A PROJECT REPORT ON

ANALYSIS OF FINANCIAL MARKET AND INVESTMENT OPPORTUNITY

SUBMITTED TO MAEERs MIT SCHOOL OF BUSINESS BY

MANISHA YADAV Roll no.302229 Batch No.30th Batch

IN PARTIAL FULFILLMENT OF POST GRADUATE DIPLOMA IN MANAGEMENT (PGDM) Finance August 2012-14 MAEERs MIT SCHOOL OF BUSINESS PUNE

Table of Content

Chapter No.

I 1.1 1.2 1.3 II 2.1 2.2 2.3 2.4 2.5 2.6 III IV V VI VII VIII

Title Declaration from student Certificate from Company Certificate from Guide Acknowledgement Executive Summary Introduction Company profile Objectives of the study Limitations of Study Research Methodology Primary data Secondary data Sample design Population Sample size Method of data collection Theoretical Background Data Processing and Analysis Management Lessons Findings Recommendations Conclusions Bibliography Annexure -Sample Questionnaire

Page No. 3 4 5 6 7 8 14 21 22 23 23 23 24 24 24 24 26 37 51 58 59 60 61 62

DECLARATION
I, Ms. Manisha Yadav hereby declare that this project report is the record of authentic work carried out by me during the period from -17th April 2011 to 16th June 2013 and has not been submitted to any other University or Institute for the award of any degree / diploma etc.

Manisha Yadav

Date-

ACKNOWLEDGEMENT

On the completion of this project I would like to take this opportunity as a platform to thank all the people who helped me in this work and who made this project a success.

I wish to extend my sincere gratitude to Prof. Laxman Rahalkar for providing me with all the facilities to carry on this research work efficiently.

I also extend my gratitude towards Mrs Risha Bansal for her guidance and support throughout this project. I am also thankful to them for giving their suggestions and encouragement throughout the project work and helping me continuously at each and every stage. I am also Thankful to the entire team at IndiaInfoline Ltd, for their cooperation, support and encouragement in fulfillment of this report.

Executive Summary Each investment alternative has its own strengths and weaknesses. Some options seek to achieve superior returns (like equity), but with corresponding higher risk. Other provide safety (like PPF) but at the expense of liquidity and growth. Other options such as FDs offer safety and liquidity, but at the cost of return. Mutual funds seek to combine the advantages of investing in arch of these alternatives while dispensing with the shortcomings.

Indian stock market is semi-efficient by nature and, is considered as one of the most respected stock markets, where information is quickly and widely disseminated, thereby allowing each securitys price to adjust rapidly in an unbiased manner to new information so that, it reflects the nearest investment value. And mainly after the introduction of various investments in stock market, the information flow has become much faster. But sometimes, in developing countries like India, sentiments play major role in price movements, or say, fluctuations, where investors find it difficult to predict the future with certainty. Some of the events affect economy as a whole, while some events are sector specific. Even in one particular sector, some companies or major market player are more sensitive to the event. So, the new investors taking exposure in the market should be well aware about the maximum potential loss, i.e. Value at risk. It would be good to diversify ones portfolio to include equity mutual f unds and stocks. The benefit of diversification are that while risk exposure from a particular asset may not be very high, it would also give the opportunity of participating in the party in the equity markets- which may have just begun6

in a relatively safe manner(than investing directly into stock markets). Mutual funds are one of the best options for investors to choose from. It must be realized that the performance of different funds varies time to time. Evaluation of a fund performance is meaningful when a fund has access to an array of investment products in market. An investor can choose from a variety of funds to suit his risk tolerance, investment horizon and objective. Direct investment in equity offers capital growth but at high risk and without the benefit of diversification by professional management offered by mutual funds.

INTRODUCTION

India presents a vast potential for investment and is actively encouraging the players especially entrance of foreign players into the market. India is also one of the few markets in the world which offers high prospects for growth and earning potential in all areas of business.

In the current market scenario where there is more expenditure than ones salary, inflation touching its high and fixed deposits going down day by day, thus net rate of return on the investments being below the inflation rate. To meet these growing requirements, the investors need to invest his disposable income to reap short as well as long term benefits. Those who do make diverse investments are able to squeeze maximum benefits.

The rationale behind undertaking this project is to understand the awareness and acceptance of various investment alternatives and to make a comparative study as which mode of equity investments are preferred by individuals. That is direct equity or the mutual funds.

Investment avenues in India Savings form an important part of the economy of any nation. With the savings invested in various options available to the people, the money acts as the driver for growth of the country. Indian financial scene too presents a plethora of avenues to the investors. Though certainly not the best or deepest of markets in the world, it has reasonable options for an ordinary man to
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invest his savings. Investment in equity, mutual funds, Arbritage, SIP. These are the several options which are available for the people. Promoted as the means to social development. For an ordinary person though, they have acted as the safest investment avenue wherein a person deposits money and earns interest on it.

However, today the interest rate structure in the country is headed southwards, keeping in line with global trends. With the banks offering little above 9 percent in their fixed deposits for one year, the yields have come down substantially in recent times. Add to this, the inflationary pressures in economy and one has a position where the savings are not earning. The inflation is creeping up, to almost 8 percent at times, and this means that the value of money saved goes down instead of going up. This effectively mars any chance of gaining from the investments in banks. So the banks are not only the option to invest, now a days mutual fund, equity, SIP,s are giving much more interest in compare to bank. Spread across the nation, they offer financial assistance as well as serving the basic requirements of communication. Among all saving options, Arbritage have been offering the highest rates. Added to it is the fact that the investments are safe with the company because it is handeled by Government of India entity. So, the two basic and most sought after features, such as - return safety and quantum of returns was being handsomely taken care of. Though certainly not the most efficient systems in terms of service standards and liquidity, these have still managed to attract the attention of small, retail investors. However, with the government announcing its intention of reducing the interest rates in small savings options, this avenue is expected to lose some of the investors.

