Investments in Finance and Banking: Theoretical Summary and News Presentation Outline, Summaries of Banking and Finance

Download Investments in Finance and Banking: Theoretical Summary and News Presentation Outline and more Summaries Banking and Finance in PDF only on Docsity! Vietnam National University University of Languages and International Studies ENGLISH FOR FINANCE AND BANKING NEWS PRESENTATION OUTLINE TOPIC 4.2: INVESTMENTS Student names: Lê Quang Thanh - 22040281 Nguyễn Trọng Gia Bảo - 22040046 Nguyễn Tuấn Huy - 22040663 Đặng Phương Mai - 22040642 Class: ENG3073 9 Date of submission: 21 March 2024 Hanoi, 18 March 2024 1, Theoretical Summary: a) Definition of Investing: - Investing is a way to achieve long-term financial growth by strategically investing in financial instruments such as stocks, bonds, and mutual funds. Unlike saving, investing involves taking on some risk, but it also has the potential to earn higher returns over the long term. - Investing is a way to reach long-term financial goals, such as saving for college, a down payment on a house, or retirement. Because investing involves taking on some risk, choosing investments that asset allocation based on your profile and investment objectives is essential. In general, the longer you invest, the more risk you can take because you have more time to ride out the ups and downs of the stock market. One important thing to remember is that investing comes with no guarantees, and there is always the risk of losing money. - Compared to saving, investing offers the possibility of significantly greater returns, the ability to grow your wealth over time through compounding and reinvestment, and the opportunity to help you achieve long-term financial goals. - However, some cons should be considered. Investing always involves some level of risk, and there is no guarantee that you will make money or even get back what you've invested. Diversification across several holdings can help. Researching and understanding the potential dangers linked with various forms of investments is essential. Investing requires discipline and a long-term perspective, which can be difficult for some people to maintain in the face of market volatility or the temptation to follow the crowd to make quick profits. b) Reasons for Investing: - Bamford and Grant (2021) pointed out some reasons for investing: + Consumer demand: When consumer demand rises, firms will likely want to buy more capital equipment to expand their capacity to meet this demand. + Interest rates: A fall in the interest rate will make borrowing to invest cheaper and reduce the opportunity cost of using retained profits for investment. If interest rates are high, firms forgo more potential return on their money by investing in capital goods rather than other interest-bearing accounts. + Technology: Advances in technology will raise the productivity of capital goods, meaning they will produce more output for the same investment, which makes investments more attractive. + Cost of capital goods: A fall in the price of capital equipment or installation cost of capital goods will make investment cheaper. 1 Government bonds are low-risk investments because the U.S.U.S. government backs them. The same can't be said for corporate bonds. C. Mutual funds: - Mutual funds: Combining funds from multiple investors to invest in stocks, bonds or other assets, and it's usually managed and made investment selections by a professional This can assist in making more diversified portfolios by enabling investors to buy large amounts of assets with a single purchases Examples of mutual funds: Index funds, bond funds, target date funds The "mutual" in mutual funds comes from the equal profits and losses that one investor shares with another D. Real estate investing: - Real estate investing includes Physical property, houses, commercial buildings, etc. Investors can buy real estate stocks, R.E.I.T.s, for real estate exposure as a substitute if they don't have the capital to buy a house for investing. E. Gold market: - Gold market: Investment in gold can be made in separate ways + Purchase the gold itself: It can be in the form of gold bullion, in bars or wafers, as gold bullion coins, etc. To avoid storage issues, investors can request dealers hold onto the gold and provide them with a gold deposit certificate proving ownership. + Buying shares in gold-mining firms: They are available in Canada, the U.S., South Africa + Gold stocks, gold 2, News Article Report: a) Article Validation: - Title: “Investors should start paying attention to small-cap stocks, says NFJ Investment's John Mowrey.” - Author: John R. Mowrey (NFJ Investment Group, LLC, n.d.) + He holds a Bachelor of Arts in Political Science from Rhodes College and a Master of Business Administration from Southern Methodist University. + He began his career in the investment industry in 2006 and currently serves as a leader at NFJ Investment Group. He joined this Dallas-based global value equity manager in 2007. His titles include Executive Managing Director, Senior Portfolio Manager/Analyst, and Chief Investment Officer. + He is responsible for the investment strategy for all value equity portfolios, recruiting new talent, and strengthening the team's investment abilities. 