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INTRODUCTION:
Capital is a crucial factor in the development of an economy. The pace of
economic development is conditioned, among other things, by the rate of
capital formation. And capital formation is conditioned by the mobilization
and channelization of investible funds. The role of the financial system is to
channel funds from surplus sectors to deficit sectors. Facilitating such flows
on a national level increases the level of investment and effective demand
and thus accelerates economic development.
Capital market development has been closely related to an economy's
overall development. At low levels of development, commercial banks tend
to dominate the financial system. As an economy develops, the indirect
lending by savers to investors tends to become more efficient. As economy
grows further, specialialised financial intermediaries and securities markets
develop. As securities markets mature, investors, especially individual
investors, can invest their funds directly in financial assets issued by firms.
There are number of financial assets or investment avenues are available
in India. Each investment alternative has its own strengths and weaknesses.
Some options seek to achieve superior returns but with corresponding higher
risk. Other provide safety but at the expense of liquidity and growth. Other
options such as FDs offer safety and liquidity, but at the cost of return.
Mutual funds seek to combine the Advantages of investing in arch of these
alternatives while dispensing with the shortcomings. Indian stock market is
semi-efficient by nature and, is considered as One of the most respected
stock markets, where information is quickly and widely disseminated,
thereby allowing each security's price to adjust rapidly in an unbiased
manner to new information so that, it reflects the nearest investment value.
Savings form an important part of the economy of any nation. With the
savings invested in various options available to the people, the money acts as
the driver for growth of the country. Indian financial scene too presents a
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Investors’ perception towards investment avenues
plethora of avenues to the investors. Though certainly not the best or deepest
of markets in the world, it has reasonable options for an ordinary man to
invest his savings.
One needs to invest and earn return on their idle resources and generate a
specified sum of money for a specific goal in life and make a provision for
an uncertain future. One of the important reasons why one needs to invest
wisely is to meet the cost of inflation. Inflation is the rate at which the cost
of living increases. The cost of living is simply what it cost to buy the goods
and services you need to live. Inflation causes money to lose value because it
will not buy the same amount of a good or service in the future as it does
now or did in the past. The sooner one starts investing the better. By
investing early you allow your investments more time to grow, whereby the
concept of compounding increases your income, by accumulating the
principal and the interest or dividend earned on it, year after year.
PROBLEM STATEMENT:
This project attempts to know the preferences and analyze the
significance of demographic factors that influence the investor's decision
towards making investments. This study attempts to find out the significance
of demographic factors of population such as gender, age, education,
occupation, income, savings and family size over several elements of
investment decisions like priorities based on characteristics of investments,
period of investment, reach of information source, frequency of investment
and analytical abilities. The hypotheses have been developed considering its
relevancy to the research objectives. Investment decision making behavior in
risky situation has been taken as dependent variable. Demographic factors
(age and gender) are considered as independent variables. Risk perception
considered as mediators. Individuals’ risk preferences are taken as an
intervening variable between demographic factors and risk perception. Data
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were classified; tabulated and tested Statistical inferences were drawn by the
use of Hypothesis and Pearson's Chi-square technique.
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HYPOTHESIS:
There is no significant relation between risk tolerance level and
gender.
There is no significant relation between risk tolerance level and age
group.
There is no significant relation between risk tolerance level and
income level.
LITERATURE REVIEW:
Behavioral finance is a new emerging science that studies the irrational
behavior of the people. Vanish Kumar Singh (2006) the study entitled
"Investment Pattern of People" has been undertaken with the objective, to
analyze the investment pattern of people in diversified city analysis of the
study was undertaken with the help of survey conducted .After analysis and
interpretation of data it is concluded those investors are more aware about
various investment avenues & the risk associated with that. All the age
groups give more important to invest in equity &except people those who are
above 50 give important to insurance, fixed deposits and tax saving benefits.
Generally those investors, who are invested in equity, are personally follow
the stock market frequently i.e. in daily basis. But those who are invested in
mutual funds are watch stock market weekly or fortnightly. Major investors
are more aware about various investment avenues and the risk associated
with that. But many investors are more conservative in nature and they
prefer to invest in those avenues where risk is less like bank deposits, small
savings, and post office savings etc.
Sudalaimuthu and senthil Kumar (2008) Mutual fund is the one of
investment avenues the researcher research in this area about investors
perception towards mutual fund investments has been analyzed effectively
taking into account the investors reference towards the mutual fund sector,
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Sample Technique:
Convenience sampling technique has used for collecting the data from
different investors. The investors are selected by the convenience sampling
method. The selection of units from the population based on their easy
availability and accessibility to the researcher is known as convenience
sampling. Convenience sampling is at its best in surveys dealing with an
exploratory purpose for generating ideas and hypothesis.
Sample Unit:
The respondents who asked to fill out the questionnaires are the sampling
units. These comprise of students, salaried employees, Business people,
Home Maker, Professionals, Retired persons and other investor in Mangalore
city.
Sample Size:
The sample size was 100, which comprised of people from Mangalore
city.