In today,s world all of us want to secure our future, so for our future Financial Planning is most important, planning for the future according to our requirenment and our income is most important. Premature redemption is generally not entertained without cuts in the returns offered and though they present a reasonable option to counter interest rate risk (especially when the economy is headed for a low interest regime), the safety of principal amount has been found lacking. Many cases like the Kuber Group and DCM Group fiascoes have resulted in low confidence in this option. The options discussed above are essentially for the risk-averse, people who think of safety and then quantum of return, in that order. For the brave, it is dabbling in the stock market.

Stock markets provide an option to invest in a high risk, high return game. While the potential return is much more than 10-11 percent any of the options discussed above can generally generate, the risk is undoubtedly of the highest order. But then, the general principle of encountering greater risks and uncertainty when one seeks higher returns holds true. However, as enticing as it might appear, people generally are clueless as to how the stock market functions and in the process can endanger the hard-earned money. For those who are not adept at understanding the stock market, the task of generating superior returns at similar levels of risk is arduous to say the least. This is where investments come into picture.

Mutual Funds are essentially investment vehicles where people with similar investment objective come together to pool their money and then invest accordingly. Each unit of any scheme represents the proportion of pool owned by the unit holder (investor). Appreciation or reduction in value of
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investments is reflected in net asset value (NAV) of the concerned scheme, which is declared by the fund from time to time. Mutual fund schemes are managed by respective Asset Management Companies (AMC). Different business groups/ financial institutions/ banks have sponsored these AMCs, either alone or in collaboration with reputed international firms. Several international funds like Alliance and Templeton are also operating independently in India. Investment alternatives in India

EQUITY

INSURANCE

REAL ESTATE

PRECIOUS OBJECT

BONDS MUTUAL FUNDS

DERIVATIVES

NONMARKETABLE FINANCIAL ASSETS MONEY MARKET INSTRUMENT

Investment alternatives in India Non marketable financial assets: These are such financial assets which gives moderately high return but cannot be traded in market. Bank Deposits Post Office Schemes Company FDs PPF

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 Equity shares: These are shares of company and can be traded in secondary market. Investors get benefit by change in price of share and dividend given by companies. Equity shares represent ownership capital. As an equity shareholder, a person has an ownership stake in the company. This essentially means that the person has a residual interest in income and wealth of the company. These can be classified into following broad categories as per stock market: Blue chip shares Growth shares Income shares Cyclic shares Speculative shares Bonds: Bonds are the instruments that are considered as a relatively safer investment avenues. G sec bonds GOI relief funds Govt. agency funds PSU Bonds RBI BOND Debenture of private sector co. Money market instrument: By convention, the term "money market" refers to the market for short-term requirement and deployment of funds. Money market instruments are those instruments, which have a maturity period of less than one year. T-Bills Certificate of Deposit
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 Commercial Paper Mutual Funds- A mutual fund is a trust that pools together the savings of a number of investors who share a common financial goal. The fund manager invests this pool of money in securities, ranging from shares, debentures to money market instruments or in a mixture of equity and debt, depending upon the objective of the scheme. The different types of schemes are Balanced Funds Index Funds Sector Fund Equity Oriented Funds Life insurance: Now-a-days life insurance is also being considered as an investment avenue. Insurance premiums represent the sacrifice and the assured sum the benefit. Under it different schemes are: Endowment assurance policy Money back policy Whole life policy Term assurance policy Real estate: One of the most important assets in portfolio of investors is a residential house. In addition to a residential house, the more affluent investors are likely to be interested in the following types of real estate: Agricultural land Semi urban land
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 Farm House Precious objects: Investors can also invest in the objects which have value. These comprises of: Gold Silver Precious stones Art objects Financial Derivatives: These are such instruments which derive their value from some other underlying assets. It may be viewed as a side bet on the asset. The most important financial derivatives from the point of view of investors are: Options Futures

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COMPANY PROFILE

Introduction of company The IIFL (India Infoline) group, comprising the holding company, India Infoline Ltd and its subsidiaries, is one of the leading players in the Indian financial services space. IIFL offers advice and execution platform for the entire range of financial services covering products ranging from Equities and derivatives, Commodities, Wealth management, Asset management, Insurance, Fixed deposits, Loans, Investment Banking, GoI bonds and other small savings instruments. IIFL owns and manages the website, www.indiainfoline.com, which is one of Indias leading online destinations for personal finance, stock markets, economy and business. A network of over 2,500 business locations spread over more than 500 cities and towns across India facilitates the smooth acquisition and servicing of a large customer base. All the offices are connected with the corporate office in Mumbai with cutting edge networking technology. The group caters to a customer base of about a million customers, over a variety of mediums viz. online, over the phone and at the branches.

Products:
India Info line Pvt ltd offers the following products: A. E-broking. B. Distribution C. Insurance D. PMS E. Mortgages A. E-Broking:
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It refers to Electronic Broking of Equities, Derivatives and Commodities under the brand name of 5paisa 1. 2. 3. Equities Derivatives Commodities

B. Distribution: 1. Mutual funds 2. Government of India bonds. 3. Fixed deposits C. Insurance: 1. Life insurance policies 2. General Insurance 3. Health Insurance Policies.

Business Performance and Revenue of IIFL

IIFL has a well diversified revenue stream. Major income is earned from broking activities which contribute about 60% of revenue, followed by fund based business at 25%, distribution income at 10%, and other capital market related income at 5%. This mitigates income susceptibility to volatility in the equity markets. IIFL also provides loans against shares and the margin financing facility to its clients. The company also provides wealth management services including third party distribution such as insurance and mutual funds, and portfolio management services. Exposure to inherent uncertainties in capital market Global events like the Euro zone crisis can have an impact on Indian capital markets.
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OPPORTUNITIES FOR IIFL

Promoted by first generation professional entrepreneurs Management team unmatched in terms of professional credentials, experience as well as academic background Present at over 2,300 business locations, with over 500 own branches Effectively cover over 450 cities across India Distribution reach Uniquely placed with proprietary front, mid and back office software Effectively harnessed technology to facilitate processes and provide superior customer experience Multiple products across all segments of financial services

STRATEGY:
Focus on core competence in financial services Ensure de-risked business through multiple products and diverse revenue streams Asset-heavy or long gestation businesses through separate Jvs/group companies Drive stickiness through high quality research & service Maintain cutting-edge proprietary technology Wide, multi-modal network serving as one stop shop to customers

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Business Strategy Customer Strategy

Vision Vision of the company is, To become an integrated global financial service provider and assist our clients in long-term wealth creation through research based value addition and unbiased advice within an ethical framework..