4 + He has been featured in prominent publications like Barron's, Kiplinger, and MarketWatch. He has also appeared on CNBC's "Squawk Box" program. - Publisher: Squawk Box – CNBC + A daily program on CNBC focusing on business news is broadcast live from 6:00 to 9:00 AM Eastern Time, co-hosted by Joe Kernen, Becky Quick, and Andrew Ross Sorkin. + The show features early-morning analysis of and breaking news from the financial markets, questioning and giving opinions between the hosts and their guests. b) Article Analysis 1. The potential of small-cap stocks - According to Investopedia, small-cap stocks represent companies on the stock market with a total value of $250 million to $2 billion. - Over here, the interviewee explained why small-cap stocks are a good opportunity as their market capitalisation stats beat the S&P 500, which features 500 leading U.S. publicly traded companies in Figure 2 and Figure 3 Figure 2: Statistics from the small-cap stocks (Source: CNBC Television) 5 Figure 3: Statistics from S&P 500 companies (Source: CNBC Television) - Also, due to its lower market capitalisation of 3 trillion compared to 13 trillion of the Magnificent 7 (Microsoft et al.), a slight change in those extensive stocks could affect small-cap stocks immensely. This is because small-cap stocks have less liquidity (ease of buying and selling) and are more susceptible to investor sentiment. - The “Magnificent 7” term refers to Apple, Amazon, Microsoft, Google parent Alphabet, Meta Platforms, Nvidia, and Tesla, seven dominant stocks with significant gains in 2023 and 2024. 2. The situation of the stock market in 2022 to 2023 - Only a few people were interested in the market in October 2022, and they predicted the low situation would continue till the end of 2023. Surprisingly, the market skyrocketed and left everyone in the dust. - The reason why people were not interested, he explained, was because everyone was too focused on the recession and throwing out the fact that the stock value was undervalued and worth buying (good price-to-book ratio). The speaker argues that the fear of a recession can cloud investors' judgment and prevent them from recognising and capitalising on potentially valuable investment opportunities that undervalued stocks present. 3. Prediction of this year’s stock market - Overall, following a big down market in 2022, an up market is expected this year, but it could be different. - According to Investopedia, fixed-income investments have a yield sensitivity, meaning their prices can swing depending on whether interest rates rise or fall. A higher interest rate means lower fixed income and vice versa. 6 References Bamford, C. & Grant, S. (2021). Cambridge International AS and A Level: Economics. Cambridge University Press. Cekindo Business International, Ltd., & Le, J. (2023, February 15). 6 reasons to invest in Vietnam: APAC’s top emerging economy. InCorp Vietnam. https://www.cekindo.vn/blog/investing-vietnam-reasons/ CNBC Television. (2024, March 8). Investors should start paying attention to small-cap stocks, says NFJ Investment’s John Mowrey [Video]. YouTube. https://www.youtube.com/watch?v=7WQfx5uTTJo Go Global (2022, December 30). The Export Statistic of Viet Nam’s Footwear to EVFTA Partners. https://goglobal.moit.gov.vn/en/the-export-statistic-of-viet-nams-footwear-to-evfta-partners.html Hayes, A. (2023, September 9). Interest Rate sensitivity: definition, what it measures, and types. Investopedia. https://www.investopedia.com/terms/i/interest-rate-sensitivity.asp Hayes, A. (2024, January 29). Bond Yield: What It Is, Why It Matters, and How It's Calculated. Investopedia. https://www.investopedia.com/terms/b/bond-yield.asp Investment Promotion, M&A Advisory, Business Matching, Finance sourcing. (n.d.). Market Overview. Retrieved March 11, from https://ibpvietnam.com/about-us/market-overview/ Investopedia Team (2023, January 30). What are Small-Cap stocks, and are they a good investment? Investopedia. https://www.investopedia.com/terms/s/small-cap.asp’ Kenton, W. (2023, September 22). S&P 500 Index: What It’s for and Why It’s Important in Investing. Investopedia. https://www.investopedia.com/terms/s/sp500.asp Lehtonen, S., & Carson, A. C. E. (2024, March 18). Magnificent Seven stocks to buy and watch: Google, Tesla surge. Investor’s Business Daily. https://www.investors.com/research/magnificent-seven-stocks-to-buy-and-and-watch/ 9 NFJ Investment Group, LLC. (n.d.-b). Virtus Investment Partners. Retrieved March 15, from https://corporate.virtus.com/investment-partners/nfj-investment-group 10