Capital Markets and Investment Banking Process Paper

1221 WordsOct 31, 20095 Pages
Capital Markets and Investment Banking Process Paper Investments banking process and capital markets are elements in understanding how to invest and be successful in the investments. In the investment backing process, investor might enlist the help of an investment banker which can help the investor with buying, selling, and trading of securities, managing assets and give financial advice. Portfolio construction is another area that should be examined to make sure that diversification, asset allocation and investment performance in being achieved for increase return. A complete understanding of capital markets is vital to the investor which can give a greater understanding on how and where investments are being processed. Investment…show more content…
31). Municipal bonds are bonds that the state or local government issues to raise funds. Corporate Bonds are issues by companies to raise funds. Equity Securities are Stock and Depository Receipts. Stock can be common or preferred. Commons stock is voting shares as preferred stock has no voting rights. Depository Receipts are like stock but are for ownership of foreign companies. Selecting an asset class to invest in is a personal choice. The investor need to exam the risk verse the return of the asset class that is chosen. The investor should also analyze the market and the economy as well. The investor’s personal needs and goals should always be part of the consideration in all investment decision. Capital Markets When an investor wants to build or construct their portfolio, the investor needs a marker where this can be accomplished. The Capital Markets have to segments which are primary markets and secondary markets. Primary markets are where securities are sold for the first time. For example, if a company decides to go public the stock of said company which is called the Initial Public Offering or IPO would be sold on the Primary markets because it has a new security. At this point is when an Investment Banker would be use to underwrite and value the stock for the company. The secondary market is where securities are sold and bought after the security has been sold on the primary market. The secondary markets are
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