Core Purpose No matter what the size of our client is; no matter what the market condition is; no matter what the asset nature is; we will always be driven by the sole mission for our clients that their money must grow. COMPANY VALUES Always be client centric Always be transparent Always be prudent Always be foresighted Membership and Registration National Stock Exchange (NSE) Bombay Stock Exchange (BSE) Multi Commodity Exchange (MCX)
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 National Commodities & Derivatives Exchange (NCDEX) National Multi-Commodities Exchange Of India Limited (NMCE) National Securities Depository Limited (NSDL) Central Depository Services Limited (CDSL)

GLOBAL PRESENCE
Globe Capital Market Ltd along with India has its office at UK, USA, HONGKONG,SINGAPUR, GENEVA, MAURITIUS, SRI LANKA and DUBAI as well.

Industry profile
Stock Industry: There are 22 stock exchanges in India, the first being the Bombay Stock Exchange (BSE), which began formal trading in 1875, making it one of the oldest in Asia. Over the last few years, there has been rapid change in the Indian securities market, especially in the secondary market. Advanced technology and online-based transactions have modernized the stock exchanges. In terms of the number of companies listed and total market capitalization, the Indian equity market is considered large relative to the

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countrys stage of economic development. The number of listed companies increased from 5,968 in March 1990 to about 10,000 by May 1998 and market capitalization has grown almost 11 times during the same period

Role of share market business in Indian economy: Stock exchanges have multiple roles in Indian economy. This may include the following: Raising capital for businesses Mobilizing savings for investment Facilitating company growth Profit sharing Corporate governance Creating investment opportunities for small investors Government capital-raising for development projects Barometer of the economy Due to these reason, Indian economy is booming in Current Scenario.

Globe capital market Ltd. in Stock Industry:

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 Globe capital market Ltd is holding 2nd position in Clearing House. It also has huge number of clients who daily transit in Stock market, Derivative market, and also in Commodity market. There are many Sub-brokers who are under Globe capital market Ltd. There are many Branches of the Firm which provide services to their clients

Product profile

GLOBE CAPITAL MARKET Ltd provides end to equity solutions to all categories of its valued clients by using a combination of its numerous products and services. It offers you world-class research-based investment and trading ideas coupled with efficient and reliable trade execution & settlement. Its default free record since inception is a unique and exceptional feature in the Indian Stock Markets. GLOBE CAPITAL MARKET Ltd understands the Client profile and uses a combination of the following products and services to look after various client needs.

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End to equity solutions: Advice-based broking on BSE / NSE (cash & derivatives) Portfolio Management Services (PMS) Internet Trading Timely & Researched investment and Trading Ideas Depository Services (MODES) Equity Advisory Group 1. Trading PMS: The scheme takes a professional and disciplined approach to trading. The philosophy is to treat market trend as a friend and generate decent returns for the clients. This is a high risk high return scheme 2. Depository Services: It is an investor friendly proactive demat service which the company provides. Globe Capital Market Ltd. is a Depository Participant of Central Depository Services (I) Ltd. (CDSL) and National Securities Depository Ltd(NSDL).

OBJECTIVES:

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 To look at the investment pattern which are available in the market, and make people aware of the investment pattern. Study of financial market and various investment opportunity. The main objective of my project is to analyze financial market and investment opportunities available, where lay men can invest his/her savings, so that he will generate maximum wealth for a secured present and future, where an individual spend his monthly earnings and what the amount left for investing their savings. The Investment Options are endless, but for my project I studied financial market and investment options to draw the conclusion on making a right portfolio considering these investment opportunities. According to my view The one who can invest intelligently can enjoy returns accordingly considering his desire

ANALYSIS OF FINANCIAL MARKET

A financial market is a market in which people and entities can trade financial securities, commodities, and other fungible items of value at low transaction cost and at prices that reflect supply and demand. Securities include stocks and bonds, and commodities include precious metals or agricultural goods. There are both general markets (where many commodities are traded) and specialized markets (where only one commodity is traded). Markets work by placing many interested buyers and sellers, including households, firms, and government agencies, in one "place", thus making it easier for them to find each other. An economy which relies primarily on interactions between buyers and sellers to allocate resources is known as a market economy in
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contrast either to command economy or to a non- market economy such as a gift economy. In finance, financial markets facilitate: The raising of capital (in the capital market) The transfer of risk (in the derivatives market) Price discovery Global transactions with integration of financial markets The transfer of liquidity (in the money market) International trade (in the currency market) and are used to match those who want capital to those who have it. Typically a borrower issues a receipt to the lender promising to pay back the capital. These receipts are securities which may be freely bought or sold. In return for lending money to the borrower, the lender will expect some compensation in the form of interest or dividends This return on investment is a necessary part of markets to ensure that funds are supplied to them. Types of financial markets Within the financial sector, the term "financial markets" is often used to refer just to the markets that are used to raise finance: for long term finance, the Capital markets; for short term finance, the Money markets. Another common use of the term is as a catchall for all the markets in the financial sector, as per examples in the breakdown below. Capital market which consist of: Stock market, which provide financing through the issuance of shares or common stock, and enable the subsequent trading thereof. Bond market, which provide financing through the issuance of bonds, and enable the subsequent trading thereof. Commodity market, which facilitate the trading of commodities. Money market, which provide short term debt financing and investment. Derivatives market, which provide instruments for the management of financial risk.
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Futures market, which provide standardized forward contacts for trading products at some future date; see also forward market. Insurance market, which facilitate the redistribution of various risks. Foreign exchange market, which facilitate the trading of foreign exchange. The capital market may also be divided into primary markets and secondary market. Newly formed (issued) securities are bought or sold in primary markets, such as during initial public offering. Secondary markets allow investors to buy and sell existing securities. The transactions in primary markets exist between issuers and investors, while in secondary market transactions exist among investors. Liquidity is a crucial aspect of securities that are traded in secondary markets. Liquidity refers to the ease with which a security can be sold without a loss of value. Securities with an active secondary market mean that there are many buyers and sellers at a given point in time. Investors benefit from liquid securities because they can sell their assets whenever they want; an illiquid security may force the seller to get rid of their asset at a large discount. The financial market is broadly divided into 2 types: 1) Capital Market and 2) Money market. The Capital market is subdivided into 1) Primary market and 2) Secondary market.