Primary Data:
Information is collected by conducting a survey by distributing a
questionnaire to 100 investor in Mangalore city. These investors are of
different age group, different occupation, different income levels, and
different status (Married or not)
Secondary Data:
This data is collected by using the following means.
1. Investment Magazines, Business Magazines, Financial chronicles.
2. Expert’s opinion published in various print media.
3. Data available on internet through various websites
4. Books
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Few respondents are not willing to express their opinion and views on
their investment and have expressed common view on investment
practices.
The lack of knowledge of customer about the financial instrument can
be a major limitation
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Investor’s Behaviour:
Investor’s behavior refers to the selection, purchase and consumption of
goods and services for the satisfaction of their wants. There are different
processes involved in the investor behavior. Initially the investor tries to find
what securities he would like to consume, then he selects only those security
that promise greater utility. After selecting the security, the investor makes
an estimate of the available money which he can spend. Lastly, the investor
analyzes the prevailing prices of security and takes the decision about the
security he should consume.
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the stock markets. This paper reveals that demographic factors have an
impact on retail investors' investment decisions. Consumer behavior is
deeply influenced by cultural factors such as: buyer culture, sub culture, and
social class.
Culture: Basically, culture is the part of every society and is the important
cause of person wants and behavior. The influence of culture on buying
behavior varies from country to country therefore marketers have to be very
careful in analyzing the culture of different groups, regions.
B. Psychological Factors:
There are four important psychological factors affecting the consumer
buying behavior. These are: perception, motivation, learning, beliefs and
attitudes.
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INVESTORS’ PERCEPTION:
Perception is the process of attaining awareness or understanding of the
environment by organizing and interpreting sensory information. All
perception involves signals in the nervous system, which in turn result from
physical stimulation of the sense organs. Investor perception about an
investment would mean how the investor envisions or sees the different
investment avenues. Knowledge of Investor Perception is important because
the perceptions of investors can influence the investment pattern and his
investment behavior like risk tolerance level, investment preference on the
basis of occupation, marital status etc. So in order to know the perception of
individual investor we have to know the behavior of individual investor and
what risk is and factors which influence investment decision.
Even though the fundamental investment rules and principles remain the
same, investment climate and investor behavior change from time to time
and place to place. Individual investor behavior in the capital market is
factored by their income, education, reading habits, cognition levels, etc.
Investor preferences differ with respect to alternative investment avenues,
assets and market segments in the securities market. The track records of
companies and of the promoters have a telling influence on investment
decisions. The investment motives also vary through capital gains,
dividends, bonus, rights, tax benefits and other relevant factors.
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Investor Behaviour:
Economists have developed behavioral models to explain the decision-
making process of individuals. The interdependence of the inherent risk and
uncertainty about any course of action are provided by the theory of games.
Game theorists call the stock market a `positive sum game'. But the money
game of the stock market may not yield uniform returns to all its
participants. There are various investment avenues. When one investment
opportunity is chosen, other opportunities may be given up. So, opportunity
cost of an investment is the possible income from the next best alternative.
Rational decision-making demands technical knowledge and practical
experience. Investor behaviour approaches investing as a rational decision -
making process in which the investor attempts to select a portfolio of
securities. Rational investors form rational expectations about asset returns,
motivated by the maximising principle. They collect available and relevant
information for making decisions. Some investors make decisions on
inadequate information and such decisions may go wrong.
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Greed
Hope
Selling on balance
Buying aggressively
Buying on Panic Selling on balance
balance selling
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1. Return Factor:
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Genuine investors are those who always try to seek equilibrium between
risk and return. How do investors make an assessment about the return on
securities? What return is expected on an average? It is the expected value of
the return, which is the sum of each possible return multiplied by the chance
of its occurrence. The sum of the chances must add up to one. (Barua, et al
227)
If the return on a security is expected to be r, with a chance of p1 with a
chance of p2, and rn, with a chance of pn, then the overall assessment of
investors is based on the expected value of returns, which is computed as:
Expected Return, E = P1 r1 + P2 r2 +...+ Pn rn
Whereas the overall portfolio return would be the weighted average of
expected return on securities and is computed as:
EP =W, xEl +W2 xE2+...+WnxEn
Genuine investors, by and large, hold medium and long- term investments
and the return aspect assumes larger importance. There are two types of
security analysis, namely, Technical Analysis and Fundamental Analysis.
The technical analysts believe that important information about future
stock price movements can be obtained by studying the historical price
movement of stock prices. Financial data are recorded on graph paper and
the data are scrutinized in search of respective patterns and then deduced
from that pictured history the probable future trend.
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Fundamental analysts believe that the true intrinsic value of a security can
be ascertained by studying such items as the company's earnings, its
products, its management, financial statements and other fundamental facts.
The present value of future dividends, computed at an appropriate discount
rate to reflect the real return from the share, is called the intrinsic or
fundamental value of the share. The analysts attempt to find under-priced or
over-priced shares for the investors' investment decisions.
