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Dombivli Shikshan Prasarak Mandal’s
K.V. Pendharkar College of Arts, Science and Commerce
(Autonomous), Dombivli (E)
Ritika Ravindra Sonar
T.Y.B.M.S
B – 234738
Subject : Investment Analysis and Portfolio
Management
Guided by
Ms. Pranali Ma’am

2. Comparison between
investment with reference
to risk factor
RITIKA SONAR

3. INDEX
C O M PA R I SO N B E T W E E N I N V E S T M E N T W I T H R E F E R E C E T O R I S K
FAC T O R
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INTRODUCTION
CONCEPT
OBJECTIVES
ADVANTAGES AND
DISADVANTAGES
CONCLUSION

4. Introduction
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Investment is the act of allocating resources, typically money,
with the expectation of generating future returns or benefits.
It involves committing funds to assets, projects, or ventures
with the goal of increasing wealth, achieving financial
objectives, or realizing gains over time. The primary purpose
of investment is to put money to work in ways that have the
potential to yield profitable outcomes, whether through
capital appreciation, interest, dividends, rental income, or
other forms of financial gain. he process of investment
involves evaluating various opportunities, managing risk, and
making informed decisions to optimize the balance between
potential rewards and associated risks.

5. RISK AND RETURN
The level of risk that investors take on is determined by how
much money they could lose on their original investment. Risk
can refer to both the possibility of a loss and the magnitude of
that loss. For example, when an investor calls a particular
investment “high-risk,” they might mean that there is a good
chance you will lose money, that there is some chance you will
lose all of your money or both.
Your return is the amount of money you expect to get back from
an investment over the amount that you initially put in. An
investment has posted a return if it generates even a single
penny more than your initial investment. Though a return can
also refer to the amount of money lost if you express it as
negative numbers. Regardless, returns are generally expressed
as percentages of original investments.
When an investment functions well, risk and return should
highly correlate. The higher an investment’s risk, the greater its
potential returns should be. By contrast, a very safe (low-risk)
investment should generally offer low returns. This is due to
bidding mechanics in the marketplace.

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CONCEPT
1.Financial Assets:
1. Stocks: Ownership shares in companies that represent a claim on a portion of the company's assets and
earnings.
2. Bonds: Debt securities issued by governments or corporations that pay periodic interest to investors.
3. Mutual Funds: Pooled funds managed by professionals that invest in a diversified portfolio of stocks,
bonds, or other assets.
4. Exchange-Traded Funds (ETFs): Similar to mutual funds but traded on stock exchanges like individual
stocks.
2.Real Assets:
1. Real Estate: Properties such as residential, commercial, and industrial real estate that can generate rental
income and appreciate in value.
2. Commodities: Physical goods like gold, oil, agricultural products, and metals that can be traded on
commodity markets.
3.Alternative Investments:
1. Private Equity: Investments in private companies or projects with the aim of generating capital
appreciation.
2. Venture Capital: Investment in early-stage companies with high growth potential.
3. Hedge Funds: Investment funds managed by professionals that use various strategies to achieve returns,
often with a higher risk profile.

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1.Derivatives:
1. Options: Contracts that give the holder the right,
but not the obligation, to buy or sell an underlying
asset at a predetermined price within a specific
timeframe.
2. Futures: Contracts obligating the parties to buy or
sell an asset at a predetermined price on a
specified future date.
2.Personal Investments:
1. Education: Investments in education and skill
development that can lead to increased earning
potential.
2. Health and Wellness: Investments in maintaining
health, wellness, and quality of life.
3. Business Ventures: Starting or investing in a
business with the aim of generating profits and
creating value.

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Investment decisions are often made with consideration of various factors, and risk is a crucial aspect that plays a significant role
in determining the potential return and overall success of an investment. Here's a comparison between different types of
investments based on their risk factors:
1.Stocks:
1. Risk: Stocks are generally considered to have higher risk due to their volatility. The value of stocks can fluctuate
significantly in response to market conditions, economic factors, and company performance.
2. Return: Stocks have the potential for high returns over the long term, but there's also a chance of significant losses.
2.Bonds:
1. Risk: Bonds are generally less risky than stocks. They are considered safer because they represent a debt obligation of
the issuer, which means that the issuer is obligated to pay back the principal amount along with interest.
2. Return: Bonds typically offer lower returns compared to stocks, but they provide more stable income, making them
suitable for conservative investors.
3.Mutual Funds:
1. Risk: Mutual funds pool money from multiple investors to invest in a diversified portfolio of stocks, bonds, or other
assets. The risk level depends on the fund's underlying investments, but they are generally considered less risky than
investing in individual stocks.
2. Return: Mutual funds provide potential for moderate to high returns, depending on the fund's asset allocation and
management strategy.
4.Real Estate:
1. Risk: Real estate investments can vary in risk based on factors like location, market trends, and property type. Real estate
can be subject to economic fluctuations, but certain proReturns on savings accounts and certificates of deposit (CDs) are
typically lower than other investment options, making them suitable for short-term goals and emergency funds.