Capital market

The trading floor of the New York Stock Exchange, one of the largest secondary capital markets in the world. As of 2013, most of the NYSE's

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trades are executed electronically, but its hybrid structure allows some trading to be done face to face on the floor. CAPITAL MARKET: Capital market are financial markets for the buying and selling of longterm debt- or equity-backed securities. These markets channel the wealth of savers to those who can put it to long-term productive use, such as companies or governments making long-term investments. Financial regulators, such as the UK's Bank of England(BoE) or the US securities and exchange Commission (SEC), oversee the capital markets in their jurisdictions to protect investors against fraud, among other duties. Modern capital markets are almost invariably hosted on computerbased electronic trading systems; most can be accessed only by entities within the financial sector or the treasury departments of governments and corporations, but some can be accessed directly by the public. There are many thousands of such systems, most serving only small parts of the overall capital markets. Entities hosting the systems include stock exchanges, investment banks, and government departments. Physically the systems are hosted all over the world, though they tend to be concentrated in financial centres like London, New York, and Hong Kong. Capital markets are defined as markets in which money is provided for periods longer than a year. A key division within the capital markets is between the primary markets and secondary markets. In primary markets, new stock or bond issues are sold to investors, often via a mechanism known as underwriting. The main entities seeking to raise long-term funds on the primary capital markets are governments (which may be municipal, local or national) and business enterprises (companies). Governments tend to issue only bonds, whereas companies often issue either equity or bonds. The main entities purchasing the bonds or stock include pension funds, hedge funds, sovereign wealth funds, and less commonly wealthy individuals and investment banks trading on their own behalf . In the secondary markets, existing securities are sold and bought among investors or traders, usually on an exchange, over-the-counter, or elsewhere.
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The existence of secondary markets increases the willingness of investors in primary markets, as they know they are likely to be able to swiftly cash out their investments if the need arises.

MONEY MARKET:
As money became a commodity, the money market became a component of the financial markets for assets involved in short-term borrowing, lending buying and selling with original maturities of one year or less. Trading in the money markets is done over the counter and is wholesale. Various instruments exist, such as Treasury bills, commercial paper, bankers' acceptances, deposits, certificates of deposit, bills of exchange, repurchase agreements, federal funds, and short-lived mortgage-, and asset-backed securities. It provides liquidity funding for the global financial system. Money markets and capital markets are parts of financial markets. The instruments bear differing maturities, currencies, credit risks, and structure. Therefore they may be used to distribute the exposure. The derivatives market is the financial market for derivatives, financial instruments like futures contracts or options, which are derived from other forms of assets. The market can be divided into two, that for exchange-traded derivatives and that for over-the-counter derivatives. The legal nature of these products is very different as well as the way they are traded, though many market participants are active in both.

Equity markets: A market where ownership of securities are issued and subscribed is known as equity market. An example of a secondary equity market for shares is the Bombay stock exchange. Debt market: The market where funds are borrowed and lent is known as debt market. Arrangements are made in such a way that the borrowers agree to pay the lender the original amount of the loan plus some specified amount of interest.
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Depository markets: A depository market consist of depository institutions that accept deposit from individuals and firms and uses these funds to participate in the debt market, by giving loans or purchasing other debt instruments such as treasure bills. Non-Depository market: Non-depository market carry out various functions in financial markets ranging from financial intermediary to selling, insurance etc. The various constituency in non-depositary markets are mutual funds, insurance companies, pension funds, brokerage firms etc.

LIMITATION OF THE STUDY-

Following are the limitations of the project that has been felt during the project: Retrieving the correct data-Some people may provide false data, as they were scared providing the actual data. Assumptions-Study is based on the assumption that respondents were truthful in contributing the data. Feedback-The feedback and comments received from the individuals is according to their perception, limited exposure and personal knowledge level. Some of the information were kept confidential and was not disclosed to any person whosoever

The main problem was time constraint.

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CHAPTER 2

Scope of the study

Geographical scope The data for the research was collected from the present and potential customers.

Product scope

The research was conducted to find out about the preference of the target population for Equity Diversified Mutual Funds and Direct Equity. Besides this the research was conducted to know about reasons for preferring mutual funds and direct equity funds.

Data Collection

1. Secondary Data

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Secondary data was collected from various sources such as internet and financial magazines.

2. Primary Data

In Primary data, structured questionnaire was made and the target respondents were asked to fill the questionnaire.

Sampling Sample Framework The sample framework consists of a people who have invested in any funds or investment schemes. Sample Design The sample was taken using convenient sampling.

1. Target Population

The target population mainly included service class people. Hence convenient sampling was used in deciding on the target population. Sample size The sample size was around 50 respondents.

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Method of data collection For the purpose of primary data collection the target population was administered with a questionnaire which had both structured as well as unstructured questions

Research Design First an exploratory research was conducted to get some insights about the topic. Secondary data analysis was performed. It was followed by questionnaire filling. Findings of the exploratory research were regarded as input to further research. This research will be followed by descriptive design.

Questionnaire Design

Objective was to make respondents little familiar with the context of the questions. This was also aimed at collecting data about the sample profile thatll be subsequently analyzed so that the scope of the project is fully explored.

Question 1 was aimed to check the awareness level of the respondent about various investment avenues. Question 2 was an open ended question intended to find out some more factors which people consider important while investing.

