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A short course of lectures
«Investments: An Introduction»





Definition and objective of investmentChoose your life partner with careContinue to invest assets wiselyChoose this day carefully and prepare yourself emotionallyMeasuring risk and returnBe cognizant of behavioural finance (the psychology of the market)Other rules which apply throughout or during part of your life-cycleDebt marketValuation of fixed-interest securitiesBe kind to people with humble stations (positions) in lifeOther real investmentsWhat are risk and return?Resist the Indiana Jones temptation to make a comebackAppreciate market liquidityUndertake SKI holidaysRead up on the cognitive development stages of offspringRisk-free rateAsset allocation over the life-cycleLessons from the theories and maxims Capital asset pricing modelShare market instrumentsSensorimotor stage (0-2 years)Property Of the real investments, property is the most significant investment for the retail investor (individual)Phase 4: 60-80+Aggressively repay debtMoney market instrumentsCommoditiesShare marketElement 5: money creationUnderstand macroeconomics and mean reversionValuation of futures and optionsLearning outcomesPhase 2: 20-40Valuation of other real assetsPhase 2: adulthood to maturity (20-40) Pursue happinessValuation of income-producing propertyLearning outcomesThe financial systemThere is no simple formula to make you wealthyPrimary and secondary marketsDo not become dependent on the largesse of your spouseReal investmentsPhase 1: newborn to adulthood (0-20) Investment principlesFour phases of the life-cycleLearning outcomesHedge fundsHave no regrets upon exodusDerivative market instruments: futures and optionsNurture your health and family lifeDrive home the philosophy that wealth has two legs: monetary and non-monetaryElement 3: financial instrumentsThe life-cycle and investingInvestment environmentSix elements of the financial systemPromote an ethos of sound money managementDo not lend money to anyoneProvide sound education inside and outside institutions of learningSpot and derivative marketsUndertake lifelong continuing educationThe instruments of the financial intermediariesInsure your life onlyBase investment decisions on their FVPValuation of commoditiesPortfolio managementLong-term insurersRead up on the undisputed "Out of Africa" theorySecurities unit trustsDo not bow to peer pressureTop-down investing is wisePreoperational stage (2-7 years)Finance lifestyle assets with excess fundsPromote a rock-solid emotional backboneTime value of moneyNurture and exploit your personal brandProgramme the child's mind to be an inquiring oneTake on debt, but with much thoughtRelationship between risk and returnAppreciate the life-cycle consumption theoryInvestment vehiclesAppreciate the significance of the risk-free ratePhase 1: 0-20Formal operational stage (11-15+ years)Valuation of participation interestsRetirement fundsElement 6: price discoveryExchange traded fundsInvest assets wiselyCash out and separate business risk from personal assetsLearning outcomesChoose your career with careModern portfolio theoryFundamental analysis (aka firm foundation theory) (security valuation)Risk and returnBe quietly competitiveLife-cycle of happinessPrivate equity fundsInvestment theories and maxims Foreign investmentsDiversification is criticalThe instruments (ultimate investments) of the ultimate borrowersBe aware of the principal-agent dilemmaConcrete operational stage (7-11 years)Valuation of sharesInvestment instrumentsOTC and exchange-driven marketsPhase 3: 40-60Nurture relationships in business with like-minded people and avoid negatively-focused peoplePhase 4: seniority to exodus (60-80+) Efficient market hypothesisRisk and return: the recordNever fall in love with an investmentBehavioural finance theoryUndertake a lifelong love affair with macroeconomics and the political environmentAsset classesBond market instrumentsElement 2: financial intermediariesDo not be led by technical analysisUnderspendElement 1: lenders and borrowersLeave investing to the professionalsPhase 3: maturity to seniority (40-60)Foreign exchange marketAllied participants in the financial systemUndertake one career and become accomplished at itElement 4: financial marketsProperty unit trusts
 
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