2. Liquidity Factor
A security must possess the attribute of liquidity to be attractive as an
investment for the ordinary investors. Liquidity refers to easy convertibility
without loss. Liquidity of an investment is measured in terms of the speed
and ease with which an investment can be converted in to cash whenever the
investor wants it. Liquid investments give the investor a feeling of security
because they enable one to change one's mind and correct one's mistakes.
A genuine investor is supposed to invest for a relatively long period for
the sake of income as distinguished from a purely trading profit arising from
short-run price fluctuations induced by shifts in market sentiments. A
prudent long term investor would have provided for his immediate cash
needs by holding cash balances and near cash assets like fixed deposits and
only if he has surplus of cash, would he consider it wise to hold long term
investment such as equities. This assumption is in argument with the usual
threefold classification of the motives of holding liquid cash viz., the
transaction motive, the precautionary motive and the speculative motive. If
so, a genuine investor would normally expect moderate liquidity and not
'instant' liquidity.
A prudent investor should be prepared to tide over prolonged periods of
stock market depression, which no amount of liquidity can eliminate. It is the
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3. Risk Factor:
The words 'risk' and ‘uncertainty’ are used inter - changeably. But
technically their meanings are different. Risk suggests that a decision- maker
know possible consequences of a decision and their likelihood at the time he
makes the decision. Uncertainly on the other hand, involves a situation about
which the likelihood of the possible outcomes is not known. On the basis of
the degree of risk perception, investors could be classified into risk takers,
risk averters and risk neutrals.
The risk takers pay more than the expected value of an asset or an
uncertain future and mostly invest in common stocks and convertible
securities. Risk averters show their preference for investments of low risk
and prefer Government securities, insurance policies, unit trust certificates,
etc. Risk neutrals are willing to pay for making an investment provided they
get a return of an equal value. The majority of the investors accept medium
risk.
Securities that have risk and return characteristics of their-own, in
combination makes up a portfolio. Portfolio selection entails choosing the
one best portfolio to suit the risk-return preferences of the investor. And
portfolio management is the dynamic function of evaluating and revising the
portfolio in terms of stated investor objectives (Fischer &Jordan 2).
In academic parlance, the mathematical measure of investment risk is
called ‘beta’. The market as a whole has a `beta ' of one. If a particular stock
has a ‘beta’ of two then it is twice as risky as the market. It means that if the
market goes up by 20 per cent, the stock price rises by 40 per cent, and if the
market falls by 20 per cent, the stock price falls by 40 per cent. High `beta'
stocks are considered more risky than low beta stocks.
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People who believe that `beta' measures risk, disdain examining what a
company produces or may even prefer not to know the company's name .
The true investor is risk averse but may welcome volatility. The more
volatile a market becomes, the more the opportunities to the value oriented
investor (Bakshi 36).
4. Investment Horizon:
Investment horizon is the total length of time that an investor expects to
hold a security or portfolio. The investment horizon is used to determine the
investor’s income needs and desired risk exposure, which is then used to aid
in security selection.
5. Tax Exposure:
Investors in higher tax brackets prefer such investments where the return
is tax exempt, others will have no such preference.
6. Market Trends:
You need to understand how various asset classes have performed in the
past before planning your finances.
7. Investment Needs:
How much money do you need at the time of maturity? Purpose of
investment also influences the investment decision of investor. Some people
invest their funds in such avenues where they can get tax benefits.
8. Risk Coverage:
A type of insurance coverage that can exclude only risks that have been
specifically outlined in the contract.
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9. Dependents:
People who relies on another person, especially a family member, for
financial support. More number of dependents have more responsibility
therefore they invest in such avenues which have low risk.
Risk:
The word ‘risk’ has a definite financial meaning. It refers to possibility of
incurring a loss in a financial transaction. In a broad sense, investment is
considered to involve limited risk and is confined to those avenues where the
principal is safe. ‘Speculation’ is considered as an involvement of funds of
high risk. An example may be cited of stock brokers’ lists of securities which
labels and recommends securities separately for investment and speculation
purposes. Risk, however, is a matter of degree and no-clear-cut lines of
demarcation can be drawn between high risk and low risk and sometimes
these distinctions are purely arbitrary. No investments are completely risk
free. Even if it safety of principal and interest are considered, there are
certain non manageable risk which are beyond the scope of personal power.
These are (a) the purchasing power risk-In other words, it is the fall in real
value of the interest and the principal and (b) the money rate risk or the fall
in market value when interest rate rises.
These risks affect both the speculator and the investor. High risk and low
risk are, therefore, general indicators to help and understanding between the
terms investments and speculation.
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corporate shares or bonds, Chit funds, Niches; Benefit funds etc. are
highly risky, as they are in the unorganized sector. Some instruments
as bank deposits or P.O Certificates are less risky, due to their certainty
of payment of principal and interest.
4) Creditworthiness of the issuer: The securities of Government end
semi-Government bodies are more credit worthy than those issued by
the corporate sector and much less secure are those in the unorganized
sector like indigenous bankers, shroffs,chit funds etc, Private limited
companies share and shares of unlisted companies are more risky.
5) Maturity period are length of investment: The longer the period, the
more risky is the investment normally.
