Why you should clear the NCFM Investment Analysis & Portfolio Management (IAPM) certification?
To start with explaining what is this module about, I just want you to understand this wisdom statement: “Never put all your eggs in one basket”. If you understand this statement, you understand the significance of this module.
At present, just saving your money is not enough, you need to invest your hard earned money. Just investing is also not enough, you have to keep an eye on your investments. It is possible that our investment doesn’t meet our expectations. Sometimes, we have to modify or change the pattern of our investments. Also sometimes, we just need to sit back and relax and give time to our investments. We can get an idea of all these things through the NSE (National Stock Exchange of India) certification in IAPM (Investment analysis and portfolio management).
IAPM is one of the most popular NCFM Module as it is a very interesting topic in financial markets. Only investing does not serve the purpose, you have to balance your portfolio in such a manner that the mix of debt and equity gives you the optimum return.
IAPM Module provides the knowledge ranging from basics to the core of the subject. The Module broadly covers the following topics (weightage of the topics in the curriculum is mentioned in brackets)-
- Objectives of Investment Decision (9%)
- Financial Markets (13%)
- Fixed Income Securities (12%)
- Capital Market Efficiency (8%)
- Financial Analysis and Valuation (23%)
- Modern Portfolio Theory (10%)
- Valuation of Derivatives (12%)
- Investment Management (13%)
The module specifies the kind of markets and its instruments, trading in secondary markets, various techniques of time value of money including compounding and discounting, analysis of financial statements including income statement and balance sheet, dividend valuation models, valuation of common stocks using EPS, DPS, P/E Ratio, etc. The Module also covers technical analysis, which is more complex than fundamental analysis. It really requires great skills and study to understand this. Technical analysis is very important to understand the stock market trends. The module also describes some modern portfolio theories and the ratios used for analyzing the performance of the funds.It also covers the valuation of derivatives- Derivatives include forwards, futures and options.
One has to also pay heed to the kind of investments and various kinds of funds available in the market. The word ‘risk’ is a small word but possesses a big impact. The portfolio management depends upon the level of risks taken by the client and involves the measures adopted for risk mitigation or management. If one desires to invest, he needs to analyze the pros and cons of such investments. The investor can be successful only after proper analysis and diversified portfolio which balances the risks and returns. The Investment Analysis and Portfolio Management is a continuous process, it is not a one time task, you need to stay updated always!
It is very essential to know the aforesaid things and hence any candidate desiring to provide the investment related services should get certified in this module. The passing criteria and marking system is similar to various other NCFM modules. One needs to be careful while selecting the answers in multiple choice questions. Utilize all the provided time wisely. Be cautious while selecting the correct option. While studying, make a note of all the formulae contained in the various chapters for quick revision before exams. Also if you are trying to grab the NCMP (NSE certified market professional) certification, then this module is eligible for fulfilling the criteria. And this is a prestigious certification for any aspirant. So just go for it. All the very best in your attempt!
We hope you enjoyed this article. For regular updates from the world of financial markets, subscribe us via email and we will deliver our next article, right in your mailbox!