This book is a rigorous attempt to help the readers to understand the enthralling subject of portfolio management in a systematic and lucid form. Portfolio management is the art and science of making decisions about investment. It is essential for every human being to invest wisely for the rainy days and to make their future secure. One can only achieve it by understanding the theories and practices in portfolio management.
This text book is intended for the THIRD Semester students of the M.Com. (Finance and Taxation Stream) Programme (2019 Admission onwards), under the Credit and Semester System (C.S.S.), offered by the Mahatma Gandhi University, Kottayam. The book consists of five modules, which are constituted to address the investment process more proficiently. The first module is intended to make the readers able to understand the concepts of investments, different types of investments and investors, views of investment, avenues for investment, process of investment and sources of investment information. Amidst these important topics, the difference between investment, speculation and gambling are also covered in the first module.
From the first module, the foundation can be made, but the castle is yet to be built. The second module and third module help the readers to decide which securities are required to construct the portfolio, our castle. To efficiently pick a security, the investor should have the ability to assess its risk and intrinsic value. The second module helps the readers to learn how to calculate the intrinsic value of a security by keeping in mind its risk potential. The module talks about the various economical, industrial and company related factors to be assessed to determine the intrinsic value of an asset. A brief detailing of various types of risks and detailed note of bond, bond types, return calculations and other bond related terminologies are also given in this module.
In the third module, the reader can understand various theories and tools for technical analysis, which enable the investors to take investment decisions after understanding market efficiency. Traditional methods like charts, price trends and trend reversals along with modern techniques like mathematical indicators and market indicators are discussed in this module. The application of fundamental and technical analysis tools are limited to market efficiency. Therefore, different forms of market efficiency along with its measurement techniques are also included in this module.
After going through previous modules, the reader can now evoke the construction of portfolio, our castle. The fourth module helps the readers to apply modern portfolio theories and construct optimum portfolios. This module gives answers to: What role correlation plays in portfolio construction? How portfolios can be constructed? How the most efficient portfolio can be selected?, etc.
The castle is constructed. Now, you need to defend it from various threats. The fifth module teaches the readers about various techniques to evaluate and revise the portfolio so as to maintain its supremacy.
Module 1 : Investment
Module 2 : Security Analysis
Module 3 : Technical Analysis and EMH
Module 4 : Portfolio Analysis
Module 5 : Portfolio Evaluation and Revision
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