Capital Markets and Investment Banking Process Paper
Capital Markets and Investment Banking Process Paper Investments banking process and capital markets are elements in understanding how to invest and be successful in the investments. In the investment backing process, investor might enlist the help of an investment banker which can help the investor with buying, selling, and trading of securities, managing assets and give financial advice. Portfolio construction is another area that should be examined to make sure that diversification, asset allocation and investment performance in being achieved for increase return. A complete understanding of capital markets is vital to the investor which can give a greater understanding on how and where investments are being processed.
Investment Banking Process
The investment banking process starts with the investor’s portfolio or creating a portfolio. The investor would need to review, update, buy and sell as need to keep the portfolio in sync with the investor’s needs and goals. The investor would need to make decision of how to apply asset allocation to the portfolio. Asset Allocation is “allocation of an investment portfolio across broad asset classes” (Bodie, Kane, & Marcs, 2008, p. 10). In the asset allocation process, the investor will decide on upon which asset classes to invest in which can be bonds, stocks, and mutual funds to name a few. Once the investor has decided on the asset allocation and asset class path the portfolio should take, the investor would need to choice a security to invest in. A security selection is a “choice of specific securities within each asset class” (Bodie, Kane, & Marcs, 2008, p. 10), such as an investor deciding to purchase stock in Microsoft or Apple. In order for an investor to make an informed and concrete decision on investment choices, the investor should to analysis on the securities which includes reviewing the securities performance and valuation. In addition, the investor would need to evaluate the risk-return trade-off
Investment Banking Process
The investment banking process starts with the investor’s portfolio or creating a portfolio. The investor would need to review, update, buy and sell as need to keep the portfolio in sync with the investor’s needs and goals. The investor would need to make decision of how to apply asset allocation to the portfolio. Asset Allocation is “allocation of an investment portfolio across broad asset classes” (Bodie, Kane, & Marcs, 2008, p. 10). In the asset allocation process, the investor will decide on upon which asset classes to invest in which can be bonds, stocks, and mutual funds to name a few. Once the investor has decided on the asset allocation and asset class path the portfolio should take, the investor would need to choice a security to invest in. A security selection is a “choice of specific securities within each asset class” (Bodie, Kane, & Marcs, 2008, p. 10), such as an investor deciding to purchase stock in Microsoft or Apple. In order for an investor to make an informed and concrete decision on investment choices, the investor should to analysis on the securities which includes reviewing the securities performance and valuation. In addition, the investor would need to evaluate the risk-return trade-off
References: Block, S., & Hirt, G. (2008). Fundamentals of Investment Management, 9th edition. New York:NY: McGraw Hill. Bodie, Z., Kane, A., & Marcs, A. (2008). Essentials of Investments, 7th edition. New York:NY: McGraw Hill. Brown, K., & Reilly, F. (2006). Investment Analysis and Portfolio Management. Mason, OH: Thomson.