ALTERNATIVE MARKET ANALYSIS TOOL FOR IDENTIFYING POSSIBLE INVESTMENT OPPORTUNITIES – A REVIEW

The exploitation of investment opportunities in respect to capital markets has always been one of the main interest of financial market participants that trade and exchange different financial instruments in order to realize a possible capital gain. The type of instrument chosen and the overall investment strategy depends upon the risk tolerance and overall required returns as a matter of fact, in portfolio management theory, an Investment policy strategy(IPS) is the first step towards the allocation of funds in respect to capital markets. During the outline of an IPS, the characteristics and conditions of the prospect client (i.e. capital at disposition, required return, risk tolerance) are highlighted and taken in consideration so to be able to offer a matching service to satisfy the needs of client. In more general terms, the rapid growth, the increasing variety over the last 50 years of financial instruments united with the easiness for market participants to access financial information have led to an injection of liquidity into the markets. Financial institutions are directly involved in capital markets because of multiple reasons. First of all, they offer a vast array of services which, for example, include being intermediaries between actual exchanges and individual market participants gaining a fee(commission) in return for the services delivered. Another important role of Financial Institutions is the one related to wealth management and pension funds services. Firms, as a consequence, engage and offer specific investment plans tailored for the needs of their clients as mentioned earlier. Moreover, various financial institutions are involved in advisory roles where, always in exchange for a pre-determined fees, they provide advice and/or consulting in respect to the needs demanded by the clients