slide1
Download
Skip this Video
Download Presentation
Financial Investing Presentation to USF Graduate & Professional Student Council 05/21/10 Delroy M Hunter

Loading in 2 Seconds...

play fullscreen
1 / 12

Presentation to USF Graduate Professional Student Council05/21/10Delroy M Hunter - PowerPoint PPT Presentation


  • 246 Views
  • Uploaded on

Financial Investing Presentation to USF Graduate & Professional Student Council 05/21/10 Delroy M Hunter . The Investment Process. What is INVESTING? Is it different from SAVING? Saving requires the consumption of only a part of your income

loader
I am the owner, or an agent authorized to act on behalf of the owner, of the copyrighted work described.
capcha
Download Presentation

PowerPoint Slideshow about 'Presentation to USF Graduate Professional Student Council05/21/10Delroy M Hunter ' - LeeJohn


An Image/Link below is provided (as is) to download presentation

Download Policy: Content on the Website is provided to you AS IS for your information and personal use and may not be sold / licensed / shared on other websites without getting consent from its author.While downloading, if for some reason you are not able to download a presentation, the publisher may have deleted the file from their server.


- - - - - - - - - - - - - - - - - - - - - - - - - - E N D - - - - - - - - - - - - - - - - - - - - - - - - - -
Presentation Transcript
slide1
Financial Investing Presentation to USF Graduate & Professional Student Council

05/21/10

Delroy M Hunter

the investment process
The Investment Process

What is INVESTING? Is it different from SAVING?

  • Saving requires the consumption of only a part of your income
  • Investing requires a decision to allocate the savings to one or more asset classes, typically with a given objective(s) in mind
the investment process3
The Investment Process

What are the implications of “investing”?

1. Requires conscious, active (not passive) decisions

2. A crucial decision is the allocation across asset classes

3. Investing is goal oriented

essential nature of investing
Essential Nature of Investing

1. Reduce current consumption (save)

2. Invest using a two-step, “top-down” process

  • Asset allocation
  • Security selection

3. Enjoy higher (real) consumption at end of investment horizon

doing the two steps
Doing the “Two Steps”

What is Asset Allocation?

  • The process of deciding the relative proportions of the investment budget that is invested in various asset classes
  • The “top” of the “top-down” approach to investing
  • Different from security selection, which is the identification of individual securities or even sub-classes of assets, once the asset allocation decision has been made
  • Studies and life experiences show that asset allocation is the dominant determinant of an investor’s terminal wealth
allocation what allocation
ALLOCATION! What Allocation?

Essentials of Asset Allocation

  • Investor-specific – though investors can be broadly grouped and offered a similar allocation (e.g., Lifestyle Funds)
  • Is influenced by age, risk tolerance, investment objective, investment horizon
  • Not a science, although there are some “rules”:
  • e.g., % equity allocation = (100 – AGE)%
  • Should be the cornerstone of local and international DIVERSIFICATION
asset classes
Asset Classes

Main asset classes

  • Equities (stocks) – issued by private sector firms
  • Bonds (medium to long-term fixed-income securities) – issued by private and public sectors
  • Real estate (through investment companies or owner-managed)
  • Cash equivalents (short-term, fixed income securities) – issued by private and public sectors
  • Commodities (typically through investment companies)
asset classes8
Asset Classes

There is a risk-return trade-off to investing in risky securities

  • What is return?
  • What is risk?
  • Where is the trade-off?

Higher risk securities are priced to offer higher returns

investing in equities
Investing in Equities
  • Using investment companies for a fee
  • Equity mutual funds
  • Morningstar (http://screen.morningstar.com/FundSelector.html?fsection=ToolScreener)
  • Yahoo (http://www.finance.yahoo.com/funds)
  • Investment Co. Institute (http://www.ici.org/stats/index.html)
  • Exchange traded funds (http://screen.morningstar.com/ETFScreener/Selector.html)
    • SPDRS (Standard & Poors Depositary Receipts)
    • VIPERS (Vanguard Index Participation Equity Receipts)
    • DIAMONDS (DJIA index)
investing in equities10
Investing in Equities
  • Using investment companies for a fee
  • Closed end funds (http://www.cefconnect.com/Screener/FundScreener.aspx)
  • Selecting individual stocks (http://finance.yahoo.com/)
  • Beware of following the hype
  • Choose stocks that are not highly correlated
  • Limit the proportion of your portfolio invested in individual stocks
investing in fixed income
Investing in Fixed Income
  • Using investment companies for a fee
  • Bond mutual funds
  • Morningstar (http://screen.morningstar.com/FundSelector.html?fsection=ToolScreener)
    • Selecting individual bonds –
    • U.S. government bonds (http://www.treasurydirect.gov/indiv/myaccount/myaccount_treasurydirect.htm)
    • Corporate bonds (local and foreign) and foreign sovereigns

– see a broker

investing in other asset classes
Investing in Other Asset Classes
  • Using investment companies for a fee
  • Real Estate mutual funds (REITs)
  • (http://finance.yahoo.com/))
  • Money Market Funds

- through mutual fund families

  • Commodities

- through sector-focused ETFs

ad