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1.Cryptocurrencies:
1. Risk: Cryptocurrencies are highly volatile and speculative investments. Their prices can experience rapid and extreme
fluctuations driven by market sentiment, regulatory changes, and technological developments.
2. Return: While some investors have made substantial gains in the cryptocurrency market, the risk of substantial losses
is also significant.
3. perties can provide relatively stable returns.
4. Return: Real estate investments can offer both rental income and potential property value appreciation, providing a
mix of income and capital gains.
2.Commodities:
1. Risk: Commodities, such as gold, oil, and agricultural products, can have significant price fluctuations due to supply
and demand dynamics. They are often considered riskier and can be influenced by geopolitical events.
2. Return: Commodities can provide diversification benefits and act as a hedge against inflation. However, their returns
can be unpredictable.
3.Savings Accounts and CDs:
1. Risk: These are considered low-risk investments because they are insured by government agencies up to a certain
limit. There's minimal risk of losing your principal investment.
2. Return:: While some investors have made substantial gains in the cryptocurrency market, the risk of substantial losses
is also significant

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ADVANTAGES AND DISADVANTAGES
1.Wealth Accumulation: Investments provide an avenue to grow your wealth over time, potentially allowing
you to achieve financial goals such as retirement, education, or purchasing a home.
2.Compound Interest: Through compounding, your investments can generate returns on both the initial amount
and the accumulated gains, leading to exponential growth over time.
3.Diversification: Properly diversified investments can help spread risk across different assets, reducing the
impact of poor performance in any single investment.
4.Income Generation: Certain investments, like dividend stocks, bonds, and real estate, can provide a
consistent stream of income, enhancing your cash flow.
5.Hedging Against Inflation: Some investments, such as real estate and certain stocks, have the potential to
outpace inflation, helping you maintain your purchasing power over the long term.
6.Tax Benefits: Certain investment vehicles, like retirement accounts or tax-advantaged bonds, offer tax
benefits that can help you minimize your tax liability.
ADVANTAGES OF INVESTMENTS:

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DISADVANTAGES OF INVESTMENTS:
1.Loss of Principal: All investments come with the risk of losing money, especially in higher-risk assets. Poor
investment choices or market downturns can lead to significant losses.
2.Market Volatility: The value of investments can be volatile, leading to emotional stress and potentially causing
investors to make impulsive decisions during market fluctuations.
3.Liquidity Risk: Some investments, like real estate or certain bonds, can be less liquid, meaning they can't be easily
converted to cash without incurring losses.
4.Complexity and Education: Certain investments, like derivatives or complex financial products, require a deep
understanding to make informed decisions. Lack of knowledge can lead to poor choices.
5.Time and Effort: Managing investments may require significant time and effort, especially for active trading or
monitoring of investment portfolios.
6.Fees and Costs: Investment fees, brokerage commissions, and management expenses can erode returns over time,
impacting your overall gains.
7.Lack of Guaranteed Returns: Unlike savings accounts or CDs, most investments do not guarantee returns. There's
always an element of uncertainty involved.
8.Psychological Impact: Emotional factors can impact investment decisions, potentially leading to buying high and
selling low or making decisions driven by fear or greed.
9.Regulatory Changes: Government regulations and policies can impact certain investments, leading to unexpected
changes in returns or investment strategies.

12. COMPARISON BETWEEN GROWW AND ZERODHA WITH REFERENCE TO RISK
FACTORS
Groww and Zerodha are both popular investment platforms, but they have different features and risk factors
associated with them. Here's a comparison based on key risk factors:
1.Market Risk:
1. Both platforms offer access to stocks, mutual funds, and other investment instruments, exposing users to
market fluctuations and risks.
2. Zerodha is primarily known for its trading platform, which might expose users to higher market risks due
to frequent trading and potential for losses.
2.Platform Risk:
1. Both platforms are regulated and strive to provide secure services, but there's always a risk of technical
issues, security breaches, or service interruptions.
3.Diversification:
1. Both platforms allow you to diversify your investments across different asset classes, which can help
mitigate risk.
4.Ease of Use:
1. Groww is known for its user-friendly interface, making it more accessible for beginners. However, ease
of use doesn't eliminate investment risk.

13. 1.Educational Resources:
1. Both platforms provide educational resources to help
users make informed decisions, but investment
decisions are ultimately the user's responsibility.
2.Financial Instruments:
1. Zerodha offers more complex trading options, which
can carry higher risks for inexperienced traders.
3.Fees and Costs:
1. Both platforms charge fees, but Zerodha is known
for its low-cost brokerage model. High-frequency
trading might lead to more transaction costs,
impacting overall returns.
4.Customer Support:
1. Timely customer support can be crucial in managing
investment-related issues.

14. conclusion
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investment decisions should be well-
informed and consider both potential
returns and associated risks. While
there is no one-size-fits-all
approach, a prudent investor will
assess risk factors thoroughly,
diversify their portfolio, and align
their investment choices with their
financial goals and risk tolerance.
It's important to remember that all
investments carry some level of risk,
and understanding and managing
these risks are integral to achieving
long-term financial success.

15. Thank you