FINANCIAL INVESMENT LE TUAN BACH FINANCE – BANKING DEPARTMENT 06/08/2011 1 06/08/2011 2 CONTENTS NO. CONTENTS 1 INTRODUCTION TO FINANCIAL INVESTMENT 2 RETURN AND RISK 3 INTRODUCTION TO PORTFOLIO THEORY 4 SIMPLE FACTOR AND SIMPLE INDEX MODEL 5 ASSET VALUATION MODELS: CAPM & APT 6 ANALYSIS OF INFORMATION STRUCTURE ON THE FIANANCIAL MARKET 7 BOND ANALYSIS AND INVESTMENT 8 STOCK ANALYSIS AND INVESTMENT 9 INVESTMENT PORTFOLIO MANAGEMENT 10 BEHAVIORIAL FINANCE 06/08/2011 3 REFERENCES • Phan Thi Bich Nguyet – Financial Investment – Statistical Publishing House, 2005. [1] • Richard Oberuc – Dynamic Portfolio Theory and Management – McGraw-Hill 2003. [2] • Frank K. Reilly, Keith C. Brown – Investment Analysis and Portfolio Management - Holt Rinehart & Winston, 1999. [3] CHAPTER ONE: INTRODUCTION TO FINANCE 06/08/2011 4 06/08/2011 5 REAL ASSETS What are Real Assets? • A real asset is a tangible asset like gold, oil, and real estate. • It has intrinsic value due to its utility. • Its value is derived by virtue of what it represents. 06/08/2011 6 FINANCIAL ASSETS What are financial assets Financial assets include Cash, and those assets that can be converted to cash in a reasonably short period of time - one year at most, but less time in many cases. Financial assets include: • Stocks • Bonds • Rights, Options, Forwards, Futures… 06/08/2011 7 INVESTMENT AND SPECULATION Investor Speculator Relatively long, holding period of at least 1 year. Very short, holding period a few days or weeks. Moderate, rarely high risk. Very short, holding period a few days or weeks. Moderate returns at limited risk. High return at high risk exposure. Fundamental factors, careful evaluation of proposed investment. Relies on hearsay, tips and market psychology. 06/08/2011 8 THE IMPORTANCE OF INVESTMENT RESEARCH Choose the best portfolio Evaluate the probability on Stock Evaluate stock investment risks Diversification The stock market works professionally . FINANCIAL INVESMENT LE TUAN BACH FINANCE – BANKING DEPARTMENT 06/08/2011 1 06/08/2011 2 CONTENTS NO. CONTENTS 1 INTRODUCTION TO FINANCIAL INVESTMENT 2 RETURN AND. BEHAVIORIAL FINANCE 06/08/2011 3 REFERENCES • Phan Thi Bich Nguyet – Financial Investment – Statistical Publishing House, 2005. [1] • Richard Oberuc – Dynamic Portfolio Theory and Management – McGraw-Hill. utility. • Its value is derived by virtue of what it represents. 06/08/2011 6 FINANCIAL ASSETS What are financial assets Financial assets include Cash, and those assets that can be converted to