Introduction to Investment Strategies

📋 Course Outline

1. Investment Definition
2. Asset Allocation Strategies
3. Security Selection Process
4. Passive vs Active Management
5. Real vs Financial Assets
6. Role of Financial Markets
7. Financial Intermediaries
8. Major Asset Classes
9. Money Market Instruments
10. Capital Market Instruments
11. Bond Characteristics
12. Equity and Stock Types

📖 1. Investment Definition

🔑 Key Concepts & Definitions

• Investment: The current commitment of money or resources for a period of time to generate a future flow of funds, compensating for the time value of money, risk, and uncertainty.
• Asset Allocation: The process of choosing among broad asset classes (e.g., stocks, bonds, real estate) to optimize portfolio performance based on risk and return objectives.
• Security Selection: The process of choosing specific securities within an asset class to achieve desired investment outcomes.
• Financial Assets: Claims to income generated by real assets or claims on income from the government, representing liabilities to the issuer.
• Real Assets: Physical assets used to produce goods and services, such as real estate, machinery, and commodities.
• Investment Process: The systematic approach involving asset allocation, security selection, and portfolio management strategies (passive vs. active).

📝 Essential Points