6) Amount of investment: The higher the amount invested in any security
the larger is the risk, while a judicious mix of investment in small
quantities may be less risky.
7) Method of investment, namely, secured by collateral or not.
8) Terms of lending such as periodicity of servicing, redemption periods
etc.
9) Nature of the industry or business in which the company is operating.
10) National and international factors, acts of god etc.
Generally there are two types of investment risk they are as follows,
• Systematic Risks
• Unsystematic Risk
I. Systematic Risk:
Systematic Risk is out of external and uncontrollable factors, arising out
of the market, nature of the industry and state of the economy and a host of
other factors. In other words systematic risk refers to that portion of the total
variability of the return caused by common factor affecting the prices of all
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Financial risk:
This relates to method of financing, adopted by company, high
leverage leading to larger debt serving problems or short term liquidity
problems due to bad debts, delayed receivables and fall in current
asserts or rise in current liabilities. These problems could no doubt to
be solved, but they m may lead to fluctuations in earnings, profits and
dividends to share holders. Sometimes, if the company runs in two
losses or reduced profits, these may lead to fall in returns to investors
or negative returns. Proper financial planning and other financial
adjustments can be used to correct this risk and as such it is
controllable.
Other risk:
In addition to the above major risks both in controllable and
uncontrollable categories, there are many more risks, which can be
listed, but in actual practices, they may vary in form, size and effect.
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Management risks:
Management risks, due to errors are inefficiencies of management,
causing losses to the company.
Marketability risks:
Marketability risks, involving loss of liquidity or loss of value in
conversions from one asset to another say, from stocks to bonds, or
vice versa. Such risky may arise due to some feature of securities,
such as capability; or lack of sinking fund or debenture redemption
reserve fund,, for repayment of principal or due to conversion terms,
attached to security, which may go adverse to the investor.
All the above types of risks are of varying degrees, resulting in
uncertainty or variability of return, loss of income and capital losses,
or erosion of real value of income and wealth of the investor.
Normally the higher risk taken, the higher is the return. But sometimes
the risk is caused by acts of God and there may be no return at all.
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Investor:
Investor is a person or an organization that money in various investment
sources for specific objective. Attitude of investment is different in each
alternative. E.g. financial market have different attitude towards risk and
return. Some investor is averse, while some have an affinity of risk. The risk
bearing capacity of investor is a function of personal, econopmical,
environment, and situational factors such as income, family size, expenditure
pattern, and age. A person with higher income is assumed to have higher
risk-bearing capacity. Thus investor can be classified as risk skiers, risk
avoiders, or risk bearers.
Categories of investors:
While there are as many investing style as there are investors, most
people fall more or less into one of three broad categories: Conservative,
moderate, aggressive.
Conservative investors:
Generally, conservative investor feel that safeguarding what they have is
their top priority. These investors want to avoid risk-particularly the risk of
losing any principal (their original investment)- even if that means they’ll
have to settle for very modest returns.
Conservative investors allocate most of their portfolios to bonds, such as
treasury notes or high-rated municipal bonds, and cash equivalents, such as
CDs and money market accounts. They’re generally reluctant to invest in
stocks, which may lose value, especially over the short term. When
conservative investors do venture into stocks they’re often inclined to choose
blue chips or other large-cap stocks with well-known brands because they
tend to change value more slowly than other types of stock and often pay
dividend income.
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Moderate investors:
Moderate investor wants to increase the value of their portfolios while
protecting g their assets from the risk of major losses.
For example, a moderate investor might use an allocation model that has
60% in stock, 30% in bonds, and 10% in cash equivalents. While they will
tend to favor blue chip and other large-cap stocks, they may be willing to
invest a modest portion of their principal in higher risk securities-such as
international stock, small-caps, and volatile sector funds-in order to increase
their potential for higher returns.
Aggressive investors:
Aggressive investors concentrate on investments that have the potential
for significant growth. They are willing to take the risk of losing some of
their principal, with the expectation that they will realize greater returns.
Aggressive investors might allocate from 75 to 95% of their portfolios to
individual stocks and stock mutual funds. While large and small-cap stocks
and funds may make a long-term commitment to the stocks they buy. But
history has shown that an aggressive investing approach, combined with a
well diversified portfolio, and the patience to stick to a long-term buy-and-
hold investing strategy through inevitable market downturns, can be the most
profitable in the long run.
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uncertainty about the actual return, time of waiting and cost of getting back
funds, safety of funds, and risk of the variability of return. For making
proper investment involving both risk and return, the investor has to make a
study of the alternative avenues of investment their risk and return
characteristics and make proper projection or expectations of his preferences.
Investing is a term with several closely-related meanings in business
management, finance and economics, related to saving or deferring
consumption. An asset is usually purchased, or equivalently a deposit made
in a bank, in hopes of getting a future return or interest from it.
“An investment is a commitment of funds made in the expectation of
some positive return. If the investment is properly undertaken, the returns
will be commensurate with the risk the investor assumes” – (Donald
E.Fischer and Ronald J.Jordon).
