Page 121 - DMGT515_PERSONAL_FINANCIAL_PLANNING

Personal Financial Planning Mahesh Kumar Sarva, Lovely Professional University

Notes Unit 7: Investment Strategies-II

CONTENTS
Objectives
Introduction

7.1 Meaning of Investment Strategy
7.2 Types of Investment Strategies
7.3 Investment Strategy Considerations
7.4 Investment in Bonds
7.5 Investment in Stocks
7.6 Investment in Mutual Funds
7.7 Investment in Commodities

7.8 Future and Options
7.9 Summary
7.10 Keywords
7.11 Review Questions
7.12 Further Readings

Objectives

After studying this unit, you will be able to:

Learn about the various types of investment options;
Understand the process of investing in stocks and bonds;
Know about the basics of commodity market in India;

Describe the concept of future and options.
Introduction

A well-planned investment strategy is essential before having any investment decisions. A
business strategy is generally based upon long run period. Formation of business strategy is
largely dependent upon the factors such as long-term goals and risk on the investment.
As the return on investment is not always clear, so the investors prepare the strategy so as to face
the ongoing challenges in investment. A balanced investment strategy is generally required in
the process of investment, which possesses long time period and some risk tolerance.
In the case, when a strategy is aggressive the chance of attaining a higher goal is higher. An
efficient strategy can be obtained from portfolio theory, which shows good estimates on risk
and return.

7.1 Meaning of Investment Strategy

Investment Strategy is usually considered to be more of a branch of finance than economics. It
is defined as set of rules, a definite behaviour or procedure guiding an investor to choose his

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