Look At Liquidity Or Marketability Finance Essay - Free Essay Example

Sample details Pages: 3 Words: 812 Downloads: 5 Date added: 2017/06/26 Category Finance Essay Type Narrative essay Did you like this example? Institutional investment is one of the investment advisor companies or Investment Company which is run by the different portfolio experts, they pool large sum of money to purpose of investing securities and also they are giving the idea where to invest, they are assurance the investor how much you will get from the investment and also Institutional investor is playing the very important role between retain investor and economic development. Those investors who dont know anything about the finance or market, institutional experts advice the investor to invest the money on different securities on that process they are charging some amount of charge. The qualities of contrary thinking, patience, composure, flexibility, and decisiveness are required to succeed in the investment game. Don’t waste time! Our writers will create an original "Look At Liquidity Or Marketability Finance Essay" essay for you Create order Institutional investors refers to investments companies, mutual funds, pension funds, foundations, sovereign wealth funds The growing influence of institutional investors has bought a transformational change in financial systems. Traditionally, these investors and, in particular, pension funds, life insurers and mutual funds that operate in retirement saving systems have been seen as sources of long term capital with investment portfolios built around the two main asset classes (bonds and equities) and an investment horizon tied to the often long-term nature of their liabilities. Institutional investors also reduce reliance on the banking system, acting as shock absorbers at times of financial distress. In addition, the growth of these institutions has contributed to the development of capital markets, providing financing to companies and governments and helping to develop mechanisms for corporate control and risk management. Raffaele Della Croce, Fiona Stewart and Juan Y ermo (2011), Promoting Longer Term Investment by Institutional Investors: Selected Issues and Policies, (24/01/2013) MOTIVES FOR INVESTMENTÂ Â The investor hasÂÂ  to set out hisÂÂ  priorities keepingÂÂ  the following motives in mind.ÂÂ  All investorswould like to have: 1.ÂÂ  CapitalÂÂ  appreciation 2. Income 3.ÂÂ  LiquidityÂÂ  orÂÂ  marketability 4.ÂÂ  SafetyÂÂ  orÂÂ  Security 5.ÂÂ  HedgeÂÂ  againstÂÂ  inflation The investor gets his incomeÂÂ  from the dividendÂÂ  or yield or interest.ÂÂ  There will be no capital appreciation also in the case of enquiries.ÂÂ  The liquidity and safety of an investment will depend upon the marketability and credit rating of the borrower, namely the company or the issuer ofÂÂ  securities.ÂÂ  These characteristics varyÂÂ  between assetsÂÂ  and securities.ÂÂ  These characteristicsÂÂ  vary between assets and securities.ÂÂ  An investor is also concerned in having a tax plan toÂÂ  reduce his tax commitments so as to maximise the take home income. ÂÂ  For this purpose, investor should specify his income bracket, his liabilities and his preference, tax planning, etc.ÂÂ  The investment avenues have certain characteristics of risk and return and also of some tax concessions attached to them. These tax provisions as such can influence the investor in a big way as these provisions will alterÂÂ  the risk return scenario of investment alternatives.ÂÂ  It isÂÂ  therefore, necessary that all these avenues should be assessed in terms of yields, capital appreciation, liquidity, safety and tax implications. https://www.scribd.com/doc/50532178/15/FACTORS-AFFECTING-INVESTMENT-DECISIONS-IN-PORTFOLIO https://sharetradingguru.blogspot.com/2011/08/portfolio-vs-age-portfolio-and-age.html Investors may be individuals and institutions. Individual investors operate alongside institutional investors in the investment arena. However, their characteristics are different. Individual investors are large in number but t heir investable resources are comparatively smaller. They generally lack the skill to carry out expensive evaluation and analysis before investing. Moreover, they do not have the time and resources to engage in such an analysis. Institutional investors, on the other hand, are the organisations with surplus funds who engage in investment activities. Mutual funds, investment companies, banking and non-banking companies, insurance corporations, etc. are the organisations with large amounts of surplus funds to be invested in various profitable avenues. These institutional investors are fewer in number compared to individual investors, but their investable resources are much larger. The institutional investors engage professional fund managers to carry out extensive analysis and evaluation of different investment opportunities. As a result their investment activity tends to be more rational and scientific. They have a better chance of maximising returns and minimising risk. The pro fessional investors and unskilled individual investors combine to make the investment arena dynamic. Investment avenues There are a large number of investment avenues for savers in Mauritius. Some of them are marketable and liquid while others are non-marketable. Some of them are highly risky while some others are almost riskless. The investor has to choose proper avenues from among them depending on his preferences, need and ability to assume risk. The investment avenues can be broadly categorised under the following heads: Corporate securities Deposits in banks and non-banking companies UTI and other mutual fund schemes Post office deposits and certificates Life insurance policies Provident fund schemes Government and semi-government securities https://books.google.mu/books?id=mINBIb5u390Cpg=PA15dq=institutional+investors/investmenthl=ensa=Xei=4AwIUa2tIMntrAfU2YDABQved=0CFYQ6AEwCA#v=onepageq=institutional%20investors%2Finvestmentf=false