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Personal Financial Investment

Girish Sawant

Disclosure

What is mean By

Investment

Investment
Study Mutual fund Physical exercise Life Insurance Real Estate Stock Market Job Performance

Charity

Definition
Investing is a actions to reap the benefit in future.
Financial Intellectual Mythological .so on

Financial Investments
Entering in Financial instrument to reap the benefits in the future

Saving is not investment if it is not with above intention, it is liquid asset available for investment

February 7, 2007

Behavioral Finance

is the study of how emotions and cognitive approach affects decision in financial affairs

Why to Invest - ERODING of Capital


210

Prchasing Power
190

Future Value
178
17 0 16 0 160

200
18 0

Future Cost
170 150 130 118 115 110
10 0 100 110

145 130
12 5 13 3

105

Future Value
2003 2004 2005 2006 2007 2008

90 2001 2002

Dont let it happen!!!!!!!!!!!!!!

Allocation Process Delays

Resources / Incomes
Comfort Levels / Savings

Commitments

Investment

What do you need to be successful Investor


Success in investing doesnt correlate with IQ once you are above the level of 25. Once you have ordinary intelligence, what you need is the temperament to control the urges that get other people in to trouble in investing. - Warren Buffet
It means intelligence is not directly proportional to successful investor

Wanna Challenge ???????????????


." Sir Isaac Newton, one of the world's most renowned physicists, in 1720, after he lost in stock market when the South Sea Trading Company, in which he was an investor, tanked. Many of the investors in that company were wiped out. Newton had foreseen a stock market crash and sold his shares early, for a profit of 7,000 pounds. Afterwards, however, Newton watched as the bubble kept inflating and he bought more shares. Unfortunately, he lost more than 20,000 pounds, which was a huge amount in those days.

Method of Investments
Intellectual Physical Emotional Informed

Investment Instruments

Open/Closed Ended

Type of Returns
Moveable / Immoveable

Type
Term/ Time Horizon

Liquidity Risk

Investment is a Individual plan


Investment is a Individual plan which will vary depending upon Age Liabilities Capacity to earn/ lose

Different Vehicle for Different Plan


Tractor & Truck Tractor & Truck

Distance - 800 K.m. Load 8 T

Distance - 80 K.m. Load 12 T

Priority Medium
Cost of Transportation Truck Rs.15/ KM Tractor- Rs.8/ KM Preferred Truck

Priority LOW
Cost of Transportation Truck Rs.15/ KM Tractor- Rs.8/ KM Preferred Tractor

Strategy Of Investments
Long If one were to buy an investment product and a hold it. Short - If one were to sell an investment product and then
buy it

Trading - - If one buys & then sell an investment product

Speculation Investing in expectation sporadic rise/decline in near future.


Hedging Investing using the method of buying and selling different instruments at same time to ensure profit.

Prospect Theory

Mental accounting
Prospect Theory Loss aversion/Sunk Cost Decision Paralysis Endowment effect

Informed

Challenging the Myths


I know the proper /exact value I do not want to take risk hence I kept in saving account. I am reasonably insured Equity Exposure should be ( 100- age ) %

NFO means Cheap purchase


Dividend plans are better than growth SIP is suitable for all

Plan of actions

Thank You Happy Investing

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