Investment analysis means the process of judging an investment for

income, risk, and resale value. It is important to anyone who is

considering an investment, regardless of type. Investment analysis
methods generally evaluate 3 factors: risk, cash flows, and resale
value.
Risk
The first factor evaluated in any investment analysis is risk. The
reason for this is simple: if the risk of the investment is too great
then loss is quite likely. In this case, cash flows and
resale value generally do not matter because the investment is
worth nothing. Despite this, risk is not a definite factor. One must
evaluate all the factors related to the investment: market,
industry, governmental, company, and more. In this way evaluating
risk is as much of an art as a science.

Cash Flow
The second factor of investment analysis is cash flows. Cash
flows occur in many ways: dividends from a publicly traded stock,
interest payments on a bond, or even free cash flow which can be
distributed to the investors in a small business (again, in the form
of dividends). Cash flows are one of the methods of repayment on an
investment. Thus, an investor will want to evaluate cash flows to see
if they repay the investment while also repaying the
assumed value of the risk on the investment.

Resale Value
The third factor of investment analysis is resale value. Profit from
resale is made through a gain in the market value of the asset. When
the asset is sold to another investor for a value higher than the
original purchase price, profit from resale value has occurred. In the
process of investment analysis, an investor will want to measure the
expected rate of growth on the asset to make sure that the value of
this and any associated cash flowsare larger than the loss of
investment and the estimated value of the risk of the investment.
Factors for Project Success:

Overall Comprehensive Plan

A plan will give an overview of what all need to be achieved,

with details of what will be required for achieving it and checks
for what has been achieved. The plan should assess what it is
possible to achieve and also give an estimate of funds needed,
personnel needed, equipment needed and the materials
needed for completion of project.
Good Manager & Team

A capable manager leading a competent team is a vital factor

for project success. A good project manager will do the
following. Meet goals , Keep high standards , Manage within
the time allotted , Keep expenses within the budget , Adhere to
the plan, Procure materials

Well Defined Objectives

It is essential to define the clients’ needs, what goals are set up,
what the responsibilities of the various members of the team
are, and what the short-term and long-term objectives and
outcomes are. Are all materials available? Are sufficient funds
available? Are there any project-related out-sourced
services needed? All of these things should be planned.
Sufficient Funds

This is very crucial for the success of the project. What has been
conceived in the plan can happen only with the timely
availability of the funds allocated for each of the project phases.
Shortage of funds will cause undue delay of the project

Involved Stakeholders/Sponsors

It is better to keep stakeholders informed of what is happening

and what results to expect. Interested stakeholders are an
added motivation for the team to put in more effort and make
the project a great success.

Common errors in Investment Management

1 Inadequate Comprehension of Return and Risk:
Many investors have unrealistic and exaggerated expectations from
investments, in particular from equity shares and convertible
debentures. One often comes across investors who say that they hope
to earn a return of 25 to 30 percent per year with virtually no risk
exposure or even double their investment in a year or so. They have
apparently been misled.

2 Vaguely Formulated Investment Policy:

If you know what your risk attitude is and why you are investing, you
will learn how to invest well. A well articulated investment policy,
adhered to consistently over a period of time, saves a great deal of
disappointment.

3 Cursory Decision Making:

Investment decision making is characterized by a great deal of

cursoriness. Investors tend to: Base their decisions on partial
evidence or casual tips given by brokers, friends, and others .AND
Uncritically follow others because of lack of confidence in their own
judgment.

4 Simultaneous Switching:

When investors switch over from one stock to another, they often buy
and sell more or less simultaneously. For example, an investor may
sell stock A and simultaneously buy stock B. Such action assumes
that the right time for selling stock A is also the right time for buying
stock B. This may not often be so. Hence, when you contemplate
switching, you should first sell if you feel it is the right time to do so
or buy if you feel it is the right time to do so and make the other deal
at an appropriate time.
5. Over diversification and under diversification
6. Wrong attitude toward losses and profits
7. Tendency to speculate

AVOIDING THE COMMON INVESTMENT MISTAKES

1. Coordinate goals and focus on net returns.

First, make sure your team of advisors is coordinated and

everyone is on the same page when discussing your goals.
Second, don’t chase gross returns but rather net returns. Make
sure to take into consideration all of your applicable taxes for
now and also in the future.

2. Communicate closely with your advisor.

The only way to get the most from your financial advisor
is to communicate. Advisors are not mind readers. If you
feel that your advisor does not understand you and your
goals or is not giving you the advice you need, it is time to
find one who understands you.
3. Invest in different asset classes.
For novice investors, it is important to invest in simple,
diversified instruments. ETFs, commodities, real estate and
even a small percentage in cryptocurrencies would be indicative
of a well-balanced portfolio. The most common mistake that I
see is investing too heavily into a single asset class.

4. Set short- and long-term goals.

We see people accumulating money without setting any short-

and long-term goals .Disciplines in tax, estate, risk mitigation
and cash-flow planning, to name a few, work in tandem with
the investment selection process. A comprehensive financial
plan can incorporate these disciplines and improve your
financial condition.
5. Consider potential tax consequences.

The most common mistake I see in wealth management is

making portfolio decisions with no regard to the potential tax
consequences. Taxation should not be the primary
consideration of investment management, but it most certainly
needs to be a major factor when analyzing portfolio
adjustments

6. Don't let your emotions drive investments.

We all know markets can be volatile. The biggest mistake we see

people make is letting their emotions drive their investing.
Most people let their money ride the wave because they fear
they will "miss out." Too many investors have bought at highs
and sold at lows. Don't be emotional.

7. Work with a professional.

The most common mistake we see is people trying to manage

their wealth on their own, or with the guidance of friends and
family, rather than using a financial professional to help them.
Too often, clients come to us late in the planning process. Better
late than never, of course -- however, we could have done so
much more to make their money work hard for them had we a
few more years to work with

8. Stay engaged in your investments.

Many make the mistake of giving complete control of their

funds to a wealth manager and being completely disengaged
from their investments. But remember that no one is going care
more about your retirement than you. It is wise to use advisors
who can provide valuable help, but ultimately you need to
invest some time and effort to gain investment education so you
can be the one making wise investment decisions.