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Question 3 was aimed to understand the most preferred mode of investment. Question 4 was designed to understand the types of investments where people have invested. Question 5 was designed to understand the importance of past returns in making decisions about various investment schemes. Question 6 was designed to understand if returns were the only criteria for evaluating the performance. Question 7 was designed to understand the approach of people in making investment. Question 8 was designed to find out what factors are considered important by people who invest different investments. Question 9 was formulated to know the period of portfolio review done by people. Question 10 was put to find out the long term and short term investors. Question 11 was asked to find out how actively investors change their portfolio. Question 12 was asked to compare the equity diversified mutual funds and direct equity. Question 13 & 15 were asked to judge the factors why people prefer to invest in stocks aur want to do financial planning. Question 14 was asked to find out the availability of information sources for various schemes.

THEORETICAL BACKGROUND
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various investment available in india

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 Short term investment

Saving bank account Money market funds Bank fixed deposite

Long term investments

Post office saving Public provident fund Company fixed deposite Bonds and debentures mutual fund life insurance policy equity shares

let us see these investments in brief:

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saving bank account: Often the first banking product people use, savings accounts offer low interest (4%-5% p.a.), making them only marginally better than safe deposit lockers.

Money Market Funds (also known as liquid funds) Offer better returns than savings account without compromising liquidity Money market funds are a specialized form of mutual funds that invest in extremely short-term fixed income instruments. Unlike most mutual funds, money market funds are primarily oriented towards protecting your capital and then, aim to maximise returns. Money market funds usually yield better returns than savings accounts, but lower than bank fixed deposits. With the flexibility to issue cheques from a money market fund account now available, explore this option before putting your money in a savings account.

Bank fixed deposite: Also referred to as term deposits, this product would be offered by all banks. Minimum investment period for bank FDs is 30 days. The ideal investment time for bank FDs is 6 to 12 months as normally interest on bank less than 6 months bank FDs is likely to be lower than money market fund return. It is important to plan your investment time frame while investing in this instrument because early withdrawals typically carry a penalty. . Post Office Savings Schemes (POSS) Low risk and no TDS POSS are popular because they typically yield a higher return than bank FDs. The monthly income plan could suit you if you are a retired individual
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or have regular income needs. Besides the low (Government) risk, the fact that there is no tax deducted at source (TDS) in a POSS is amongst the key attractive features. The Post Office offers various schemes that include National Savings Certificates (NSC), National Savings Scheme(NSS), Kisan Vikas Patra, Monthly Income Scheme and Recurring Deposit Scheme.

Public Provident Fund (PPF) Best fixed-income investment for high tax payers PPF is a very attractive fixed income investment option for small investors primarily because of 1. An 11% post-tax return - effective pre-tax rate of 15.7% assuming a 30% tax rate 2. A tax-rebate - deduction of 20% of the amount invested from your tax liability for the year, subject to a maximum Rs60,000 for a tax rebate 3. Low risk - risk attached is Government risk So, what's the catch? Lack of liquidity is a big negative. You can withdraw your investment made in Year 1 only in Year 7 (although there are some loan options that begin earlier). If you are willing to live with poor liquidity, you should invest as much as you can in this scheme before looking for other fixed income investment options. Company Fixed Deposits (FDs)

FDs are instruments used by companies to borrow from small investors. Typically FDs are open throughout the year. Invest in FDs only if you have surplus funds for more than 12 months. Select your investment period carefully as most FDs are not encashable prior to their maturity. Just as in any other instrument, risk is an embedded feature of FDs, more so because it is not mandatory for non-finance companies to get a credit rating
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for this instrument. Investors should consciously (either though a credit rating or through an expert) select the companies they invest in. Quite a few small investors have lost their life's savings by investing in FDs issued by companies that have run into financial problems. Bonds and Debentures

Besides company FDs, bonds and debentures are the other fixed-income instruments issued by companies. As a result of an illiquid secondary market and a lack-lustre primary market, investment in these instruments is largely skewed towards issues from financial institutions. While you might find some high-yielding options in the secondary market, if you do not want the problems associated with bad deliveries and the transfer process or you want to invest a large sum of money, the primary market is the better option.

Mutual Funds

Have you ever made an investment in partnership with someone else? Well, mutual funds work on more or less the same principles. Investors pool together their money to buy stocks, bonds, or any other investments. Investing through mutual funds allows an investor to 1. Avail the services of a professional money manager (who manages the mutual fund) 2. Access a diversified portfolio despite making a limited investment Our primer Investing in Mutual Funds should educate you a lot more on the benefits of investing in mutual funds and strategies you could employ. Life Insurance Policies

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Life insurance premiums, depending upon the policy selected, include the costs of 1) death-benefit coverage 2) built-in investment returns (average 8.0% to 9.5% post-tax) 3) significant overheads, including commissions. This implies that if you buy insurance solely as an investment, you are incurring costs that you would not incur in alternate investment options. It is, however, important to insure your life if your financial needs and profile so require. Use our Are You Adequately Insured planning tool to find out if you need life insurance, and if yes, how much. Equity Shares Maximum returns over the long-term, invest funds you do not need for at least five years There are two ways in which you can invest in equities1. through the secondary market (by buying shares that are listed on the stock exchanges) 2. through the primary market (by applying for shares that are offered to the public) Over the long term, equity shares have offered the maximum return to investors. As an investment option, investing in equity shares is also perceived to carry a high level of risk. Learn more about building an equity portfolio in Investing in Equities

LET US KNOW ABOUT THE FINANCIAL PLANNING, WHICH IS THE CHUNCK OF ALL INVESTMENTS. FINANCIAL PLANNING:

