tailieunhanh - Lecture Investment analysis & portfolio management - Chapter 2: Basic introduction investment and investment analysis
After studying this chapter you will be able to understand: Investment, reasons for investment, investment objectives, comparison of investment, investment environment, investment analysis, characteristics of investment, risk factors, securities. | Basic Introduction Investment and investment Analysis Outline Investment Reasons for investment Investment objectives Comparison of investment Investment Environment Investment Analysis Characteristics of investment Risk Factors Securities Investment Investment is the sacrifice of current consumption in order to obtain greater consumption at a later date. Investment is undertaken with the expectation that it will lead, ultimately, to a preferred pattern of consumption for the investor. Many investors would argue that their motivation for investment is to increase their wealth. This observation can be related back to the definition by noting that wealth permits consumption or, in more formal language, an increase in the stock of wealth permits an increase in the flow of consumption. Wealth and consumption are therefore two sides of the same coin. REASONS FOR INVESTING Investment Objectives Safety of principal You don't want to lose your initial investment Income The regular payment . | Basic Introduction Investment and investment Analysis Outline Investment Reasons for investment Investment objectives Comparison of investment Investment Environment Investment Analysis Characteristics of investment Risk Factors Securities Investment Investment is the sacrifice of current consumption in order to obtain greater consumption at a later date. Investment is undertaken with the expectation that it will lead, ultimately, to a preferred pattern of consumption for the investor. Many investors would argue that their motivation for investment is to increase their wealth. This observation can be related back to the definition by noting that wealth permits consumption or, in more formal language, an increase in the stock of wealth permits an increase in the flow of consumption. Wealth and consumption are therefore two sides of the same coin. REASONS FOR INVESTING Investment Objectives Safety of principal You don't want to lose your initial investment Income The regular payment of money that is earned from the investment Growth An increase in the value of your investment Liquidity The ability to turn your investment into cash very quickly Comparison of investment Real investment is the purchase of physical capital such as land and machinery to aid in achieving increased profits. In contrast, financial investment is the purchase of ”paper” securities such as shares and bonds. Our focus will be on financial investment Real investment is undertaken by firms to generate profits given the market conditions that they real investment, such as the purchase of a house or a painting, must be considered as part of the overall portfolio of assets held by an investor. Comparison of investment There are, however, links between the two forms of investment. For example, the purchase of a firm’s shares is a financial investment for those who buy them but the motive for the issue of the shares is invariably that the firm wishes to raise funds for real investment. .
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