Security Analysis & Portfolio Management

Topics: Stock market, Stock, Technical analysis Pages: 30 (7517 words) Published: April 26, 2013



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.

    time factor
    return
    risk and relationship
Hence to understand the essence of investment analysis this study is undertaken


         This study assumes than an investor purchases the share at the beginning of the...
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