Financial Sector: by - Sanskriti Gupta

Financial sector
By – Sanskriti Gupta
About Financial Sector -
The financial sector is a section of the economy made up of firms and institutions that provide financial services to
commercial and retail customers. This sector comprises a broad range of industries including banks, investment
companies, insurance companies, and real estate firms.
 provide financial services

 healthy economy.
 generates revenue
 comprised of many different industries
Different Financial Sectors-
Mutual
Real Estate Banks
Funds
Share
Gold Insurance
Market
Post office PPF

Real Estate
Real estate is real property that consists of land and improvements, which include
buildings, fixtures, roads, structures, and utility systems. Property rights give a title of
ownership to the land, improvements, and natural resources such as minerals, plants,
animals, water, etc.
Before committing to any real estate investment, it is essential to
know its pros and cons.
Pros – Cons-
 Allows Diversification of Asset  Capital gain tax is applicable
 Instantaneous Dual Income  High Cost
 Great Inflation Hedge  High Cost of maintenance
 Saves Income Tax  property is very illiquid

 Sometimes go down (temporarily)
Banks
An investment bank is a financial services company
that acts as an intermediary in large and complex
financial transactions. An investment bank is usually
involved when a startup company prepares for its
launch of an initial public offering (IPO) and when a
corporation merges with a competitor. It also has a
role as a broker or financial adviser for large
institutional clients such as pension funds.
 The creation of capital

 Underwriting new debt and equity securities
 Help corporations, governments, and other groups
Advantages/Disadvantages
Pros- Cons -
 Increasing Competition Among Banks

 The Government Is Eager To Open More Accounts
 Non-Performing Assets
 Banks Merge To Help Each Other
 Increase In Borrowing Options
 Certainty of Future Funds
 Low Returns
 Bank Accounts are Insured
 Account Fees
Mutual Funds
A mutual fund is a company that pools money from many investors
and invests the money in securities such as stocks, bonds, and
short-term debt. The combined holdings of the mutual fund are
known as its portfolio. Investors buy shares in mutual funds. Each
share represents an investor’s part ownership in the fund and the
income it generates.
Why do people buy mutual funds?
Professional
Diversification
Management
Affordability Liquidity
Mutual funds are currently the most popular investment vehicle for the majority of investors but
before investing in one its crucial to understand the advantages they offer as well as the
disadvantages.
Pros- Cons-
 High Expense Ratios and Sales Charges

 Advanced Portfolio Management
 Management Abuses
 Dividend Reinvestment
 Tax Inefficiency
 Risk Reduction (Safety)
 Poor Trade Execution
 Convenience and Fair Pricing
GOLD
There are a plethora of precious metals, but gold is placed in high regard as an
investment. Due to some influencing factors such as high liquidity and inflation-
beating capacity, gold is one of the most preferred investments in India. Gold
investment can be done in many forms like buying jewelry, coins, bars, gold
exchange-traded funds, Gold funds, sovereign gold bond scheme, etc.
Pros and Cons
Pros Cons
 Inflation insurance  No yield

 Disaster insurance  Low capital gains
 Diversification  Annoying to transact
 Simplicity  Hard to store
 Tangibility  Volatility
Stock Market
Stock market is an arrangement where equity

shares of companies are bought and sold by
the participants. The participants can be
investors and traders. The investors mainly
have a long-term horizon in mind and benefit
from capital appreciation over the given
period. Traders, however, earn profits by
tapping into small price changes in equity
shares which mostly last for a few minutes to
the whole trading session.
What are the pros and cons of investing in the stock market? Historically, the stock
market has delivered generous returns to investors over time, but stock markets also
go down, presenting investors with the possibility for both profits and loss; for risk and
return.
Pros – Cons –
 Takes advantage of a growing economy:  Risk

 Best way to stay ahead of inflation  Stockholders paid last
 Easy to buy  Time
 Make money in two ways  Emotional roller coaster
 Easy to sell  Professional competition
Insurance
Life insurance is something you may consider adding to

your financial plan if you're interested in providing a
measure of security for your loved ones. Proceeds from a
life insurance policy can be used to pay final expenses,
eliminate outstanding debts or cover day to day expenses.
Whether life insurance is a smart investment may depend
on what you need and want a policy to do for you.
Pros/Cons
Pros – Cons –
 Protect Your Family  High Cost And Fees

 Clear The Financial Mess  Uncertain And Negative Returns
 Make A Profit  Lack Of Flexibility
 Cope With Retirement
 Not Really Tax-Deferred
 Numerous And Various Policies
Post Office
Post Office Investments include a number of saving schemes that
provide a high rate of interest as well as tax benefits and most
importantly, carry the sovereign guarantee of Indian Government.
Read on to know about various Post office savings schemes along
with the interest rates, key features and benefits, tenure of deposit,
etc.
If you have planned to go ahead with the Post Office scheme, then you
will get several advantages as well as disadvantages-
Easy investment
Long–term investment gain
Tax exemption
A wide array of options
PPF
The Public Provident Fund is one of the most popular long
investment options. If you want to keep your money in a safe
investment plan for the long term then this plan is a true buy. You
can open a PPF account in any city of India, but you must be a
citizen of India. Since PPF investment plan is backed by the
government. There are so many valuable reasons to invest in PPF,
but interest is the most important.
Pros – Cons –
 Complete capital protection Difficult to consistently beat inflation
 Tax-free High lock
 Returns guaranteed No facility for NRI’s
 Partial withdrawal and loan facilities one account allowed
 Option to extend Account cannot be closed prematurely
 Easy account opening Restriction
 Minimum investment
Thankyou

Financial Sector: by - Sanskriti Gupta

Uploaded by

Copyright:

Available Formats

Financial Sector: by - Sanskriti Gupta

Uploaded by

Document Information

Original Description:

Original Title

Copyright

Available Formats

Share this document

Share or Embed Document

Sharing Options

Did you find this document useful?

Is this content inappropriate?

Copyright:

Available Formats

Financial Sector: by - Sanskriti Gupta

Uploaded by

Copyright:

Available Formats

Financial sector

 provide financial services

Post office PPF

 Allows Diversification of Asset  Capital gain tax is applicable

 Instantaneous Dual Income  High Cost

 Great Inflation Hedge  High Cost of maintenance

 Saves Income Tax  property is very illiquid

 The creation of capital

 Increasing Competition Among Banks

Why do people buy mutual funds?

 High Expense Ratios and Sales Charges

 Inflation insurance  No yield

Stock market is an arrangement where equity

 Takes advantage of a growing economy:  Risk

Life insurance is something you may consider adding to

 Protect Your Family  High Cost And Fees

You might also like