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in general usage, a financial plan is a series of steps or goals used by an individual or business, the progressive and cumulative attainment of which are designed to accomplish a financial goal or set of circumstances, e.g. elimination of debt, retirement preparedness, etc. This often includes a budget which organizes an individual's finances and sometimes includes a series of steps or specific goals for spending and saving future income. This plan allocates future income to various types of expenses, such as rent or utilities, and also reserves some income for short-term and long-term savings. A financial plan is sometimes referred to as an investment plan, but in personal finance a financial plan can focus on other specific areas such as risk management, estates, college, or retirement. You can also prepare a Financial Plan using a comprehensive software that provides what if financial scenarios to help you plan your financial future.
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Issues of Definition Textbooks used in colleges offering financial planning-related courses also generally do not define the term 'financial plan'. For example, Sid Mittra, Anandi P. Sahu, and Robert A Crane, authors of Practicing Financial Planning for Professionals do not define what a financial plan is, but merely defer to the Certified Financial Planner Board of Standards' definition of 'financial planning'. Because of the lack of a formal definition in industry literature, and in major textbooks on the subject, the term 'financial plan' is merely inferred from the defined process of 'financial planning'. Financial planning is not being done without financial planner, they play a wide role. A financial planner or personal financial planner is a practicing professional who prepares financial plans for people covering various aspects of personal finance which includes: cash flow management, education planning, retirement planning, investment planning, risk management and insurance planning, tax planning, estate planning and business succession planning (for business owners). The work engaged in by this professional is commonly known as personal financial planning. In carrying out the planning function, s/he is guided by the financial planning process to create a financial plan; a detailed strategy tailored to a client's specific situation, for meeting a client's specific goals. The key defining aspect of what the financial planner does is that he considers all questions, information and advice as it impacts and is impacted by the entire financial and life situation of the client.

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INCEPTION OF FINANCIAL PLANNING IN INDIA

Financial Planning Standards Board (FPSB) India is an Indian company that deals with setting professional standards based in Mumbai Its mission is to develop and promote financial standards to benefit and protect the entire nation as a whole. FPSB India works closely with nearly all aspects of the Indian economy. As a professional membership & certification firm, it is part of a global organization to establish beneficial and universal standards for financial planning in India and works with prominent financial service corporations. As a Self-Regulatory Organization, FPSB India promotes and maintains higher standards of professionalism than required and seeks to cooperate with the government and regulation agencies to uniformly regulate personal Financial Planning practitioners. FPSB India holds itself to a higher virtue through its code of ethics & rules of professional conduct, which is mandated for all members and is licensed for CFP through its affiliate agreement with FPSB Denver, USA. Other peer countries are Australia, Austria, Belgium, Brazil, Canada, China, China Taipei, France, Germany, Hong Kong, Indonesia, Japan, Malaysia, New Zealand, Republic of Korea, Singapore, South Africa, Switzerland, United Kingdom and the United States There is a push for establishing international financial standards, increase financial literacy, and create a suitable redressal mechanism for the investors in India to improve development and financial health in the country. Other financial services firms from around the world have this as a goal as well, as it effects overall economic health of a nation and credibility of specific institutions. Many leading financial services firms are coming together and attempting to professionalize the industry by setting international standards. Currently over 200 firms in 20 countries are aiming towards this objective. THE BENEFITS OF FINANCIAL PLANNING: The complete picture:
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Financial Planning helps you compile a complete financial picture and determine your objectives. When a doctor is consulted, he usually begins by referring to a complete medical history. A Financial Planner, also a general practitioner, similarly completes a comprehensive and confidential financial analysis. It helps you understand how each financial decision affects your life goals.

Analyzes every aspect of your current financial situation Your financial situation has many aspects (assets, income, loans, insurance, taxes, business interests, wills, to name a few) which will benefit from the careful scrutiny of a trained professional who will analyze them in light of your objectives as well as the current legal, tax and economic environments.

Identify weaknesses and recommend improvements The objective of Financial Planning is to help you make best use of every rupee by designing a strategy which will overcome any weaknesses in the management of your affairs and provide specific recommendations to help you achieve your financial objectives.

Reduced Stress The unknowns and fears cause stress. By prudent financial planning you know exactly what your money is doing. This knowledge and understanding helps you feel more secure and less stressed.

CAN YOU DO YOUR OWN FINANCIAL PLANNING?

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There are a number of books, magazines or software packages which can help you do your own financial planning. The internet offers a host of shareware software, which claim to do financial planning. But how good this software is can be determined only by trial and error.

You should aim to do your own financial planning only if you have the time and the requisite knowledge to do so. If you are very keen to do-it-yourself, you can have a financial planner take a look at the final plan. He may be able to suggest improvements, point out grave mistakes or tell you that it is a good plan

HOW TO MAKE FINANCIAL PLANNING WORK FOR YOU?

Set realistic goals. Set realistic goals. Set specific targets of what you want to achieve and when you want to achieve results. Be quantitative wherever possible. You may dream of your goals but be in touch with ground reality. Not all can be a Rockefeller. Understand Risk and Return. Understand that there is no free lunch. Risk and return are interrelated. Set reasonable objectives. Do not expect high yield investments not to carry any additional risk, they usually do. Most people underestimate the stress of a high-risk plan on its way down. In most cases its better to be safe than sorry.

Review your Plans.

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Once the plan has been implemented, it requires a periodic review. This is imperative to adjust the plan to the changing situation in one's life, financial situation and income levels. Start Early in Life. There is a myth that financial planning is for the elderly. The earlier you start financial planning the better of you will be in achieving your life's goals. It's more advantageous to save small amounts of money at a younger age than to wait till one is much older to save large sums. Execute the Plan on time. Financial planning is a perishable commodity. What is available today may be gone tomorrow. Speed and timeliness of execution makes the difference between a millionaire and an average performer. If you have doubts about your ability to execute the plan in a timely manner request your financial planner to do it for you.

Types of schemes for investment in mutual fund

Open ended schemes An open-end fund is one that is available for subscription all through the year. This type of Mutual funds does not have a predefined maturity period. The key feature is liquidity. Direct dealing is another noticeable feature. One can easily buy and sell units at Net Asset Value related prices. Close ended schemes

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Here maturity period is predefined usually ranging from 2 to 15 years. Investment can be done directly in the scheme at the time of the initial issue and units can be brought and sold whenever units are listed in the stock exchanges.

1. Equity/growth oriented Funds: Equity schemes are those that invest predominantly in equity shares of companies. An equity scheme seeks to provide returns by way of capital appreciation. As a class of assets, equities are subject to greater fluctuations. Hence, the NAVs of these schemes will also fluctuate frequently. Equity schemes are more volatile, but offer better returns.

