Banner

  • CFP Certification

    In India, Certified Financial Planner (CFPCM) Certification programs are offered mainly by Financial Planning Standards Board India (FPSBI), a public-private enterprise and a body that guides the development and promotion of profess...

  • Career for CFP Certified

    The financial industry is growing in leaps and bounds. There are many career opportunities and job openings in this ever-growing industry. Financial Planner Career is a corporate career track, even for those who run their own finan...

  • Benefits of CFP Certification

    CFPCM certification is recognized in 23 countries across the globe. Besides, the certification immediately get the trust of clients in comparison to other Financial Planners.

Module IV - Investment Planning

____________________________________________________________________


COURSE DESCRIPTION: This module includes introduction to Investment Planning, Investment vehicles, investment strategies, Regulation of an investment advisers, Application to clients, etc.

Introduction to Investment Planning

 

 

1 How investment planning is different from selling investment products
2 Investment risk
a. Definition of risk
b. Types of risk
-Market risk
-Reinvestment risk
-Interest rate risk
-Purchasing power risk
-Liquidity risk
-Political risk
-Exchange rate risk
3 Measuring risk
a. Standard deviation
b. Beta
4 Managing risk
a. Diversification
-Diversifiable and un-diversifiable risk
-Product diversification
-Time diversification
b. Hedging
5 Returns
a. Relationship between risk and return
b. Compounding
-Types of returns
-CAGR
-Total returns
-Risk-adjusted returns
-Post-tax returns
- Tax on capital gains
- Tax on income
e. Holding period return
f. Yield to maturity
6 Investment portfolio
a. Risk and return on a portfolio
b. Measuring portfolio risk
c. Effect of diversification on portfolio risk and return


Investment Vehicles

Concept, structure, returns measurement (income and/or capital gains), tradability, liquidity and legal issues of the following investment vehicles. The objective is to provide an essential understanding of the products from a risk-return perspective, so that proper product recommendations can be made.
8 Fixed income instruments
a. Securities
-Government securities
-Corporate Securities
b. Deposits
-Bank deposits
-Corporate deposits
9 Insurance-based investments
10 Mutual funds
a. The concept and role of mutual funds
b. Fund structures and constituents
c. Legal and regulatory environment
d. The prospectus/offer document
e. Fund distribution and sales practices
f. Accounting, taxation and valuation norms
g. Investor services
h. Investment management
i. Measuring and evaluating mutual fund performance
11 Equity shares
12 Derivatives
a. Essential features
b. Application to investment portfolios
13 Real estate
a. Forms of real estate investment
b. Financing real estate
c. Costs of buying and maintaining
14 Other investments
a. Bullion
b. Collectibles
c. Precious metals


Investment Strategies

15 Active and passive strategies
a. Market timing
b. Securities selection
c. Maturity selection
d. Buy/hold
16
 Asset allocation
a. Strategic and tactical asset allocation
b. Fixed and flexible allocation
c. Rebalancing strategies
d. Formulae based monitoring and revision of portfolios


Regulation of an Investment Adviser

17
 The regulatory functions, rules and codes of conduct pertaining to planners
a. Banks: RBI
b. Mutual funds and collective investment schemes: SEBI
c. Equity shares: SEBI
d. Derivatives: SEBI
e. Grievance mechanisms


Application to Clients

18
 Matching investment vehicles to needs of clients
a. Asset allocation and portfolio rebalancing according to client needs
b. Case studies
-Single persons
-Young couples
-Mature couples with grown children
-Empty nesters