This document provides an introduction to securities and investment concepts. It discusses the difference between real and financial assets, the clients of the financial system like households and businesses, different types of security markets, ongoing trends in finance, the process of security analysis and portfolio management, and categories of investments like debt instruments, equity, real estate, and derivatives. Modern portfolio theory takes a more scientific approach to risk and return compared to traditional portfolio planning.

1. Introduction to Securities

2. Real Assets Vs Financial Assets
 Real Assets produces goods and services where as
Financial Assets define the income or wealth
among investors
 Real assets appear only on the asset side of
balance sheet where as financial assets always
appear on both side of balance sheet
 Financial Assets are created and destroyed in the
ordinary course of doing business but real assets
are destroyed only by accident or wearing out over
the time.

3. Clients of the Financial System
 The household sector
 The business sector
 The government sector

4. Market and Market Structure
 Direct search market
 Brokered market
 Dealer market
 Auction market

5. On Going Trends
 Globalization
 Securitization
 Financial Engineering
 Revolution in information and communication
networks

6. What Is Security Analysis?
 The entire process of estimating return and risk for
individual securities is known as security analysis
 Modern security analysis differ in emphasis from
traditional security analysis, the former
emphasizes risk and return estimates and the later
emphasizes the calculation of an intrinsic value.

7. Portfolio Management
 Portfolios are combinations of assets. In this text,
portfolios will consist of collection of securities.
 Traditional portfolio planning was all about
personal needs and desire of the investors.
 Modern portfolio theory follows a more scientific
approach. It is based more on the risk and return
and also the investors attitude towards risk

8. Investment Versus Speculation
 An Investment is a commitment of funds made in
the expectation of some positive rate of return.
 Investment is distinguished from speculation by
the time horizon and risk-return characteristics of
the investment.
 Same stock or financial instrument may used for
investment or speculation based on intense and
characteristics of risk-return.

9. The Investment Process
 Security Analysis
 The Computer and Investment Analysis
 Portfolio Management

10. Investment Categories
 Debt Instruments
 Institutional Deposits and Contracts
 Government Debt Securities
 Private Issues
 International Bond Investing
 Equity
 Equity investments via institutions
 Variable annuities
 Insurance policies

11. Continue…
 Direct Equity Investments

Common Stock
 Stock Split
 Stock Dividends
 Preferred Stock
 International Equity
 Real Estate
 Options and Futures