Investment is “the purchase by an individual or institutional investor of a
financial or real asset that produces a return in proportion to the risk assumed
over some future investment period” – (F.Amling).
Classification of Investments:
Investment can be classified as financial investment and economic
investment.
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goods and services which are used in the production of goods and services
which are used in the production of other goods and services.
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Investors’ perception towards investment avenues
provide assistance to all India projects and regional projects. The state level
bodies promote industrial growth in the respective states. Investment
institutions include UTI, LIC, and GIC etc. Apart from these, commercial
banks accept deposits from the public and make them available for
productive use. These financial institutions encourage capital formation
which is essential for savings and investment.
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e) Modes of Investment:
There are different types of securities conferring different sets of rights
on the investors and different sets of conditions under which these rights can
be exercised. The various avenues for investment, ranging from risk less to
high risk investment opportunities consist of both security and non security
forms of investment. All securities listed below are marketable.
1. Private Sector
2. Life Insurance Policies
3. Post Office savings bank accounts:
a) Recurring
b) Time
c) Monthly Income Scheme
d) Senior citizen savings scheme
4. Real Estate Investment
5. Gold, Silver
6. Others:
a) Kisan Vikas Patra
b) Chits, Nidhis etc
f) Objectives of Investment:
The options for investing and savings are continually increasing, yet
every single investment vehicle can be easily categorized according to three
fundamental characteristics - safety, income and growth - which also
correspond to types of investment objectives. While it is possible for an
investor to have more than one of these objectives, the success of one must
come at the expense of others. The objectives of investment are listed below:
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i) Safety:
Perhaps there is truth in the axiom that there is no such thing as a
completely safe and secure investment. Yet one can get close to ultimate
safety for our investment funds through the purchase of government-issued
securities in stable economic systems, or through the purchase of the highest
quality corporate bonds issued by the economy's top companies. Such
securities are arguably the best means of preserving principal while receiving
a specified rate of return. The safest investments are usually found in the
money market and include such securities as Treasury bills (T-bills),
certificates of deposit, commercial paper or bankers' acceptance slips; or in
the fixed income (bond) market in the form of municipal and other
government bonds, and in corporate bonds. The securities listed above are
ordered according to the typical spectrum of increasing risk and, in turn,
increasing potential yield. To compensate for their higher risk, corporate
bonds return a greater yield than T-bills.
ii) Income:
However, the safest investments are also the ones that are likely to have
the lowest rate of income return or yield. Investors must inevitably sacrifice
a degree of safety if they want to increase their yields. Here is an inverse
relationship between safety and yield: as yield increases, safety generally
goes down, and vice versa. Most investors, even the most conservative-
minded ones want some level of income generation in their portfolios, even
if it's just to keep up with the economy's rate of inflation. But maximizing
income return can be an overarching principle for a portfolio, especially for
individuals who require a fixed sum from their portfolio every month. A
retired person who requires a certain amount of money every month is well
served by holding reasonably safe assets that provide funds over and above
other income-generating assets, such as pension plans.
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h) Investment Process:
Generally the investment process can be analysed in four stages namely,
i) Investment Policy ii) Investment analysis iii) Valuation of securities and
iv) Portfolio construction.
i) Investment policy: The first and foremost stage in the investment process
is the preparation of a suitable investment policy. Before investing, the
investor should carefully decide the objectives of investment. The objectives
of investment may relate to return, capital appreciation, safety, liquidity,
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hedge against inflation and tax planning. So, the investor should be aware of
the available options and their potential to fulfil his investment objectives.
Practically, no two investments are totally identical in their capacity to fulfil
an investor’s expectations. Only through an evaluation of objectives, the
investor can realize his objectives. If the investor stresses liquidity and safety
of investment, he should compromise on potential return. When investor’s
wealth is growing and when he also becomes liable to taxation, tax saving
investments are advisable for him.
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assets. The individual has so many assets to choose from, and the amount of
information available to the investors is staggering and continually growing.
Furthermore, inflation has served to increase awareness of the importance of
financial planning and wise investing. Important fallout one can expect due
to rising inflation is higher interest rates. The central banks aims to reduce
demand in the economy by raising the cost of money. When making fresh
investments or evaluating existing holdings in potentially inflationary times
one has to keep two things in mind, the possibility of higher interest rates
and the erosion in the value of the currency. It is an added advantage that
conventional investments help us save on tax. Section 80C and 80CCF and
that we provide for tax deduction on certain investments such as the
Employees' Provident Fund (EPF), Public Provident Fund (PPF), Unit
Linked Insurance Plan (ULIP), National Savings Certificate (NSC), Tax
saver Bank Deposits (FD) and Equity Linked Saving Scheme (ELSS)
Insurance products and the like. Apart from providing decent and stable
returns these savings options also help to plan and save tax. However, the
aggregate of deductions under section 80C and 80CCC cannot exceed
Rs.100,000. There are number of investment avenues available. They are as
follows :
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8%. It can be done in any Head post office or selection grade sub post office
or in any nationalized bank. Any individual above 18 years can invest in PPF
schemes. The amount invested must be minimum of Rs.500/- and maximum
of Rs.70, 000 p.a. One can avail loan from the 3rd year to 6th year upto 25%
of the amount available in the preceeding second year, one withdrawal
during any one year at any time after 6 years. The amount of withdrawal is
limited upto the 50% of the balance on credit. Nomination facility is
available. Interest is fully exempted from tax. Balance in the PPF account is
completely exempted from wealth tax. The account can be extended for any
block period of 5 years; the entire interest income earned is exempt from tax.
