A STUDY ON SECURITY ANALYSIS AND PORTFOLIO MANAGEMENT
Traditional security analysis emphasis the projection of prices and dividends accordingly the potential price the firms common stock and the future dividend seem were to be forecast and the discount allowed 10%.
The traditional views are on the intensive and current market price of security if the current market price security was the above value the analysis recommended same conversely. If the Current market price of the security below the entrance value the customer advise to purchase these traditional view’s have shifted their emphasis to a modern approach which analysis risk and return off a common stock rather than relevant price and dividend esteems.
For making proper investment involving both risk and return, the investor has to make identify undervalues securities for buying and overvalues securities for selling is both an art and a study of the alternative avenues of the investment-their risk and return characteristics, and make a proper projection or expectation of the risk and return of the alternative investments under consideration.
Investor has to tune the expectations to this preference of the risk and return for making a proper investment choice. The process of analyzing the individual securities and the market as a whole and estimating the risk and return expected from each of the investments called as security analysis.
Security analysis in both traditional sense and modern sense involves the projection of future dividend or ensuring flows, forecast of the share price in the future and estimating the intrinsic value of a security based on the forecast of earnings or dividend.
Once the investment policy, has known the securities to be bought have to be scrutinized through eitherFundamental analysis or Technical analysis or Efficient Market Hypothesis theory.
Fundamental analysis is really a logical and systematic approach to estimating the future dividend and share price it is based on the basic premise that share price is determined by a number of fundamental factors relating to the economy, industry and company.
According to technical analysis the investors believe that share prices are determined by the demand and supply forces operating in the market. These demand and supply forces in turn are influenced by a number of fundamental factors as well as certain psychological or emotional factors. Many of these factors cannot be quantified. The technical analyst therefore concentrates on the movement of share prices. He claims that by examining past share price movements future share prices can be accurately predicted. Technical analysis is the name given to forecasting techniques that utilize historical share price data. The rationale behind technical analysis is that share price behavior repeats itself over time and the analyst attempts to drive methods to predict this repetition.
To understand the term investment we need to have the knowledge on Portfolio’s are combination of assets traditional portfolio management was The selection of security to suit the particular requirement of an invested The modern portfolio theories is based on a scientific approach and has The scientific obligation based on the estimates of risk and return. The Portfolio attitudes of the investor toward a risk return tradeoff through analysis and screening of individual security.
risk and relationship
Hence to understand the essence of investment analysis this study is undertaken
ASSUMPTIONS OF THE STUDY:
This study assumes than an investor purchases the share at the beginning of the...