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A short course of lectures
«Investments: An Introduction»

Appreciate the significance of the risk-free rateNever fall in love with an investmentBond market instrumentsChoose your life partner with careElement 1: lenders and borrowersTop-down investing is wiseFinance lifestyle assets with excess fundsRelationship between risk and returnPhase 1: 0-20Debt marketBase investment decisions on their FVPDerivative market instruments: futures and optionsTake on debt, but with much thoughtBe quietly competitiveReal investmentsLearning outcomesInvest assets wiselyChoose this day carefully and prepare yourself emotionallyPhase 4: seniority to exodus (60-80+) Capital asset pricing modelCommoditiesRisk and return: the recordPhase 3: maturity to seniority (40-60)Do not become dependent on the largesse of your spouseOther rules which apply throughout or during part of your life-cycleProperty unit trustsRisk-free rateValuation of other real assetsOther real investmentsRead up on the cognitive development stages of offspringDo not bow to peer pressureDo not lend money to anyoneLessons from the theories and maxims UnderspendPhase 1: newborn to adulthood (0-20) Foreign investmentsProgramme the child's mind to be an inquiring oneSensorimotor stage (0-2 years)Resist the Indiana Jones temptation to make a comebackPortfolio managementSecurities unit trustsSix elements of the financial systemAggressively repay debtElement 5: money creationLearning outcomesBe kind to people with humble stations (positions) in lifeValuation of commoditiesEfficient market hypothesisFormal operational stage (11-15+ years)Measuring risk and returnModern portfolio theoryTime value of moneyForeign exchange marketRisk and returnRead up on the undisputed "Out of Africa" theoryProvide sound education inside and outside institutions of learningMoney market instrumentsElement 6: price discoveryAppreciate market liquidityValuation of income-producing propertyThe instruments of the financial intermediariesPromote a rock-solid emotional backboneWhat are risk and return?Asset allocation over the life-cycleNurture your health and family lifeAllied participants in the financial systemDefinition and objective of investmentAppreciate the life-cycle consumption theoryInvestment principlesRetirement fundsFour phases of the life-cycleDo not be led by technical analysisPhase 2: 20-40Valuation of participation interestsHedge fundsThe financial systemThe instruments (ultimate investments) of the ultimate borrowersBehavioural finance theoryNurture relationships in business with like-minded people and avoid negatively-focused peopleAsset classesUndertake lifelong continuing educationLife-cycle of happinessInsure your life onlyPrivate equity fundsPhase 2: adulthood to maturity (20-40) Drive home the philosophy that wealth has two legs: monetary and non-monetaryThere is no simple formula to make you wealthySpot and derivative marketsInvestment environmentInvestment instrumentsElement 3: financial instrumentsUndertake SKI holidaysExchange traded fundsElement 4: financial marketsOTC and exchange-driven marketsShare marketInvestment vehiclesNurture and exploit your personal brandLearning outcomesThe life-cycle and investingPreoperational stage (2-7 years)Diversification is criticalLearning outcomesValuation of sharesConcrete operational stage (7-11 years)Property Of the real investments, property is the most significant investment for the retail investor (individual)Undertake one career and become accomplished at itBe cognizant of behavioural finance (the psychology of the market)Understand macroeconomics and mean reversionValuation of futures and optionsPhase 3: 40-60Cash out and separate business risk from personal assetsHave no regrets upon exodusPromote an ethos of sound money managementLong-term insurersPrimary and secondary marketsElement 2: financial intermediariesShare market instrumentsChoose your career with carePhase 4: 60-80+Valuation of fixed-interest securitiesBe aware of the principal-agent dilemmaInvestment theories and maxims Continue to invest assets wiselyFundamental analysis (aka firm foundation theory) (security valuation)Undertake a lifelong love affair with macroeconomics and the political environmentLeave investing to the professionalsPursue happiness
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