Investment in EPF can be made by way of a monthly contribution from
salary. The amount contributed is 12% of the total of basic salary and
dearness allowance. Over and above this 12%, some companies allow their
employees, with certain ceilings (a certain amount above which money can't
be invested), to contribute an additional amount towards EPF. EPF serves as
a retirement planning tool for many of those who do not have any structured
pension plan covering them. The account can be opened by an individual in
his own name, on behalf of a minor of whom he is a guardian, or by a Hindu
Undivided Family. Maximum number of deposits is twelve in a financial
year. The account matures for closure after 15 years. Account can be
continued with or without subscriptions after maturity for block periods of
five years. Premature withdrawal is permissible every year after completion
of 5 years from the end of the year of opening the account. Loans from the
amount at credit in PPF amount can be taken after completion of one year
from the end of the financial year of opening the account and before
completion of the 5th year.
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Investors’ perception towards investment avenues
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Investors’ perception towards investment avenues
amount invested and interest accruing under Section 88 of Income Tax Act,
as amended from time to time.
iii) Recurring Deposit: The Recurring deposit account can be opened at any
post office Period of maturity of account is 5 years. Sixty equal monthly
deposits shall be made in an account in multiples of Rs. 5 subject to a
minimum of ten rupees. Premature closure of accounts is permissible after
expiry of three years. In case of premature closure of account, the interest at
the rate applicable to post office savings account shall be payable.
iv) Kisan Vikas Patra (KVP): It is a popular scheme operated by post
offices. This has a face value of Rs.100, Rs.1, 000, Rs.5, 000 and Rs.10, 000
and gives compound interest. The investment doubles in 8 years and 7
months. The encashment of the Kisan Vikas Patra is permitted after the
holding period of 2 years and 6 months. Individuals and trusts can purchase
these investments and these instruments are not transferable from one person
to another.
v) Post Office Time Depostis (POTD): Fixed deposits are accepted by Post
offices for a period varying between 1 and 5 years. Depending upon the
period of deposit, the interest offered by the POTD varies between 6.25%
and 7.50%. (1st year 6.25%, 2nd year 6.50%, 3rd year 7.25% and 4th year
7.50%).
vi) Deposit schemes for retired Govt. employees or Public sector
undertaking (DSRGE /DSRPSU): Under the above scheme, the retired
employees from Govt. Service and Public sector undertakings can open an
account in certain nationalized banks like SBI, situated in the district
headquarters. It carries an interest of 7% and Retirement benefits can be
invested within 3 years from the date of retirement.
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Investors’ perception towards investment avenues
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Investors’ perception towards investment avenues
Advantages of ELSS:
Maturity period of NSC is 6 years and PPF is 15 years while that of
ELSS is 3 years. So with a lesser lock-in period, one can withdraw the
amount
Earning potential is very high as it is an equity linked scheme.
Investor gains money during the lock-in period and also has the
option of dividend.
Systematic Investment Plan is a part of ELSS.
Accident death cover insurance is offered in some ELSS funds.
NSC and PPF gives return of 8% and ELSS gives return of 30-40%.
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Investors’ perception towards investment avenues
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Investors’ perception towards investment avenues
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Investors’ perception towards investment avenues
interest) etc. Bank deposits are fairly safe because banks are subject to the
control of the Reserve Bank of India.
Features:
Bank deposits are fairly safe because banks are subject to the control of
the Reserve Bank of India (RBI) with regard to several policy and
operational parameters. The banks are free to offer varying interests on fixed
deposits of different maturities. Interest is compounded once in a quarter,
leading to a somewhat higher effective rate. The minimum deposit amount
varies with each bank. It can range from as low as Rs.100 to an unlimited
amount with some banks. Deposits can be made in multiples of Rs.100/-.
Before opening a FD account, it is good to check the rates of interest in
different banks for different periods. It is advisable to keep the amount in
five or ten small deposits instead of making one big deposit. In case of any
need for premature withdrawal then only one or two deposits need be
prematurely encashed. The loss sustained in interest will, thus, be less than if
one big deposit were to be encashed or it is better to borrow. Check deposit
receipts carefully to see that all particulars have been properly and accurately
filled in. The thing to consider before investing in an FD is the rate of
interest and the inflation rate. A high inflation rate can simply chip away real
returns.
