Investment analysis and portfolio construction

Investment is the employment of funds with the aim of achieving additional income or growth in value. There is also a possibility of incurring loss in financial transaction. The aim of the investor is to minimise the risk involved in investment and maximize the return from the investment. Without adequate and appropriate knowledge, it is difficult to measure the rate of return and the risk involved in an investment. Most of the investors are faced with innumerable problems while selecting the portfolio. The study examines the motives for investment, analyses the availability of investment media, identifies the expectations regarding investment avenues, evaluates the performance of investment, and guides in the construction of the portfolio. It concludes that success of every investment decision requires both knowledge and skill. Aim of every investor is to maximize profit by construction of good portfolio.