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1. FINANCIAL SECTORS

2. Contents
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What is Financial Sector ?
Understand the Financial Sector
Types of Financial Sector

3. What is financial sector ?
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⊹ The financial sector is a section of
the economy made up of firms and
institutions that provide financial
services to commercial and retail
customers. This sector comprises
a broad range of industries
including banks, investment

5. 5
Understand the Financial Sector
Revenue from mortgages and loans, which
gain value as interest rates drop. The health of
the economy depends, in large part, on the
strength of its financial sector. The stronger it
is, the healthier the economy. A weak financial
sector typically means the economy is
weakening.
Many people equate the financial sector with
Wall Street and the exchanges that operate on
it. But there’s much more to it than that. The
financial sector is one of the most important

6. Types of FINANCIAL SECTORS :
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2
5
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7. What is share Capital?
• A company’s share capital is the
money it raises from selling common or
preferred stock.
• Authorized share capital is the
maximum amount a company has
been approved to raise in a public
offering.
• A company may opt for a new offer of
stock in order to increase the share 7

8. Pros and Cons of share capital :
Pro 1: You can make money in shares
Pro 2: It’s easy to buy shares
Pro 3: Plenty of shares to choose from
Pro 4: The benefits of growth vs dividend
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Con 1: You can lose money in shares
Con 2: Make sure you have enough funds
Con 3: You can get overexposed to risk
Con 4: The sharemarket might crash

9. “ What is mutual funds ?
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• A mutual fund is a type of investment vehicle consisting
of a portfolio of stocks, bonds, or other securities.
• Mutual funds give small or individual investors access
to diversified, professionally managed portfolios at a
low price.
• Mutual funds are divided into several kinds of
categories, representing the kinds of securities they
invest in, their investment objectives, and the type of
returns they seek.
• Mutual funds charge annual fees (called expense
ratios) and, in some cases, commissions, which can
affect their overall returns.

10. Pros
1.Advanced Portfolio
Management
2.Dividend
Reinvestment
3.Risk Reduction
(Safety)
4.Convenience and
Pros and cons of Investing in Mutual funds:
Cons
1.High Expense Ratios
and Sales Charges
2.Management Abuses
3.Tax Inefficiency
4.Poor Trade
Execution
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11. What is Gold fund ?
• Gold funds are investment vehicles that
offer exposure to gold.
• They come in a variety of forms, but
three popular varieties are those
investing in physical gold, gold futures
contracts, and gold mining companies.
• Investors interested in hedging against
inflation generally opt for gold funds that

12. Pros and cons of Investing in gold funds :
Pros
1.Gold is a hedge Against inflation
2.Liquidity
3.Diversification
4.Holds its value over a long period
of time
5.Most desired commodity
Cons
1.Gold is not a passive
investment
2.Gold is difficult to
store
3.Price correction can
lead to losses
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13. What is a Bank?
⊹ A bank is a financial institution licensed
to receive deposits and make loans.
⊹ There are several types of banks
including retail, commercial, and
investment banks.
⊹ In most countries, banks are regulated
by the national government or central
bank. 13

14. Want big impact?
Use big image.
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15. Pros and cons of Investing in bank :
Pros
1.Safety of Public
Wealth
2.Availability of Cheap
Loans
3.Propellant of Economy
4.Economies of Large
Scale 15
Cons
1.Chances of Bank
going Bankrupt
2.Risk of Fraud and
Robberies
3.Risk of Public Debt

16. What is ppf ?
• The PPF account or Public Provident Fund
scheme is one of the most popular long-term
saving-cum-investment products, mainly due to its
combination of safety, returns and tax savings.
• The PPF was first offered to the public in the year
1968 by the Finance Ministry’s National Savings
Institute. Since then it has emerged as a powerful
tool to create long-term wealth for ivestors.
• Investors use the PPF as a tool to build a corpus
for their retirement by putting aside sums of money
regularly, over long periods of time (PPF has a 15-
year maturity, and the facility to extend the tenure).
With its attractive interest rates and tax benefits, the
PPF is a big favourite with a 16

17. Pros and cons of Investing in PPf :
Pros
1.Safest Investment
Avenue
2.Fixed and Assured
returns
3.Tax benefits
4.Options to invest in
PPF 17
Cons
1. lock-in period of 7 years
2.Upper limit
3.Moderate Returns

18. What is Real Estate ?
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Real estate is the land along with any
permanent improvements attached to
the land, whether natural or man-
made—including water, trees,
minerals, buildings, homes, fences,
and bridges. Real estate is a form of
real property. It differs from personal
property, which are things not
permanently attached to the land,
such as vehicles, boats, jewelry,
furniture, and farm equipment.

19. Pros and cons Of investing in real estate :
Pros
1.Sense of Security
2.GenGenerates Cash
Flow
3.Home Loan Tax
Benefit
4.Simple and
Controlled
5.Property
Appreciation
Cons
1.Professional help
required
2.Time Commitment
3.Maintenance Cost
4.Less liquidity
5.Property Tax
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What is a Government Bond ?
• A government bond represents debt that is
issued by a government and sold to
investors to support government spending.
• Some government bonds may pay periodic
interest payments. Other government bonds
do not pay coupons and are sold at a
discount instead.
• Government bonds are considered low-risk
investments since the government backs
them. There are various types of bonds that
are offered by the U.S. Treasury are

21. Pros and cons of investing in
government bonds
Cons
• Offer low rates of return
• Fixed income falls
behind with rising
inflation
• Carry risk when market
interest rates increase
• Default and other risks
on foreign
Pros
• Pay a steady interest
income return
• Low risk of default for U.S.
Bonds
• Exempt from state and
local taxes
• A liquid market for
reselling
• Assessable through
mutual funds and ETFs

22. What is Life insurance ?
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• Life insurance is a legally binding contract that pays a death
benefit to the policy owner when the insured dies.
• For a life insurance policy to remain in force, the policyholder
must pay a single premium upfront or pay regular premiums
over time.
• When the insured dies, the policy’s named beneficiaries will
receive the policy’s face value, or death benefit.
• Term life insurance policies expire after a certain number of
years. Permanent life insurance policies remain active until
the insured dies, stops paying premiums, or surrenders the
policy.

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Life Insurance

24. Pros and cons of investing in life insurance :
Pros
1.Death benefit
2.Additional coverage
3.Guranteed Income
4.Tax Benefits
5.Availability of loan
6.Valuable return on investment
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Cons
1.Can be expensive
for old-aged people
2.The returns on life
insurance are not
significant
3.Insurers may not
pay the benefit
4.Complex policies
5.Exclusions

25. Thank you !
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