering (IPO). Once the securities are sold in the
primary market, they are then traded in the secondary market.
Here one investor buys shares from another investor at the
prevailing market price or at whatever price both the buyer and
seller agree.

Here one investor buys shares from another investor at the

prevailing market price or at whatever price both the buyer and
seller agree upon. The secondary market are regulated by
regulatory authority. The secondary and primary markets in
India are governed by the Securities and Exchange Board of
India

A stock may be bought or sold only if it is listed on an

exchange. It is the place where stock buyers and sellers meet
Trading Procedure on
a Stock Exchange
Stock Exchange
The Securities Contract and
Regulation Act defines a stock
exchange as, “An organisation or body of
individuals, whether incorporated or not
established for the purpose of assisting,
regulating, and controlling of business in
buying, selling, and dealing in securities.”
1. Selection of Broker
One can buy and sell securities only through the brokers
registered under SEBI and who are members of the stock
exchange. A broker can be a partnership firm, an individual,
or a corporate body. Hence, the first step of the trading
procedure is the selection of a broker who will buy/sell
securities on the behalf of a speculator or investor. Before
placing an order to the registered broker, the investor has to
provide some information, including PAN Number, Date of
Birth and Address, Educational Qualification and Occupation,
Residential Status (Indian/NRI), Bank Account Details,
Depository A/c details, Name of any other brokers with
whom they have registered, and Client code number in the
client registration form. After getting information regarding
all the said things, the broker opens a trading account in the
name of the investor.
2. Opening Demat Account with Depository
An account that must be opened with the Depository
Participant (including stock brokers or banks) by an Indian
citizen for trading in the listed securities in electronic form is
known as Demat (Dematerialised) Account or Beneficial
Owner (BO) Account.
The second step of the trading procedure is the opening of a
Demat Account. The Depository holds the securities in
electronic form. A Depository is an organisation or
institution, which holds securities like bonds, shares,
debentures, etc. At present there are two Depositories;
namely, NSDL (National Securities Depository
Ltd.) and CDSL (Central Depository Securities Ltd.). The
Depository and the investor do not have direct contact with
each other and interact with each other through Depository
Participants only. The Depository Participant will have to
maintain the securities account balances of the investor and
intimate investor from time to time about the status of their
3. Placing the Order
The next step after the opening of a Demat Account is
the placing of an order by the investor. The investor
can place the order to the broker either personally or
through email, phone, etc. The investor must make
sure that the order placed clearly specifies the range
or price at which the securities can be sold or
bought. For example, an order placed by Kashish is,
“Buy 200 equity shares of Nestle for no more than
₹200 per share.”
4. Match the Share and Best Price
The broker after receiving an order from the investor
will have to then go online and connect to the main
stock exchange to match the share and best price
available.
5. Executing Order
When the shares can be bought or sold at the price
mentioned by the investor, it will be communicated to
the broker terminal, and then the order will be
executed electronically. Once the order has been
executed, the broker will issue a trade confirmation slip
to the investors.
6. Issue of Contract Note
Once the trade has been executed within 24 hours, the
broker will issue a contract note. A contract note
consists of the details of the number of shares bought
or sold, the date, time of the deal, price of securities,
and brokerage charges. A contract note is an essential
legal document. It helps in settling disputes claims
between the investors and the brokers. A contract note
also consists of a printed unique order code number
assigned to each transaction by the Stock Exchange.
7. Delivery of Share and making Payment
In the next step, the investor has to deliver the
shares sold or has to pay cash for the shares bought.
The investor has to do so immediately after receiving
the contract note or before the day when the broker
shall make delivery of shares to the exchange or
make payment. This is known as Pay in Day.
8. Settlement Cycle
The payment of securities in cash or delivery of
securities is done on Pay in Day, which is before T+1
Day. It is because the settlement cycle is T+1 days
on w.e.f Feb 2023 rolling settlement basis. For
example, if the transaction took place on Tuesday,
then the payment must be done on Wednesday.
9. Delivery of Shares or Making Payment
On the T+1 Day, the Stock Exchange will then
deliver the share or make payment to the other
broker. This is known as Pay out Day. Once the
shares have been delivered of payment has been
made, the broker has to make payment to the
investor within 24 hours of the pay out day, as
he/she has already received payment from the
exchange.
10. Delivery of Shares in Demat Form
The last step of the trading procedure is making
delivery or shares in Demat form by the broker
directly to the Demat Account of the investor. The
investor is obligated to give details of his Demat
Account and instruct his Depository Participant (DP)
 s
A demat account helps investors to hold shares
and securities in an electronic format. This kind of
account is also called a dematerialized account.
A depository can be an organization, bank, or
institution that holds securities and assists in the
trading of securities. A depository provides security
and liquidity in the market, uses money deposited for
safekeeping to lend to others, invests in other
securities, and offers a funds transfer system.
d
A Depository Participant (DP) is described as an
Agent of the depository. They are the
intermediaries between the depository and the
investors.
stock selection
Fundamental analysis is a method of
assessing the intrinsic value of a stock. It
combines financial statements,
d external
influences, events, and industry
a ...
Economic Analysis relates to the analysis of
the economy. This related to study about the
economy in details and analysis whether
economic conditions are favorable for the
companies to prosper or not.
Industry Analysis: Industry factors like
demand and supply in the industry,
competitors in the industry etc.
Company Analysis. Company related factors like
image of the company and its managers,
there are three main steps to stock selection
based on technical alysis: stock screening,
chart scanning, and the trade setup.

What is Risk-Return Tradeoff?

Risk-return tradeoff states that the potential return rises with an
increase in risk. Using this principle, individuals associate low
levels of uncertainty with low potential returns, and high levels
of uncertainty or risk with high potential returns.
According to risk-return tradeoff, invested money can render
higher profits only if the investor will
accept a higher possibility of losses.
Thank You
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