Investments: An Introduction

This introductory book covers the lifestyle choices faced by the individual over his/her life (the prudent conduct of which leads to early achievement of the elusive financial security goal - FSG), and the nuts and bolts and principles of investments. The individual has four distinct phases in his/her life. Each phase has its unique lifestyle choice-variables and therefore unique codes or rules that need to be recognised and adhered to in order to achieve the FSG as early as possible, and to preserve assets until exodus. Investing also has distinct codes, rules and principles. It is essential to have a good understanding of the financial system, which delivers the main asset classes: the financial asset classes (1) money market investments, (2) bonds and (3) shares. The other assets are real assets and the categories are (1) property, (2) commodities and (3) other real assets (art, antiques, rare stamps and the like).

Content

1. Four phases of the life-cycle
   1. Learning outcomes
   2. Introduction
   3. Phase 1: newborn to adulthood (0–20)
   4. Phase 2: adulthood to maturity (20–40)
   5. Phase 3: maturity to seniority (40–60)
   6. Phase 4: seniority to exodus (60–80+)
   7. Other rules which apply throughout or during part of your life-cycle
   8. Life-cycle of happiness
   9. The life-cycle and investing
   10. Bibliography
2. The financial system
   1. Learning outcomes
   2. Introduction
   3. Six elements of the financial system
   4. Element 1: lenders and borrowers
   5. Element 2: financial intermediaries
   6. Element 3: financial instruments
   7. Element 4: financial markets
   8. Element 5: money creation
   9. Element 6: price discovery
   10. Allied participants in the financial system
   11. Bibliography
3. Investment instruments
   1. Learning outcomes
   2. Introduction
   3. Time value of money
   4. Money market instruments
   5. Bond market instruments
   6. Share market instruments
   7. Derivative market instruments: futures and options
   8. Real investments
   9. Investment vehicles
   10. Foreign investments
   11. Asset classes
   12. Bibliography
4. Investment principles
   1. Learning outcomes
   2. Introduction
   3. Definition and objective of investment
   4. Risk-free rate
   5. Investment environment
   6. Risk and return
   7. Investment theories and maxims
   8. Lessons from the theories and maxims
   9. Portfolio management
   10. Asset allocation over the life-cycle
   11. Bibliography

Endnotes