definition of investment
TRANSCRIPT
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SUBMITTED TO:- SUBMITTED BY:-
DR. KHUJAN SINGH AMARJEET MOOND 15103046 M.com (F)
PRESENTATION ON INVESTMENT
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Definition of Investment
‘’Investment mean sacrificing some money value in the present with the expectation of making gain in the future’’.
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Dimension of Investment
Element of sacrifice
Element of futurity
Risk Expectation of gains
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Continue… Element of sacrifice = As soon as a person makes a commitment of some money value either in buying shares, piece of land, plant, etc., it entails an element of sacrificing current consumption of money value.
Element of futurity = Every investment is made with the aim of holding it for a certain time period. Few investor hold it for a few days, whereas other hold it for certain months or years.
Risk = since every investment activity has an element of futurity and the future is always uncertain, it include the risk factor.
Expectation of gains = no investment is done for charity. The element of sacrifice of the current utility of money value , futurity and the risk monetary loss put together, makes the basis for expecting gains from the invested money.
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Concepts• Pure Investment
• Speculation
• Gambling
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Pure Investment Carefully thought of
Well-planned
Based on the study of fundamental about investment avenues
Meant for long-time horizon
Low risk
Expected returns commensurate with the risk assumed
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SpeculationMeant comparatively for a shorter duration Based on market-related information
An act in which an investor has an attitude to take risk as compared to risk aversion
A positive attitude toward losses, in case of adverse happenings
Ready to book loss
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Gambling It like batting for an uncertain outcome. In gambling , the investor is always ready to take risk high degree of risk and at it. He creates a situation leading to risk and then assumes the risk so created. A gambling always expects higher gains in a very short time horizon due to the high degree of risk assumed.
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Investment ObjectivesSafetyRegularity of incomeCapital gainTax savingsLiquiditySpeculationHedgingArbitrage
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Risk in Investment Systematic risk
Non-systematic risk
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Systematic RiskInflation risk
Interest rate risk
Political risk
Market risk
Risk due to government policies
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Continue….Natural calamities
Monsoon
Industrial growth or output
International events
War-like situation/Internal peace
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Non-systematic RiskBusiness Risk
Financial Risk
Risk due to industry-specific policies
Disputes
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THANK YOU