Returns:
The rate of interest for Bank Fixed Deposits varies between 4 and 11 per
cent, depending onthe maturity period (duration) of the FD and the amount
invested. Interest rate also varies between banks. A Bank FD does not
provide regular interest income, but a lump-sum amount on maturity. Some
banks have facility to pay interest every quarter or every month, but the
interest paid may be at a discounted rate in case of monthly interest. The
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Investors’ perception towards investment avenues
Advantages:
Bank deposits are the safest investment after Post office savings because
all bank deposits are insured under the Deposit Insurance & Credit
Guarantee Scheme of India. It is possible to get loan up to 75- 90% of the
deposit amount from banks against fixed deposit receipts. The interest
charged will be 2% more than the rate of interest earned by the deposit, with
effect from A.Y. 1998-99, investment on bank deposits, along with other
specified incomes, is exempt from income tax up to a limit of Rs.12, 000/-
under Section 80L. Also, from A.Y. 1993-94, bank deposits are totally
exempt from wealth tax. The 1995 Finance Bill Proposals introduced tax
deduction at source (TDS) on fixed deposits on interest incomes of Rs.5000/-
and above per annum.
Procedure:
One can open a FD account at any bank, be it nationalised, private, or
foreign. However, some banks insist that the customers must maintain a
savings account with them to operate a FD. When a depositor opens an FD
account with a bank, a deposit receipt or an account statement is issued to
him or her, which can be updated from time to time, depending on the
duration of the FD and the frequency of the interest calculation.
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Investors’ perception towards investment avenues
X. Shares:
The capital of the company can be divided into different units with
definite value called shares. Holders of these shares are called shareholders
or members of the company. There are two types of shares which a company
may issue (i) Preference Shares (ii) Equity shares.
(i) Preferences Shares:
Shares which enjoy the preferential rights as to dividend and repayment
of capital in the event of winding up of the company over the equity shares
are called preference shares. The holder of preference shares will get a fixed
rate of dividend. Preference shares may be,
Cumulative Preference Shares: If the company does no earn adequate
profit in any year, dividends on preference shares may not be paid for that
year. But if the preference shares are cumulative such unpaid dividends on
these shares go on accumulating and become payable out of the profits of the
company, in subsequent years. Only after such arrears have been paid off,
any dividend can be paid to the holder of quality shares. Thus a cumulative
preference shareholder is sure to receive dividend on his shares for all the
years our of the earnings of the company.
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Investors’ perception towards investment avenues
shareholders obtain return on their capital in two forms (i) fixed dividend (ii)
share in excess of profits.
Non Participating Preference Shares: Those preference shares which do
not carry the right of share in excess profits are known as non-participating
preference shares.
(ii) Equity Shares:
Equity shares will get dividend and repayment of capital after meeting
the claims of preference shareholders. There will be no fixed rate of dividend
to be paid to the equity shareholders and this rate may vary form year to
year. This rate of dividend is determined by directors and in case of larger
profits; it may even be more than the rate attached to preference shares. Such
shareholders may go without any dividend if no profit is made.
XI. Bond/Debentures:
A debt investment in which an investor loans money to an entity
(corporate or governmental) that borrows the funds for a defined period of
time at a fixed interest rate. Debentures are divided into different categories
on the basis of: (i) Convertibility of the instrument (ii) Security.
i) On the basis of convertibility debentures can be classified into:
Non Convertible Debentures (NCD): These instruments retain the debt
character and cannot be converted in to equity shares.
Partly Convertible Debentures (PCD): A part of these instruments are
converted into equity shares in the future at notice of the issuer. The
issuer decides the ratio for conversion. This is normally decided at the
time of subscription.
Fully convertible Debentures (FCD): These are fully convertible into
Equity shares at the issuer's notice. The ratio of conversion is decided
by the issuer. Upon conversion the investors enjoy the same status as
ordinary shareholders of the company.
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managed mutual funds. Several studies show that, over time, the average,
actively managed fund has under performed the overall stock market. Still,
by picking funds with good long-term track records, managers trust and low
expenses, investors can build a portfolio with the potential for steady, long-
term returns that match their own investment goals and tolerance for risk.
Liquidity – the ability to readily access your money -- is another benefit of
mutual funds. Funds can be sold on any business day at that day's closing
price – or at the following day’s close if the sell order is placed after the
market closes. The price per share at any given time is known as the net asset
value, or NAV, which is the current market value of all the fund's assets,
minus liabilities, divided by the total number of outstanding shares. As new
investors buy into a fund, the number of outstanding shares goes up, as does
the market value of assets, but the NAV remains the same.
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Investors’ perception towards investment avenues
short-term bonds.
7. Growth funds: Growth funds are mutual funds that target at capital
appreciation by investing in growth stocks.
8. Exchange traded funds: Exchange Traded Funds (ETFs) are a basket
of securities being traded on an exchange, just similar to that of a
stock. They are not like the conventional mutual funds.
9. Sector funds: These funds are funds that restrict the investments to a
specific segment or sector.
10. Index funds: An index fund aims to replicate the actions of an index
of a specific financial market.
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Investors’ perception towards investment avenues
The government and the SEBI (Securities and Exchange Board of India) are
planning to bring in legislations for the smooth functioning of the real estate
market in India. With Initial Public Offers (IPO’s) streaming in from various
listed real estate companies, it will be the best time to have REIT which can
help capture the current boom in the real estate market. Various online real
estate investment sites have also emerged in the last decade as fallout of the
surge in realty business. Real estate investing involves the purchase,
ownership, management, rental and/or sale of real estate for profit.
