This lecture is prepared by Dr. Muhammad Wajid Raza. The lecture presents an overview of the term "investment".

1. Investment and Portfolio analysis
SHAHEED BENAZIR
BHUTTO UNIVERSITY,
PAKISTAN
Course Instructor
Dr. Muhammad Wajid Raza
Assistant Professor at Shaheed Benazir Bhutto
University Dir Pakistan
Email; wajidrazauom@sbbu.edu.pk
Youtube Channel; excelwithsham
Course: Investment and Portfolio Analysis

2. What is investment and portfolio analysis?
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‛The course title is composed of two words
1. Portfolio
2. Investment
Investment is a process in which we allocate our funds to profitable projects and we
expect future returns from out investment decisions.
‛
SHAHEED BENAZIR
BHUTTO UNIVERSITY
PAKISTAN
Investment involves decisions about future. We save or borrow money and then allocate our funds
to projects which can generate future profits.

3. What is investment?
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SHAHEED BENAZIR
BHUTTO UNIVERSITY
PAKISTAN
Save money
Borrow
money
Current time
period “t”
Holding
period
Receive
returns
Future time
period “t+1”
Reinvest your
returns
Lets visualize the process
We have to consider many factors in every investment decision. For example, risk
preferences, level of expected returns, macroeconomic conditions, time period of
investment, time value of money and opportunity cost. We will discuss these factors in
detail in coming classes

4. So… where can we invest
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We can allocate our funds to different options to reap reward for example
Invest opportunities Reward
Give loans
Interest
Real Estate Value appreciation
Shares Dividend, Capital gain
We can start new business Profit on sales
Value appreciation
Purchasing of gold
Promised future benefits
Purchase of insurance plan

5. What is a portfolio
‛Portfolio: The word portfolio means combination of any thing.
‛It can be combination/collection of your favorite movies
‛It can be combination/collection of favorite dresses and so on.
‛In financial terminology we can define portfolio as:
The combination of financial securities and other assets in such a way that can increase the level of expected
returns at a given level of risk or minimize the level of risk at a given level of returns.
‛So we can invest our money in different combination of assets, ranging from gold or real estate to complex
financial instruments, i.e., bonds, shares, futures, options, crypto-currency and so on….
Please read the work of Henry Markowitz about portfolio investment. Its one of the pioneering work about
portfolio investment and investors preferences
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6. 6
Importance of investment?
• Circulation of funds
• Safeguard time value of money
• Provide future returns
• Provide job opportunities
• Reduce income inequality
• Help in economic development
• Upgrade living standards
• Help in executing idea in to practice

7. 7
What if we don’t invest?
 First, If we do not invest, we can’t earn anything on cash
 Second, the purchasing power of cash diminishes because of inflation
 This means that if savers do not invest their savings, they will not only
lose possible return on their savings, but will also lose value of their
money due to inflation.
 Finally, we will not play our role in the overall development of our
economy.

8. ‛Thank you so much….
‛If you have any questions feel free to contact me on my email address,
wajidrazauom@sbbu.edu.pk
‛Or watch the video lecture on excelwithsham and comment there.
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