2. Balanced Funds: The aim of balanced funds is to provide both growth and regular income. Such schemes periodically distribute a part of their earning and invest both in equities and fixed income securities in the proportion indicated in their offer documents.

3. Index Funds: An Index Fund is a mutual fund that tries to mirror a market index, like Nifty or BSE Sensex , as closely as possible by investing in all the stocks that comprise that index in proportions equal to the weight age of those stocks in the index.

4. Income/debt oriented Funds: These schemes invest mainly in income-bearing instruments like bonds, debentures, government securities, commercial paper, etc. These instruments are much less
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volatile than equity schemes. Their volatility depends essentially on the health of the economy e.g., rupee depreciation, fiscal deficit, inflationary pressure. Performance of such schemes also depends on bond ratings. Mutual fund is also the gud investment option available in the market

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DATA PROCESSING AND ANALYSIS INVESTOR SURVEY ANALYSIS To understand the investors preference following questions have been asked:

1. Investment avenues you are aware of:

Investment avenues you are aware of

Bonds Bank FDs Mutual Funds (Equity/Debt) Direct Equity Bullion

40 30 Respondents 20 10 0 investment avenues

Gilts Real estate

FINDINGS Most of the people are aware of Banks and Direct Equity investments. Financial planning and investment in stocks are being considered an attractive investment opportunity by the investors. However, awareness about FDs and Gilts is low comparatively.

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2. Factors considered while investing People gave several different answers as it was an open ended question As liquidity, attractiveness, growth of industry (in case of shares), return, Risk, etc.

3. Your portfolio includes majority of:

Portfolio includes majority of

12 10 8 6 Respondents 4 2 0 Investment Avenues

Govt. securities And bonds Equity linked Mutual Funds Real estate Bullions Equity shares Commodity F.Ds

FINDINGS-

This question gave an insight into the type of investors.

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 Most people prefer to invest in Bullions and Government securities and Bonds due to less risk factor associated with these investments. Financial planning which includes all the investment options, people who have knowledge about this, is prefer to make financial planning.

1) Past returns as a good measure of performance :

Past returns as a good measure of performance

27%

73%

yes

no

FINDINGS-

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The majority of the investors consider returns as a good measure of performance evaluation. However, whether the investors consider returns to be a sufficient criterion or not would be shown in the following graph:

6. Past returns as the only measure of performance:

Past returns as the only measure for performance evaluation

44%

56%

yes

no

FINDINGS-

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i.

It is indicated that a majority of the individuals consider returns to be the only criteria to judge a funds performance.

ii.

This suggests that most of them do not use any other measures like adjusted returns .

7. Approach in making Investment

23% 39% You take books and news paper help You take friendly advice and make decision You rely totally on your investment advisor

38%

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FINDINGS-

Out of 50 people surveyed, approximately 39% of investors rely totally on investment advisors, 38% prefers to take friendly advice and 23% take educated view on investments for investing in the various funds.

8. While investing, you are more concerned about:

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While investing, you are concerned with :

38%

42% Safety of principal Earning interests above the inflation rate Earning high returns

20%

FINDINGS-

Before investing, one needs to be sure of the safety, risk attached with the particular investments and the returns earned. 42% of the people were more concerned about the safety of principle 38% people were more interested in earning higher returns.

9. How often do you monitor your portfolio?

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FINDINGSOut of 50 people surveyed, approximately 32% of investors monitor their investment daily; 24% monitors twice a month and only 8% of the respondents monitor their portfolio after more than a month.

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10. How long do you invest?

FINDINGS-

It was really a tough choice for investors as many of the respondents were not sure about their investment tenure. About 50% of them agreed that they like to book the profit as and when they reach the targeted return. Only 4% agreed that they are very long term player and dont change the portfolio often. Around 12% told, they like to book their portfolio within 3-5 years, 20% were those who were mid-term player. Surprisingly, only 16% turned out to be short- term player.

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11. How your portfolio allocation has changed over the time

FINDINGSOut of 50 people surveyed, 70% of the respondents said that they have made significant changes in their portfolio,
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 while 26% have changed their portfolio and Rest (4%) didnt change their portfolio at all.

MANAGEMENT LESSONS

1. THINK BIG BUT DONT HESITATE TO START SMALL. This is the best part of my experience during my whole internship. I got to learn this from Yogesh Ray, Vice President, Globe Capital Market Ltd. He started his life as an agent working on commission in brokerage house and used to earn around rs 3000/month and after working hard for 8 years he is now earning in lakhs. He said if you want to achieve something big in life, dont hesitate to start small if it is of your interest.

2. HELP EVERYONE AROUND YOU. I got to learn this from one of the relationship manager working there. He always used to help others to learn things. He was not my external guide although he used to call me and other interns to teach us. Even he was always ready to help others working there. Because of this everyone used to respect him and ready to work for him.

3. TRUST YOUR ABILITY One day my project guide told me to do phone calling in order to convince customer for trading and investment. He gave me the list of telephone numbers. I started calling but most of the numbers were
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wrong and others were not listening also. Some abused me too. But I was sure that if 10 customers listen to me for 2 minute each, I have the ability to convert 2 of them. And I converted two clients within 3 days

4. GET INVOLVED I observed in the office that those who get involved in different discussion and sociable get much better response than those who do not. Involvements in various activities also help us to know people around us better and help in learning many things

. 5. ALWAYS SHARE YOUR KNOWLEDGE Sharing of knowledge is very important. If you share your knowledge and views with other people, other will get benefit from that and you will also learn it better when other gives their point of view. Two way communication process will help us to improve our knowledge and understanding . 6. DONT HESITATE TO ASK I felt while working that it is always good to ask when you are in doubt because it gives clear indication to other that what he has communicated has not received by you correctly. One day our Branch
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manager was taking class on derivatives and he asked to everyone that what he taught was understood by all or not? Everybody replied yes and he suddenly asks one question from one of the interns. He could not answer and it gave a negative perception of him in the mind of manger. So it feels good to everyone when you ask about the doubt you have then and there.

7. LISTEN TO OTHERS Always try to be a good speaker. But a good speaker is not sufficient. In order to manage properly you have to listen to the people around you. It gives a sense of belongingness to the other person when you listen to him. Maybe you are correct but always listen and respect the views of others. They will always respect your views.

