Swot Analysis of Asset Classes

SWOT ANALYSIS OF EQUITY SHARES
Strength
Higher dividend.
Voting Right.
Capital Appreciation.
Right shares.
Good liquidity position.
Weakness
Uncertain return.
Residual claim on income as well as assets.
Low market value.
Risky investment.
Higher speculation.
Dilution of control.
Cost of equity.
Opportunity
Higher return.
Capital appreciation.
Right to vote.
Right in liquidation.
Threat
Chance of loss.
Fluctuations in market price.
SWOT ANALYSIS OF MUTUAL FUNDS

STRENGTHS
1. Large number of potential customers are base.
2. Government support by way of tax concession for MF investors
3. Volatility of bank interest rate.
4. Better scope for accessing market information
5. Offer liquidity to the investors at any time.
6. Offers variety of products to the investors.
7. The size of the market is large.
WEAKNESS
1.
2.
3.
4.
5.
Poor participation of retail investors

Lack of focus
Under performance
Poor service conditions
Distribution network is confines only to metro cities
OPPORTUNITIES
1.
2.
3.
4.
5.
6.
7.
Huge untapped market in semi-urban and rural areas.

High level of savings habit among the people
Liberalized business environment.
Growth opportunities in developing markets
Using on-line mode of trading systems.
Investment opportunities abound in the international market.
Failures of non bank financial company operations.
THREATS
1.
2.
3.
4.
5.
6.
Increasing competition among the players.

High level of volatility in the stock market.
Low yields with inflationary risks.
Possibility of more stringent regulations by SEBI , RBI , AMFI , etc ., in future.
Stagnant growth in developed world.
Fluctuations of domestic currencies against Dollar.
GOLD ASSET CLASS - SWOT ANALYSIS

STRENGTHS
1.
Gold is an asset class which was used as an investment vehicle ( a store of value)
since ancient times. Gold continues to be an important asset class even in modern times.
2.
Gold has ready marketability and Liquidity
3.
Gold is one of the few asset classes which have performed well in the recent times.
YTD return on Gold investment has been more than 20% in 2010.
4.
Investors generally buy gold as a hedge or safe haven against any economic,
political, social, or fiat currency crises (including investment market declines, burgeoning
national debt, currency failure, inflation, war and social unrest).
WEAKNESSES
1.
Gold is an idle Asset with no regular return profile.
2.
Gold storage has costs, including cost of insurance.
3.
Gold prices have been volatile in recent times. A correction cannot be ruled-out
which may involve significant reversal.

4.
Gold ended 2014 slightly down, declining 1.72 percent. This is the second-straight
year that gold has declined.

5.
The drop in gold prices this year is affecting coin sales. The U.S. Mint is heading for
its biggest annual decline in sales since 2006.

6.
Gold-backed ETFs are seeing the negative effects of lower gold prices as well.
Holdings in gold-backed ETFs dropped to the lowest level since 2009, as roughly $6.7
billion was removed this year.
OPPORTUNITIES
The factors which support bullish sentiments in Gold:

1.
Inflationary monetary and fiscal policies followed by US and other major economies
which have supported price rallies in Gold and other commodities.

2.
Europes simmering sovereign debt crisis, which has not only undermined the euros
appeal as an official reserve asset . . . but has also pushed the European Central Bank to
pursue inflationary monetary policies . . . and has pushed more investors in Europe and
around the world to seek the safety of gold.
3.
Continuing if not growing interest by the official sector. In particular, the
central banks of a number of newly industrialized emerging nations are seeking to

diversify official reserve assets into dollar alternatives. Many believe the official sector
continues to be an important net buyer of gold and could easily add another 150 to 300
tons or possibly more this year with sizeable net purchases continuing for years to
come. Details of recent Central Bank gold purchases is given in subsequent paragraphs.
4.
Rising long-term saving, investment, and jewelry demand for gold from China, India,
and other gold-friendly nations enjoying healthy growth in business activity and
household incomes growth that is likely to continue at least several years.
5.
The continuing maturation of what can be called as the gold-investment
infrastructure in other words, the development of new gold-investment products and

channels of distribution in many important geographic markets.
6.
The relatively small size of the world gold market compared to other capital markets
such as equities or currencies so that even small shifts in portfolio preferences

away from currencies, or equities, or real estate, for example, may have little price effect
on these big markets but will have a relatively large, indeed profound, effect on gold.
7.
The recent onset of global food and agricultural inflation.
8.
Stagnant world gold-mine production for the next five years or longer.
9.
Recent Central Bank Purchases of Gold:
After two decades of selling, at an average annual rate of some 400 tons per year,
Central Banks became a net buyers of gold in 2009, adding more than 400 tons to total
official-sector holdings.
Last year, India bought 200 tons off the market directly from the International
Monetary Fund. This was nearly half the total quantity the IMF was obliged to sell over
several years to raise cash for its operating budget as well as to aid some of its poorest
member countries.
10. Bank for International Settlements :
Another sign of golds rising importance and rehabilitation as an official reserve asset
has been the use of gold swaps early this year by the Bank for International Settlements
as a vehicle to facilitate the mobilization of central bank gold without having to sell metal
in the open market. Between, last December and April, the BIS took some 378 tons onto
its balance sheet from one or more anonymous central bank possibly Greece, Ireland,
Portugal, Spain of another heavily indebted European country. The BIS serves as a sort of
central bank for central banks and as counterparty to national central bank financial
transactions. In a gold swap, the BIS exchanges currencies the dollar, the euro, the
yen, perhaps even the yuan or other national currencies for physical gold usually for a
fixed maturity.
THREATS
1.
The gold market is also subject to speculation as other commodities are, especially
through the use of futures contracts and derivatives.

2.
Today, like most commodities, the price of gold is driven by supply and demand as
well as speculation. However unlike most other commodities, hoarding (saving) and
disposal plays a larger role in affecting its price than its consumption.
3.
Gold prices have been volatile in recent times. A correction cannot be ruled-out
which may involve significant reversal.

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What are the strengths and weaknesses of equity shares and mutual funds according to the analysis?

What are the strengths and weaknesses of equity shares and mutual funds according to the analysis?

What factors support bullish sentiments in gold?

What factors support bullish sentiments in gold?

SWOT ANALYSIS OF EQUITY SHARES

SWOT ANALYSIS OF MUTUAL FUNDS

Poor participation of retail investors

Huge untapped market in semi-urban and rural areas.

Increasing competition among the players.

GOLD ASSET CLASS - SWOT ANALYSIS

Gold has ready marketability and Liquidity

Gold is an idle Asset with no regular return profile.

Gold storage has costs, including cost of insurance.

which may involve significant reversal.

year that gold has declined.

its biggest annual decline in sales since 2006.

The factors which support bullish sentiments in Gold:

which have supported price rallies in Gold and other commodities.

Continuing if not growing interest by the official sector. In particular, the

central banks of a number of newly industrialized emerging nations are seeking to

The continuing maturation of what can be called as the gold-investment

infrastructure in other words, the development of new gold-investment products and

such as equities or currencies so that even small shifts in portfolio preferences

The recent onset of global food and agricultural inflation.

Recent Central Bank Purchases of Gold:

through the use of futures contracts and derivatives.

which may involve significant reversal.

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