“Analyzing & Evaluating investment opportunities & related factors for a new investor” Investment: An investment is the current commitment of dollars for a period of time in order to derive future payments that will compensate the investor for : • • •
The time the funds are committed The expected rate of inflation The uncertainty of the future payments
Investor The investor can be an individual, a government, a pension fund or a corporation. Investors trade with the intention to earn some future rate of return out of his investment which will provide a future stream of payments that will be greater than the current outlay. Major Factors: There are two major factors that drive the motive of investors. These are: • •
Required rate of return Risk associated with the investment
Any investor must analyze properly these two factors before investing in any sector. Investment areas: There are financial markets where all the investments take place. These markets offer different investment instruments for the investors. There are several types of markets for investment: • • • • •
Primary market Secondary Market Third Market Fourth Market Over the counter market
These markets are familiar for any kinds of investment related trading. These are the core places for any investment to take place. Types Of Investment Instruments There are basically two types of investment instruments. These are: