Business cycle

How can an investor use knowledge of business cycle to Invest ?

How can an investor use knowledge of business cycle to Invest ?

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PARTAKERS IDENTIFICATION NUMBER

BHARATH KUMAR

SUREKA TATAVARTY

SIRISHA E

SIRISHA B

AMARNATH G

SAI SOUMYA K

FACULTY: P V RAJU CENTRE: HYDERABADBATCH CODE:

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CONTENTS SLIDE NUMBERGROSS DOSMESTIC PRODUCT 4-6

BUSINESS CYCLE 7-8

INVESTMENT 9-11

LONG TERM INVESTMENT 12-13

SHORT TERM INVESTMENT 14

CONCLUSION 15-16

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Gross Domestic Product

• Gross Domestic Product is the market value of all officially recognized final goods and services produced within a country in a year, or over a given period of time.

• GDP per capita is often used as an indicator of a country's material standard of living.

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GDP = C + I + G + (X − M) Saturday, April 8, 2023 5

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Business Cycle

Business cycle or Economic cycle refers to economy-wide fluctuations in production, trade and economic activity in general, over several months or years in an economy.

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Different Phases of Business cycle

ExpansionRecovery BoomPeaks

Contraction RecessionDepressionTroughs

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Investment

• Investment is any asset in which funds can be placed with the expectation of preserving or increasing value earning a positive rate of return

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Investment

Alternatives

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Deposits Money market instrumentsBonds and debentures Equity sharesMutual fundsInsurance productsRetirement productsReal estatePrecious objects

Investors tend to follow different investment philosophies as they move through different stages of the life cycle.

Youth StageMiddle-Aged Consolidation StageRetirement Stage

Investing Decisions

over Investor Life Cycle

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Long term Investment Plan - Systematic Investment Plan

Systematic investment plan is an investment strategy where is an investor needs to invest the same amount of money in a particular investment at every stipulated time period.

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BONDS

Any securities that are founded on debt.

It is grouped under fixed-income securities.

Here you are lending out your money to a company or

government.

The rate of return on bonds is generally lower than other

securities.

Where there is little risk, there is little

potential return.

The safety and stability, however, come at a cost.

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Short term

Investment Plan-

Mutual Funds • It is an entity that pools money of large

number of investors to invest in different securities.

• It provide right diversification for your investment.

MUTUAL FUNDS

CLOSE ENDED FUNDS

OPEN ENDED FUNDS

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Business Cycle as a driver for investment

• Why we need to know the business cycle for investment?• Because future is uncertain• Manage risk• To make return more predictable

• What are the basic decisions that has to be taken care by an investor?

• What to buy/sell?• How much to buy/sell?• When to buy/sell?

Conclusion

• Business cycles are the turning points for markets.• With the help of Business cycles an investor can

choose the appropriate asset mix in different phases.

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THANK YOU

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