Investment process

1. Investment Process
By. Gayan Nayanapriya (Chartered Accountant, B.Sc. (App Acc), MAAT)

2. Investment & Portfolio Management 2
 An investment is simply any asset into which funds can be
placed with the expectation that it will generate positive
income and/or increase its value, and
 A collection of different investments is called a portfolio.
 The rewards, or returns, from investing come in two basic
forms: income and increased value.

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 Property consists of investments in real property
or tangible personal property.
 Real property refers to land, buildings, and that
which is permanently affixed to the land.
 Tangible personal property includes items such as
gold, artwork, antiques, and other collectibles.
 Property is not as easy to buy or sell as are
securities, so we would say that property
tends to be a relatively illiquid type of
investment.

4. Investment
Debt
equity
Derivative
securities
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5.  Debt is simply a loan that obligates the borrower to make
periodic interest payments and to repay the full amount of
the loan by some future date
 Equity represents on-going ownership in a business or
property. An equity investment may be held as a security or
by title to a specific property. The most common type of
equity security is common stock.
 Derivative securities Derivative securities are neither debt
nor equity. Instead, they derive their value from an
underlying security or asset. Stock options are an example
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6. Trade-off between risk and return
 to obtain higher returns, investors usually have to accept
greater risks. Low-risk investments provide a relatively
predictable, but also relatively low, return. High-risk
investments provide much higher returns on average, but
they also have the potential for much larger losses
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7. Investment process
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