INVESTMENT

AVENUES

GROUP MEMBERS
1.RIDDHI SANGOI
2.KHUSHBU PESHAVARIA
3.KUNJAL SHAH
4.PRITI BAFNA
5.BHAKTI GADA
6.HETVI SHAH
7.JILL DEDHIA
8.VAIBHAV DEDHIA
9.DEEPESH JAIN
10.ANSHUL RAMBHIA
11.SAGAR SHAH
12.ALTAMAS VORA
13.VAISHAK NAIR

CONTENTS
INVESTMENT IN INSURANCE
INVESTMENT IN REAL ESTATE
INVESTMENT IN FINANCIAL MARKET
INVESTMENT IN BANK
INVESTMENT IN POST OFFICE SCHEMES
INVESTMENT IN ART AND PASSION

INVESTMENT

Money you earn partly spent and rest sa

NEEDS OF AN
INVESTMENT
Earn return on your idle resources

GOLDEN RULES OF
INVESTMENT

Investment in
insurance

INVESTMENT IN INSURANCE
Insurance is a mechanism of collecting money

from
large group in small amounts called premium &
compensating few people who are victims of losses
& damages. The concept of insurance involves
paying a premium to the insurance company to
provide cover on a certain risk.

Types of insurance
Life insurance: provides benefit to nominee or legal

heirs when the person who is insured dies.

Health insurance: pays for covered medical
expenses & prescription medications.
Property insurance: pays benefit if the insured
property is damaged.
Vehicle insurance: pays benefit if the insureds
vehicle is damaged.
Liability insurance: provides protection in case of
liability claims against the insureds action.
Disability insurance: pays benefit if the person
accidently injured & unable to work.

ADVANTAGES OF
INSURANCE
INCOME GURANTEED THROUGH ANNUTIES
DIVIDENDS ENABLE GROWTH
RISK GUARD
TAX BENEFITS
MORTGAGE RECOVERY

DISADVANTAGES OF INSURANCE
INCONSISTENT PREMIUMS
DEDUCTION OF FUNDS
INSUFFICIENT FUNDS
EXPIRATION OF TERM INSURANCE
LANGUAGE OF PREMIUM

INVESTMENT IN
REAL ESTATE

INVESTMENT IN REAL
ESTATE
Investment in real estate is a great way to grow

your wealth if done responsibly , with conservative

financing , & with an understanding of the tax
implications.
Investment in real estate includes properties like
building , industrial land , plantations ,farm houses ,
agricultural land near cities & flats. Such properties
attract the attention of affluent investors

ADVANTAGES OF REAL
ESTATE
Scope for capital appreciation
Income stream
Sense of security
Sense of pride
Self occupation
Tax shelter

DISADVANTAGES OF REAL
ESTATE
LEGAL ISSUES
HIGH COST OF MAINTENANCE
MUNICIPAL & OTHER LEVIES
IT IS NOT EASY TO ACQUIRE

Investmen
t in
financial
market

Financial Markets

Organizations that facilitate the trade in financial products. i.e. Stock

exchanges facilitate the trade in stocks, bonds and warrants

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Types of financial markets

The financial markets can be divided into different categories:
Capital Market
Stock markets, which provide financing through the issuance of
shares and enable the subsequent trading.
Bond markets, which provide financing through the issuance of
Bonds, and enable the subsequent trading.
Money markets, which provide short term debt financing and

investment.

Derivatives markets, which provide instruments for the

management of financial risk.

Foreign exchange markets, which facilitate the trading of foreign

exchange.

Commodity markets, which facilitate the trading of commodities.

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Capital Market

The capital market is the market for securities, where

companies and governments can raise long-term funds.

The capital market includes the stock market and the

bond market.

Financial regulators oversee the capital markets to

ensure that investors are protected against fraud.

The capital markets consist of primary markets and

secondary markets.
Primary markets: Newly formed (issued) securities are
bought or sold.
Secondary markets allow investors to sell securities
that they hold or buy existing securities.
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Primary Market

It deals with the issuance of new securities. Companies,

governments or public sector institutions can obtain
funding through the sale of a new stock or bond issue.

In the case of a new stock issue, this sale is an initial

public offering (IPO).

Features Of Primary Market are:

Market for new long term capital.
Securities are sold for the first time.
Issued by the company directly to investors

Methods of issuing securities in the Primary Market

Initial Public Offer;
Rights Issue (For existing Companies); and
Preferential Issue.
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Secondary Market

It is the market for trading of securities

that have already been issued in an initial
offering
Once a newly issued stock is listed on a
stock exchange, investors and
speculators can easily trade on the
exchange
A stock exchange is an organization
which provides facilities for stock brokers
and traders, to trade company stocks and
other securities.
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Money market
Money market is a mechanism
that deals with the lending of
short term funds (less than one
year)
A segment of the financial
market in which financial
instrument with high
liquidity and very short
maturities are traded.

Instrument of Money Market

Treasury bills
Commercial bills
Money at call
Promissory notes

DERIVATIVES MARKET

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WHAT IS DERIVATIVE ?

25

Types of Derivative Contracts

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PARTICIPANTS IN A DERIVATIVE MARKET

Hedgers: These are investors with a present or
anticipated exposure to the underlying asset which
is subject to price risks. Hedgers use the derivatives
markets primarily for price risk management of
assets and portfolios.
Speculators: These are individuals who take a view
on the future direction of the markets. They take a
view whether prices would rise or fall in future and
accordingly buy or sell futures and options to try and
make a profit from the future price movements
of the underlying asset.
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.continued
Arbitrageurs: They take positions in
financial markets to earn riskless profits.
The arbitrageurs take short and long
positions in the same or different contracts
at the same time to create a position
which can generate a riskless profit.

