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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

CONTENTSINVESTMENT IN INSURANCE

INVESTMENT IN REAL ESTATE

INVESTMENT IN FINANCIAL MARKET

INVESTMENT IN BANK

INVESTMENT IN POST OFFICE SCHEMES

INVESTMENT IN ART AND PASSION

INVESTMENTNEEDS OF AN INVESTMENTGOLDEN RULES OF INVESTMENT

Investment in insuranceINVESTMENT 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 insuranceLife 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 INSURANCEINCOME GURANTEED THROUGH ANNUTIES

DIVIDENDS ENABLE GROWTH

RISK GUARD

TAX BENEFITS

MORTGAGE RECOVERY

DISADVANTAGES OF INSURANCEINCONSISTENT PREMIUMS

DEDUCTION OF FUNDS

INSUFFICIENT FUNDS

EXPIRATION OF TERM INSURANCE

LANGUAGE OF PREMIUM

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INVESTMENT IN REAL ESTATEINVESTMENT IN REAL ESTATEInvestment 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 ESTATEScope for capital appreciation

Income stream

Sense of security

Sense of pride

Self occupation

Tax shelter DISADVANTAGES OF REAL ESTATELEGAL ISSUES

HIGH COST OF MAINTENANCE

MUNICIPAL & OTHER LEVIES

IT IS NOT EASY TO ACQUIRE

Investment in financial market

17Organizations that facilitate the trade in financial products. i.e. Stock exchanges facilitate the trade in stocks, bonds and warrantsFinancial MarketsTypes of financial markets The financial markets can be divided into different categories:Capital MarketStock 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.18Capital 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.19Primary MarketIt 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 MarketInitial Public Offer;Rights Issue (For existing Companies); andPreferential Issue. 20Secondary Market It is the market for trading of securities that have already been issued in an initial offeringOnce 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.21Money 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 MARKET24

WHAT IS DERIVATIVE ?25Types of Derivative Contracts

26PARTICIPANTS IN A DERIVATIVE MARKETHedgers: 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.27.continuedArbitrageurs: 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 ExchangeThe foreign exchange marketIs the market where one buys or sells the currency of country A with the currency of country BA currency exchange rateIs 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 transactionFUNCTIONS OF FOREIGN EXCHANGE MARKET

THERE ARE TWO FUNCTIONS OF FOREX MARKETCONVERTING CURRIENCESREDUCING RiSK

The Foreign Exchange MarketCurrency conversion in the foreign exchange marketIs necessary to complete private and commercial transactions across bordersA tourist needs to pay expenses on the road in local currencyA firm Buys/sells goods and services in the other countrys local currencyUses the foreign exchange market to invest excess fundsIs used to speculate on currency movementsThe Foreign Exchange MarketMinimizes foreign exchange risk (unpredictable rate swings)To do so there are different ways to trade currenciesSpot exchange rates: the days rate offered by a dealer/bankForward exchange rates: Agreed in advance rates to buy/sell a currency on a future dateUsually quoted 30, 90, 120 days in advanceThe market is open 24 hoursArbitrage 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 RatesThe law of one price:Identical products sold in different countries must sell for one price if their price is expressed in one currencyAssumptions: Competitive marketsNo transportation costs; no trade barriersPurchasing 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 countriesConvertibilityCurrency convertibility and government policyFreely convertible: residents/non-residents allowed to purchase unlimited amounts of a foreign currency with the local currencyNot freely convertible: residents/non-residents not allowed to purchase unlimited amounts of a foreign currency with the local currencyCountertradeBarter agreements by which goods and services can be traded for other goods and servicesUsed to get around the non-convertibility of currencies

Commodity marketrefers to markets that trade in primary rather than manufactured products.Commodities traded on the exchange.Agri ProductsPrecious Metals JEERAPEPPERCHILLITERMERICGUAR SEEDSGUAR GUMSOYA BEANSSUGARMAIZE

GOLDSILVER PLATINUMAdvantages & disadvantages of financial marketHigh interest

Bonus

Dividend

Capital appreciationHigh volatility

Not Suitable to Provide Retirement Income

Large Number of Choices

Risk of ownershipDEPOSITS WITH BANKInvestment 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 ACCOUNTSSAVINGS BANK ACCOUNTFIXED DEPOSITS ACCOUNTRECURRING DEPOSIT ACCOUNTCURRENT DEPOSIT ACCOUNTADVANTAGES OF BANK DEPOSITInvestment 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 DEPOSITThe 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 investmentINVESTMENT IN ART AND PASSIONINRODUCTIONThere 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 DepositsPost 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

PUBLIC PROVIDENT FUND

INTRODUCTION

FEATUREs

ADVANTAGES

DISADVANTAGES

RECOMMENDATION

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