Finance

+0)26-4



INVESTMENT

Learning Objectives
L L L L L

What is investment, speculation and gambling. Explain the different modes of investment for investor. Discuss the financial investments, physical investments, maketable investments and non marketable investments. What are the factors influencing the investment? Who is investor? What are the qualities of investor? Discuss the different types of investor.

INTRODUCTION
“An investment operation is one which, upon thorough analysis promises safety of principal and an adequate return. Operations not meeting these requirements are speculative.” - By Graham and Qadd’s Security Analysis “Investment Management is the process of managing money, including investments, budgeting, banking and taxes, also called as money management.”

We shall discuss about the following factors: • Firstly: Meaning, concept, characteristics, need and importance, avenues, classification and modes of investment. • Secondly: Influencing factors, process, feature, source of risk, recent trends and problems of investment. • Thirdly: Meaning, characteristics, difference in speculation, investment and gambling.

2

Investment Management

MEANING AND CONCEPT OF INVESTMENT
Investment is a term for several closely related meanings in finance and economics. Investment according to Theoretical Economics Investment means the production of capital goods - goods which are not consumed but instead used in future production.

Examples include • Building • A rail road • A Factory clearing land • Putting oneself through college
Investment according to Finance Term Investment means buying of Assets. For Examples • Buying stocks and bonds • Investing in real estate • Mortgages These investments may then provide a future income and increase in value (i.e., investing in real estate). Investment according to Oxford Dictionary Investment means the investing of money. Investment from an Individual Point of View Investment refers to a money

References: Stevenson, Jennings, Fundamentals of Investments, West Publishing House, New York, 1977. Dougall, Herbeat, E., Investments, 9th ed., Prentice Hall, Englewood, N.J., 1978. Amling, Frederick, Investments 3rd ed., Prentice Hall, Englewood, N.J. 1978. Smith, Eiteman, Modern strategy for Successful Investing, Dow Jones Irwin Inc., Illinois, 1978. Fischer and Jordan, Security Analysis and Portfolio Managements, Prentice Hall. Prasanna Chandra, Investment Analysis and Portfolio Management, Tata McGrow Hill, 2003. Investment 29 Fabozzi, F., and I.M. Pollach, The Hand Book of Fixed Income Securities, 2nd ed. Homewood., III.: Dow Jones Irwin, 1987. Bhole, L.M., Financial institutions and Makets, Tata McGraw Hill, New Delhi, 2003. Khan, M.Y., Indian Financial Management System: Theory and Practice. Farrell, J.L., Jr., Portfolio Management, Second edition, McGraw Hill, New York, 1997. Jones, C.P., Investments: Analysis and Management, Second Edition, John Wiley and Gon, New York, 1988. Brealey, R.A., An Introduction to Risk and Return on Common Stocks, Cambridge, Mass, MIT Press, 1969. Brown, R., “Risk and return is Emerging markets” Investing/Spring 1991. Prasanna Chandra, Financial Management, Tata McGraw Hill, New Delhi, 2004. I.M. Pandey, Financial Management, Vikas Publishing House, 2004. Bhalla, V.K., Investment Management, S. Chand and Co. Ltd., New Delhi, 1982. Fredrick Amling, Investments: An Introduction to Analysis and Investment, Engle-wood Cliffa, N.J. Prentice Hall, 1978. Clark Francis J., Investment Analysis and Management, McGraw Hill, 2nd ed. U.S.A., 1976. nnn