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Foreign Exchange
The foreign exchange market
Is the market where one buys or

sells
the currency of country A with
the currency of country B

A currency exchange rate

Is simply the ratio of

a unit of currency of country A to

a unit of the currency of country B
at the time of the buy or sell
transaction

FUNCTIONS OF FOREIGN EXCHANGE MARKET

THERE ARE TWO

FUNCTIONS OF
FOREX MARKET
CONVERTING
CURRIENCES
REDUCING RiSK

The Foreign Exchange Market

Currency conversion in the foreign

exchange market

Is necessary to complete private and

commercial transactions across borders

A tourist needs to pay expenses on the
road in local currency
A firm
Buys/sells goods and services in the other
countrys local currency
Uses the foreign exchange market to invest
excess funds

Is used to speculate on currency

movements

The Foreign Exchange Market

Minimizes foreign exchange risk (unpredictable

rate swings)
To do so there are different ways to trade
currencies

Spot exchange rates: the days rate offered by a

dealer/bank
Forward exchange rates:
Agreed

in advance rates to buy/sell a currency on a

future date
Usually quoted 30, 90, 120 days in advance

The market is open 24 hours

Arbitrage is the process of buying low and

selling high given slightly different exchange

rate quotes in one location vs another (e.g.,
London vs Tokyo)

Prices and Exchange Rates

The law of one price:
Identical products sold in different countries must

sell for one price if their price is expressed in one

currency
Assumptions:

Competitive markets

No transportation costs; no trade barriers

Purchasing Power Parity (PPP):

If the law of one price holds for all goods / services,

the PPP exchange rate is found by comparing prices

of identical products in different countries

Convertibility
Currency convertibility and

government policy

Freely convertible: residents/non-

residents allowed to purchase unlimited

amounts of a foreign currency with the
local currency
Not freely convertible: residents/nonresidents not allowed to purchase
unlimited amounts of a foreign currency
with the local currency

Countertrade
Barter agreements by which goods and

services can be traded for other goods

and services

Commodity marketrefers to markets that

trade in primary rather than manufactured
products.

Commodities traded on the

exchange.
Agri Products
JEERA
PEPPER
CHILLI
TERMERIC
GUAR SEEDS
GUAR GUM
SOYA BEANS
SUGAR
MAIZE

Precious Metals

GOLD
SILVER
PLATINUM

Advantages & disadvantages of

financial market
High interest
Bonus
High volatility
Dividend
Not Suitable to Provide
Capital appreciation

Retirement Income
Large Number of

Choices
Risk of ownership

DEPOSITS
WITH
BANK
Investment of surplus money in bank deposits is
quite popular among the investors (particularly
among salaried persons). Banks (co operative and
commercial) collect working capital for their business
through deposits called bank deposits. The deposits
are given by thje customers for specific period and
the bank pays interest on them. The deposits can be
accepted from the individuals, institutions and even
business enterprises. The business and profitability
of banks depend on deposit collection. For depositing
money in the bank, an investor / depositor has to
open an account in the bank.

TYPES OF DEPOSITS
ACCOUNTS
SAVINGS BANK ACCOUNT
FIXED DEPOSITS ACCOUNT
RECURRING DEPOSIT ACCOUNT
CURRENT DEPOSIT ACCOUNT

ADVANTAGES
OF
BANK
DEPOSIT
Investment is reasonably safe and secured with
adequate liquidity.
Banks offer reasonable rate of return on the
investment made and that too in a regular
manner.
Banks offer loan facility against the investment
made.
Procedures and formalities involved in a bank
investment are limited, simple and quick.
Banks offer various services and facilities to
their customers.

LIMITATION /DEMERITS OF BANK

DEPOSIT
The rate of return in the case of bank

investment is low as compared to other

avenues of investment.
The return on the investment is not adequate
even to protection against the present
inflation rate in the country.
Capital appreciation is not possible in bank
investment

INVESTMENT IN
ART AND PASSION

INRODUCTION
There is a long history of individuals and retailers

actively trading old master paintings, classical

sculptures, ceramics, coins, drawings, antique
furniture and other upmarket collectibles.
Traditionally, however, there has been little interest
in operation of a commercial fund that invested in
art works rather than in shares, bonds or real estate
and that provided superior financial rewards for
investors by trading those works.

Post Office Deposits

Post office operates as a financial

institution.It collects small savings of the people

through savings bank accounts facility.
Time deposit and government loans are also
collected through post office.
Certain government securities such as Kisan vikas
patras,National savings certificate are sold
through post office.
Postal saving banks schemes were popular in india
for a long period as banking facility were limited
and were available in urban areas.

Some Postal Savings

Schemes are:Savings bank accounts
Monthly income schemes
Recurring deposits
Time deposits
Public Provident Fund

C
I
L
B
P U D E NT
I
V
O
PR
D
N
FU

INTRODUCTI
ON
STATURORY SCHEME OF THE CENTRAL GO

FEATUREs
EXTREMELY LOW RISK

ADVANTAGE
AMOUNT DEPOSITED IN A YEAR CAN BE
S

ISADVANTAGES

AMOUNT DEPOSITED IN PPF HAS A LOCK IN PE

ECOMMENDATION

EXCELLENT WAY TO GET TAX EXEMPTIONS {UNDER SECTION

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