8. RESPECT YOUR SENIORS During internship I learned that those people who respect their seniors always get respect from seniors. I have seen that many a times a senior is wrong and a junior is right then also junior says nothing in front of senior or tries to explain things in sophisticated manner

9. BE FRIENDLY WITH BOSS Dont be afraid of your boss. Always be friendly with him. He will like it.

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Being friendly does not mean that you should talk loudly or arrogantly to him. It means you should not hesitate in speaking to him.

10.MOTIVATE AND GET MOTIVATED I felt that people who motivate others get motivated themselves. Sir used to motivate us by giving us treat when we did a good job. This motivates other also to do their job properly.

11.ALWAYS DRESS WELL This is very much important. I felt in office that those who were dressed well used to give other some kind of positive energy to others. I myself felt that when you are dressed well it gives you a kind of confidence and energy to do your job. Moreover when we are dressed well it gives a good impression to other people may it be your boss, juniors or customers.

12.STRESS MANAGEMENT This is really awesome. I have seen while working in stock brokerage firm that there is lot of stress on relationship managers when they do trading of clients. Some moves of market make them loose their nerves. But overall they are

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able to manage that stress as stress management is the biggest management in stock market.

13.CUSTOMER IS THE BOSS Customer is the boss of your business. Therefore always be honest to him. If you have made a mistake, tell him before he get to know from others so that he always trust you. Losing one customer can lead to loss of 5 more and gaining one customer can lead to gain of 5 more.

14.BE CALM AND POLITE Always be polite while talking. It gives a positive sign to others that you are capable of managing things correctly. Moreover in stress you can work more efficiently when you stay calm.

15.COMMITMENT Commitment toward your work is the need of the hour because when you are committed to work, there are more chances of doing it right.

16.TEAMWORK You cannot push a truck alone but with team yes you can. There are some tasks which cannot be performed alone as it takes more time and is prone to more errors. Working with others needs different qualities than working alone. A good team player can always be a good manager.

17.GIVE YOUR 100%

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Always give your 100% to whatever you do. It helps you to achieve more in your life. Maybe there is a situation where you gave your 100% but still not able to achieve the goal. In this case your boss will always appreciate and motivate you because he has seen your efforts . 18.IMPORTANCE OF COMMUNICATION SKILLS I have seen people in office who has very much knowledge but are not able to express it or when they express other person may not be able to interpret it well. This is because of poor communication skills. Knowledge is useful when others can gain from it.

19.SEEK PARTICIPATION FROM JUNIORS Always encourage your juniors to participate in different activities like management discussions about new plans, improving previous plans, etc. This will motivate them and makes them feel connected with the organization. On the other hand it provides senior management with the thoughts and problem solving skills of juniors.

20.PLANNING Always plan what you have to do on daily basis. It gives you better direction to achieve your planned goals. Planning gives us the right direction from where we have to start our work. Planning saves almost 30% of the time in doing work.

21.CONTROLLING

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Proper control is necessary in order to see that things are going in right direction or not. If not proper measures needs to be adopted in order to improve that.

22.TAKE OR GIVE FEEDBACK Taking and giving feedback is very important. It help us to know how our juniors are working and helps to give them suggestion or direction if needed. Moreover taking and giving feedback helps to maintain free flow of information through different levels of hierarchy.

23.ALWAYS BE GOAL ORIENTED Always work keeping in mind what you want to achieve from doing that work. Set your goals and work in order to achieve them.

24.NEVER ARGUE Do not argue with anybody in organization. It gives a negative impression in the mind of others. Having healthy discussion is always good but never argues while discussing. Always have open mind and listen to others point of view.

25.LEARN FROM MISTAKES

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To err is human nature but always try to learn from your past mistakes. It helps you to improve nature and performance both.

26.CELEBRATE ACHIEVEMENT Work hard party harder. Always celebrate your achievement. It gives you a positive feeling when you get success. It helps you to do better in future also.

27.DELEGATION OF AUTHORITY When you give responsibility to someone you have to give him some authority in order to fulfil those responsibilities.

28.BE EMPATHETIC Always try to think from others perspective. It helps you to know people around you and make good relation with them. As a manager you always need to think differently.

29.GREET YOUR SENIORS AND COLLEAGUES Always greet your seniors and colleagues when you meet them. It shows that you have respect for them.

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30.ACCEPT FALIURES AND DONT GIVE EXCUSES When you fail to do something, accept it. Accepting failure is the first step towards success. Never give excuses for failures. Instead accept it and try to find out root cause so that you can improve upon it.

RECOMMENDATIONS Risk averse investors should go for financial planning, because it includes all the investments which help in future. Arbritage is also gud investment opportunity, in it there is minimum risk and returns are their. Investing in different stocks like equity, mutual fund, SIP,s, arbritage. It gives you good returns and the risk factor goes down.

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CONCLUSION-

After the entire analysis of survey and questionnaires, we find that Most of the respondents said that they have equity stocks in their portfolio. And among these-they prefer to invest through arbritage andfinancial

planning said that they do invest directly in equity market. According to survey people prefer to invest into financial planning than investing directly into stock Financial planning reduce their risk in investing in the market as it gives diversification to their portfolio. It give them the benefit of professional management. Also it give them liquidity irrespective of market conditions..

The respondent, who directly invests in stock market, gives weigthage to high risk and high returns game. Some of them want to be their own fund managers. And some prefer to book profit as they reach their profit target. They do believe in churning and enjoy making higher returns.

Some investors told that they like to keep a certain percentage of their portfolio into-financial planning and they want to manage by themselves. It can also be seen from findings that an investor has made higher returns in a long run by investing into direct equities, but if one wants to make a higher returns in the short run and midterm horizon, then definitely financial planningare the best.

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BIBLIOGRAPHY:

Magazines: Investors India Business World Business India Websites: www.bseindia.com www.moneycontrol.com www.google.co.in www.capitalmarket.com www.indiainfoline.com www.yahoofinance.com www.mutualfundsindia.com

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