This document provides an introduction to investments, including financial markets, instruments, and asset classes. It discusses stocks, bonds, mutual funds and other investment vehicles. It also covers key investing concepts such as market indices, returns, risks, costs and taxes associated with different asset types. The document aims to educate readers on investment basics and analyzing different investment products.

1. Investment Basics
An Introduction to Investments

2. Session Out Line
 Financial Markets
 Financial Instruments
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3. Dilip Kumar Sharma

4. About Facilitator
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About the Facilitator

5. GYAANDEEP-
Engage, Enrich & Empower
An initiative by-
Digital Excellence Academy of Learning

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ABOUT DEAL & GYANDEEP
GYAAN DEEP is an initiative of DEAL- Digital Excellence Academy of Learning.
We aim to empower our fellow citizens by strengthening and unlocking potential in
key areas. Our aim is to strengthen your understanding in the Personal, Professional,
Social, and Financial domains through enhanced life Skills.
At DEAL, it is our firm belief that - “Your earning ability today is largely dependent
upon your knowledge and skill as input and your ability to combine these two in a
manner to contribute value that customers are willing to pay for, as the output .”
Here is your opportunity to Enrich your Self with your choice of subject and topic.
This initiative is a Corporate Social Responsibility programme by the community for
the community.

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Understanding Investment
▪ What is Investment?
“An Investment is the exchange/parking/trading of an asset for a
transaction or over a specified/unspecified period of time with an explicit
intention of reaping benefits/profits in terms of enhancing the value of
the asset through appreciation, dividend, interest that is earned/gained.”

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Debt – An Understanding
▪ Debt is lending for a coupon
▪ Coupon can be fixed or floating
▪ Is essentially a capital prevention tool
▪ Participants in the market for debts
▫ Government
▫ Corporate
▪ Featured by:
▫ Tenure
▫ Credibility

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ASSET CLASSES
Assets
Paper Assets
Savings Account
Fixed Deposits
Bonds
Primary Stocks
Secondary Stocks
Insurance
Mutual Funds
Physical Assets
Real Estate
Precious Metals
Commodities
Collectibles

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Bonds or Debt Security- Key Terms to Know
▪ PAR Value – Principal Amount is paid upon maturity of the bond and
is also known as Face Value
▪ COUPON- Annual Interest paid on the Par Value of the bond to the
investor.
▪ MATURITY- Term of the bond i.e. the date on which the issuer repays
the principal amount of the bond.

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Equity Explained
▪ Equity is about owning a part of the business
▪ Profitability of equity investment is dependent on numerous factors
like company performance, geo-political factors, investor sentiments.
▪ Estimation of value is based on net present value (NPV) of future
cash flows.
▪ Fundamental and technical analysis to identify stocks with growth
potential.
It’s about relying on fundamentals, timing technically and creating long term wealth by
associating with the long-term profitability of the company

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Equity Classification
▪ Market Capitalisation
▫ Large Caps
▫ Mid Caps
▫ Small Caps
▪ Industry/Sector
▫ IT, FMCG, Auto, etc.
▪ Price to Earning ratio (P/E Ratio)
▫ High P/E or Low P/E stocks
▪ Other
▫ Growth
▫ Value
▫ Cyclical
▫ Dividend Yield

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MARKET PLACE
▪ Stocks are held and traded in Demat form
▪ Tech savvy and Screen based trading
▪ Expanding product range.
▪ Advanced settlement and regulatory mechanism in place.
▪ Major Stock Exchanges are:
▫ BSE (Bombay Stock Exchange)
▫ NSE (National Stock Exchange)

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Some Indices
▪ Sensex
▫ Seen the barometer of Indian Capital Market
▫ Comprises of 30 high market cap/liquid stocks
▫ Sensex Constituents
▪ BSE -100
▫ Broad based index of 100 stocks
▫ Stocks inclusion based on market activity and industry representation
▫ BSE – 100 constituents

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Indices Continued
▪ S& P CNX Nifty
▫ Index of well diversified 50 stocks
▫ Benchmark for index funds and index based derivatives
▫ Nifty constituents

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Mutual Funds
▪ Link between investors and capital markets
▪ Pooling of money
▪ Collective savings vehicle
▪ Mitigation of risk
▪ Professional investing
▪ Constituted as a trust and issues units

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Advantages and Disadvantages of MF’s
▪ Portfolio diversification
▪ Professional management
▪ Reduction of transaction costs
▪ Liquidity
▪ Convenience and flexibility
▪ Tax advantages
▪ Well regulated
• No control over costs
• No tailor-made portfolios, but
family of schemes
• No assured returns
• Fund Manager driven
performance

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Mutual Funds Schemes
▪ By Structure
▫ Open ended funds
▫ Close ended funds
▪ By Investment Objective
▫ Growth Fund
▫ Income fund
▫ Balanced Fund
▫ Money Market Fund

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Mutual Funds Schemes
▪ Other Schemes
▫ Tax Saving Funds
▫ Special Funds
▫ Index Fund
▫ Sectoral(Sector Specific Funds)

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Mutual Funds – Charges
LOADS
Entry Loads – A charge levied on every purchase of units
Exit Loads – In order to prevent early redemption or withdrawal of units a
charge on the value of those units redeemed within the specified early
period.
Taxation-
Dividend Distribution Tax
Capital Gains Tax

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Analysis of Investment Products
Investment Return Safety Volatility Liquidity
Equity High Low High High to Low
Corporate
Debentures
Moderate Moderate Moderate Moderate
FI Bonds Moderate High Moderate Moderate
Company Fixed
Deposits
Moderate Low Low Low
Bank Deposits Low Low Low Low
PPF Moderate High Low Moderate
Mutual Funds High to Low Moderate Moderate to High High
Gold Moderate High Moderate Moderate
Real Estate High to Low Moderate High Low
Life Insurance Low to Moderate High Low Low

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Summary
The other Fixed assets that have not been discussed are tangible and
physically held or in the new era also in the form of documents.
However, the behavior of the assets remains unchanged.
The analysis is asper the table in the previous slide
For more detailed information/learning related to investments visit the
DEAL store of digital learning and choose the training of your choice.

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Thank You!
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