1.
Investments Stocks & Mutual Funds

2.
What is a stock? <ul><li>Share of ownership in a company </li></ul><ul><li>It is also a security by the definition of “Securities” according to the Securities Act 1956. </li></ul>

3.
What is a stock exchange? <ul><li>A stock exchange is an organization that provides a marketplace for either physical or virtual trading shares , bonds and warrants and other financial products where investors (represented by stock brokers ) may buy and sell shares of a wide range of companies. </li></ul>

4.
Stock Exchanges in India <ul><li>NSE </li></ul><ul><li>BSE </li></ul><ul><li>Stock Exchanges in the US? </li></ul>

5.
NSE-National Stock Exchange <ul><li>More than 2000 listed stocks from different sectors. </li></ul><ul><li>Index : Nifty-comprises of 50 scripts from different sectors. </li></ul>

6.
BSE:Bombay Stock Exchange <ul><li>India’s oldest stock exchange. </li></ul><ul><li>More than 4000 listed companies from different sectors. </li></ul><ul><li>Index:Sensex – 30 scripts from different sectors. </li></ul>

7.
Basic activities in stock market <ul><li>Buying </li></ul><ul><li>Selling </li></ul><ul><li>Either buy and then sell or </li></ul><ul><li>Sell and then buy(????????????) </li></ul>

8.
What governs stock prices?? <ul><li>Like for all other commodities and resources, stock prices are determined by demand and supply. </li></ul><ul><li>When does value of a commodity </li></ul><ul><li>Increase? </li></ul><ul><li>Decrease? </li></ul>

9.
Study of price fluctuations <ul><li>Factors which govern the demand and supply of shares are studied through two ways of analysis: </li></ul><ul><li>Fundamental analysis </li></ul><ul><li>Technical analysis </li></ul>

10.
Two ways of making money <ul><li>Dividends </li></ul><ul><ul><li>Buy and keep shares </li></ul></ul><ul><ul><li>When company makes profit , divided among shareholders </li></ul></ul><ul><li>Active Trading </li></ul><ul><ul><li>Not interested in ownership </li></ul></ul><ul><ul><li>Buy and sell /sell and buy </li></ul></ul>

11.
What is an Index? <ul><li>Collection of stocks of important companies which is a measure of how the stock market is performing. </li></ul><ul><li>NSE:Nifty </li></ul><ul><li>BSE:Sensex </li></ul><ul><li>US:DJIA,S&P 500,NASDAQ composite </li></ul>

12.
Fundamental analysis <ul><li>EPS </li></ul><ul><li>PE ratio </li></ul><ul><li>P/B ratio </li></ul><ul><li>If the PE ratio of a company is less , is the stock undervalued or overvalued? Would you buy or sell the stock? </li></ul>

13.
Technical analysis <ul><li>Support levels </li></ul><ul><li>Resistance levels </li></ul><ul><li>Question: </li></ul><ul><li>If support level for NIFTY on a given day is 4000 and resistance is 4400 , when would you buy to sell and sell to buy for profit?? </li></ul>

14.
Interesting trivia(questions really!!) <ul><li>Who is known as the Oracle of Omaha and what is the name of the conglomerate holding company of which he is the chairman and CEO? (clue: 2 nd richest man in the world) </li></ul><ul><li>Who is the author of THE INTELLIGENT INVESTOR , considered the first proponent of Value Investing? </li></ul>

15.
Biggest difficulty in Stock Investing <ul><li>Requires a lot of study and analysis by the individual investor in order to secure his capital and make profit </li></ul><ul><li>What if the investor does not have the time and aptitude to study the stock market?? </li></ul><ul><li>The solution is……… </li></ul>

16.
Mutual Funds!!!!!!!!! <ul><li>Funds collected from investors are pooled together by AMCs which allocate units to investors. </li></ul><ul><li>AMCs use the pooled funds to trade in the stock market and divide the profits earned among the mutual fund investors in proportion to the units held by investors. </li></ul>

17.
Advantage of Mutual Funds <ul><li>AMCs employ Fund Managers to manage your invested funds </li></ul><ul><li>Expertise and skill of the fund manager makes a big difference because it is his job to manage funds unlike the retail investor who has his own job to contend with.. </li></ul><ul><li>Mutual fund most suitable for the common man.. </li></ul>

18.
Flowchart of mutual fund

19.
Types of mutual funds <ul><li>Based on structure </li></ul><ul><ul><li>Open ended schemes </li></ul></ul><ul><ul><li>Close ended schemes </li></ul></ul><ul><li>Based on investment objective </li></ul><ul><ul><li>Growth schemes </li></ul></ul><ul><ul><li>Income schemes </li></ul></ul><ul><ul><li>Balanced schemes </li></ul></ul>

20.
Two ways of investing in MFs <ul><li>Either as a one time outright investment or </li></ul><ul><li>Periodic investment (SIP) </li></ul>

21.
SIP <ul><li>Benefits </li></ul><ul><ul><li>Power of compounding </li></ul></ul><ul><ul><li>Rupee cost averaging </li></ul></ul><ul><ul><li>convenience </li></ul></ul>

22.
Important terms related to MFs <ul><li>NAV </li></ul><ul><ul><li>market value of the assets of the scheme minus its liabilities. </li></ul></ul><ul><li>Load </li></ul><ul><ul><li>Fee charged by AMC when an investor purchases or redeems units. </li></ul></ul>

23.
Regulatory bodies <ul><li>SEBI </li></ul><ul><ul><li>Responsible for regulating stock market in India. </li></ul></ul><ul><li>AMFI </li></ul><ul><ul><li>Trade association of MFs. </li></ul></ul>

24.
Questions again… <ul><li>DSP Merill Lynch was recently acquired by which AMC? </li></ul><ul><li>What is a ULIP? </li></ul><ul><li>Which of the following schemes is more likely to have an exit load? </li></ul><ul><ul><li>Open ended schemes </li></ul></ul><ul><ul><li>Close ended schemes </li></ul></ul>