Industry analysis refers to the assessment of different industries by using strategy in order to find out the potential and most profitable industry for the purpose of making investment in it. It is good to conduct economic analysis before starting industry analysis so that it can be performed in the light of the economic analysis. This will provide better results.
Derivative assets are those assets whose value is derived from some other assets. Futures & options are two main categories of best known derivative assets. Other derivative assets include swaptions, swaps and inverse floaters, each of these have different risk features. Plain vanilla derivative assets are mostly useful to mutual funds, pension funds, corporate treasurers, endowments and financial institutions. Not all derivative assets are similar; some are highly conservative while some are inherently speculative.
Value investing & growth investing are two approaches to investing that are considered by the investors in making investments. Each one has its own characteristics and advantages. The investors which are interested in value investing are referred as value investors while the other ones are considered as growth investors.
The use of specific market-produced data for the analysis of both the overall stock prices (industry averages or market indices) and single stocks is called technical analysis. In other words the technical approach to investing indicate the fact that price move in trends which are set by the altering attitudes of the investors towards a variety of economic, political, psychological and monetary forces. In technical analysis trend changes are identified at early stage and to keep certain sort of investments until the reverse trend is indicated by the evidence.
A portfolio is a collection of different investment alternatives. By considering potential options of investments, a better set of portfolio can be developed that can generate reasonable returns for the investors. Following are certain investment alternatives of the capital market that are useful in developing & managing portfolio effectively.