Where Should I Invest - Neena prasad


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FLO organized an interactive session on Where Should I Invest… Real Estate, Stock Market, Jewellery, Art.. on September 30, 2013 at New Delhi.

The session was organized with the objective to provide a better understanding on the subject from a panel of experts comprising - Ms. Gagan Singh, CEO Business, Jones Lang Lasalle – Real Estate;Ms. Neena Prasad, Singapore Stock Exchange – Stock Market;Mr. Subhash Bhola, Bholasons Jewellers, - Gold, Diamonds, Jewellery and Ms. Roshini Vadehra, Vadehra Art Gallery.

In this presentation, Ms Neena Prasad talks about the importance of asset allocation and portfolio management. In her presentation, she highlighted on the various process flows in asset allocation and recommended allocation in percentage in Equity, Fixed Income & Alternate Investments such as Real Estate, Private Equity and Commodity. She suggested that investments would be research oriented and macro indicators of economy should be always kept in mind. She also advised that there should be no emotional attachment with the investments so that wise decisions can be taken in crucial times.

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Where Should I Invest - Neena prasad

  1. 1. Where to Invest Neena Prasad Singapore Exchange 30th September 2013 SGX The Asian Gateway
  2. 2. SGX The Asian GatewaySGX The Asian Gateway •When it comes to investing, risk and reward are inextricably entwined •Asset Allocation is equal parts science (quantitative analysis of risk and return) and art (driven by experience of risk, return and market cycles) •Market dynamics are researched and debated from different angles •Macroeconomics •Fundamentals of the economy – domestic and global •Dynamics of different asset classes with geo-political and other market trends •Upcoming events that are expected to impact investments and markets •Data available on volatility, inflation, forex flows, growth numbers, etc Benefits of Asset Allocation Diversification resulting in risk reduction Eliminate unintended asset class exposure Increase investment efficiency Helps you to sell high & buy low, by maintaining asset-wise exposure. Disciplined investing - with pre-defined book profit and cut loss levels Periodic reviews Asset Allocation – Why It Matters 1 Combination of Portfolios Capital market Line Standard Deviation (Risk) ExpectedReturn Efficient Frontier Most Efficient Portfolio The Science of Asset Allocation
  3. 3. SGX The Asian GatewaySGX The Asian Gateway Model Portfolios Research Equity Real Estate Commodity Fixed Income Alternative InvestmentsCash Strategic Asset Allocation Tactical Asset Allocation Your Investment Objectives Your Portfolio Risk Management Process Flow - Asset Allocation 2
  4. 4. SGX The Asian GatewaySGX The Asian Gateway Model Portfolios – Recommended Allocation in % Asset Class Strategic Tactical Strategic Tactical Strategic Tactical Equity 20 19 40 39 65 61 India Equity 16 16 33 33 55 55 Global Equity 4 3 7 6 10 6 Fixed Income 70 77 45 56 15 33 Short Term (incl cash) 30 32 20 24 10 22 Medium Term 20 35 15 27 2 10 Long Term 20 10 10 5 3 1 Alternate Investment 10 4 15 5 20 6 Real Estate 5 0 7 0 8 0 Private Equity 0 0 0 3 4 5 Commodity 5 4 8 2 8 1 Total 100 100 100 100 100 100 Conservative Moderate Aggressive 3
  5. 5. SGX The Asian GatewaySGX The Asian Gateway L, M, H refers to low, mid and high respectively. All returns are annualized, pre-tax. Product Exp Ret Inv Horizon Liquid / Liquid Plus L M H 8% - 9.5% 1 Days + Short Term Plans L M H 8% - 12% 3 - 6 Months Gilt Funds L M H 8% - 12% 12 Months + LT Bond Funds L M H Upto 10% 12 Months + FMPs / CP / CD L M H 8.5% - 9.25% Variable Arbitrage Funds / Structures L M H 6% - 12% 18 Months + Risk Product Matrix – Fixed Income 4
  6. 6. SGX The Asian GatewaySGX The Asian Gateway FD T Bills Corporate Deposit CP / CD / ICD Short Term Plans (MF) Structured Notes, PTC, High Yielding Corporate Bonds Income Funds Gilt Funds PSU Bonds State Govt Bonds Tax Free PSU Bonds Corporate Bonds Risk Spectrum Matrix – Fixed Income 5
  7. 7. SGX The Asian GatewaySGX The Asian Gateway All fixed income investments involve some form of risk that must be borne by the investor. Below is a general overview of the main areas of risk that should be considered before investing in any fixed income security. Interest Rate Risk The risk that the market value of securities might rise or fall, primarily due to changes in prevailing interest rates. All fixed income securities are susceptible to fluctuations in interest rates; if interest rates rise, bond prices will fall and vice versa. Credit Risk The risk that the issuer might be unable to pay interest and/or principal on a timely basis. Widely recognized rating agencies, such as Moody's, Standard & Poor’s, CRISIL, Fitch offer their assessment of an issuer’s creditworthiness. Government securities are considered the “safest” investment as they are backed by the “full faith and credit” of the Indian Government. On the other end of the scale, pass through certificates, high yield corporate bonds are considered have the greatest credit risk. Reinvestment Risk The risk that the income stream from the investment may be reinvested at a lower interest rate. This risk is especially evident during periods of falling interest rates where coupon payments are reinvested at a lower rate than the current instrument. By holding a diversified portfolio, the above risks may be managed and minimized. While a secondary market exists for most fixed income securities, they may not be liquid for smaller lots and if sold prior to maturity, the price received may be more or less than the amount of the original investment. Risk Considerations While Investing in Fixed Income 6
  8. 8. SGX The Asian GatewaySGX The Asian Gateway Investing in Overseas Market - Singapore 7 Business Trusts Exchange Traded Products REITs CatalistMainboard Funds GDRs Equities (IPO) Structured Warrants Equities (IPO/Sec) Debt Securities Perpetual Bonds Fixed and Floating Rate Bonds Convertible & Exchangeable Bonds Covered Bonds Commercial Papers Hybrid Capital Securities Structured Products Asset Backed Securities Loan Participation Notes
  9. 9. SGX The Asian GatewaySGX The Asian Gateway This presentation is being made available to certain authorized recipients for their general information only. While SGX and its affiliates have taken reasonable care to ensure the accuracy and completeness of the information provided in this presentation, they will not be liable for any loss or damage of any kind (whether direct, indirect or consequential losses or other economic loss of any kind) suffered due to any omission, error, inaccuracy, incompleteness, or otherwise, any reliance on such information. Neither SGX nor any of its affiliates shall be liable for the content of information provided by or quoted from third parties. Examples provided are for illustrative purposes only. The information in this presentation is subject to change without notice. Any recirculation, transmission or distribution of this presentation or any part thereof by any third party requires the prior written permission of SGX. SGX and its affiliates disclaim all responsibility and liability arising in connection with any unauthorised recirculation, transmission or distribution of this presentation or any part thereof. © SGX Ltd, November 2010 www.sgx.com Thank You 8 Singapore Exchange • London • Tokyo • Beijing 2 Shenton Way, #19-00 SGX Centre 1, Singapore 068804 Main: (65) 6236 8888 Fax: (65) 6535 6994 For more information, please contact: Head of Listings , India Neena Prasad neena.prasaad@sgx.com +(91) 981 150 4600
  10. 10. SGX The Asian Gateway Investing in Overseas Markets - Singapore Debt 9