Improvement of realty property as part of a real estate investment strategy is
generally considered to be a sub-specialty of real estate investing called real
estate development. Real estate is an asset form with limited liquidity
relative to other investments, it is also capital intensive (although capital may
be gained through mortgage leverage) and is highly cash flow dependent. If
these factors are not well understood and managed by the investor, real estate
becomes a risky investment. The primary cause of investment failure for real
estate is that the investor goes into negative cash flow for a period of time
that is not sustainable, often forcing them to resell the property at a loss or go
into insolvency. A similar practice known as flipping is another reason for
failure as the nature of the investment is often associated with short term
profit with less effort. Real estate markets in most countries are not as
organized or efficient as markets for, more liquid investment instruments.
Individual properties are unique to themselves and not directly
interchangeable, which presents a major challenge to an investor seeking to
evaluate prices and investment opportunities. For this reason, locating
properties in which to invest can involve substantial work and competition
among investors to purchase individual properties may be highly variable
depending on knowledge of availability. Information asymmetries are
commonplace in real estate markets. This increases transactional risk, but
also provides many opportunities for investors to obtain properties at bargain
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• The investor who has invested his money in the form of real estate
cannot immediately realize his money.
In view of these limitations, investor while buying the real estate should
take the following precautions:
• The investor should ensure that the plots which he intends to buy are
approved by the local authority.
• The investor should be convinced that there is a possibility of capital
appreciation in real estate.
• The investor should seek proper legal advice with regard to the title
deeds of the real estate. To ensure that it is free from encumbrances,
he should get an encumbrance certificate for the latest 15 years from
the Registrar office.
• The investor should verify the correctness of the plinth area in the
case of a flat.
XV. Gold:
Of all the precious metals, gold is the most popular as an investment.
Investors generally buy gold as a hedge or harbor against economic,
political, or social fiat currency crises (including investment market declines,
burgeoning national debt, currency failure, inflation, war and social unrest).
The gold market is subject to speculation as are other markets, especially
through the use of futures contracts and derivatives. The history of the gold
standard, the role of gold reserves in central banking, gold's low correlation
with other commodity prices, and its pricing in relation to fiat currencies
during the 2007–2012 global financial crisis, suggest that gold behaves more
like a currency than a commodity. Gold has been used throughout history as
money and has been a relative standard for currency equivalents specific to
economic regions or countries, until recent times. Many European countries
implemented gold standards in the latter part of the 19th century until these
were temporarily suspended in the financial crises involving World War I.
After World War II, the Bretton Woods system pegged the United States
dollar to gold at a rate of US$35 per troy ounce. The system existed until the
1971 Nixon Shock, when the US unilaterally suspended the direct
convertibility of the United States dollar to gold and made the transition to a
fiat currency system. The last currency to be divorced from gold was the
Swiss Franc in 200012. Gold is the oldest currency in the world and is
coveted across continents and cultures for a variety of reasons.
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Investors’ perception towards investment avenues
Maintains long term value: Market cycles have their ups and downs,
but gold has maintained its long term value. Paper currencies may rise
and fall but gold always endures. Gold has demonstrated its capacity
to store value for centuries.
Safe refuge: During times of calamities like war or economic crisis,
there may be a negative effect on investments like currencies, bonds
and equities, but may have an opposite effect on the value of gold.
Also gold is not a liability of any Government or corporation and
hence it does not run a risk of becoming worthless due to unexpected
events.
Inflation hedge: The value of gold, in terms of real goods and services
that it can buy, has remained remarkably stable whereas the
purchasing power of many currencies has generally declined.
Effective diversifier: Diverse investments help protect the portfolio
against fluctuations in the value of any single asset class. Gold is an
excellent portfolio diversifier because its performance tends to move
independently of other investments and key economic factors.
Both tangible and liquid: Gold is an asset that is both tangible and
liquid, unlike real estate which is tangible but not liquid, or company
shares and bonds which are liquid but not tangible.
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Investors’ perception towards investment avenues
The above chart and table shows gender wise distribution. Out of 100
sample investors 62% males and 38% are females. Generally males bear the
financial responsibility in Indian society, and therefore they have to make
investment (and other) decisions to fulfill the financial obligations.
4.2 Age group profile of sample investor
Information was collected from all age group of investor. The age group
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Investors’ perception towards investment avenues
Above table and chart shows the age group profile of investor. 5% of
investor are below 20 years age and majority of investors (53%) are between
20-30 years age group.17% of investors are between 30-40 years and 11% of
investors are between 40-50 years.14% of investors are above 50 years.
4.3 Occupation
Here occupation means position of the investor in the society. It may be
students, home maker, self employed or business people and other
occupations like peasants etc. The following table shows the occupation of
sample investor.
Table 4.3 Occupation of sample investor
Occupation No. of respondents Percentage of
respondents
Student 22 22%
Home Maker
10 10%
Self employed (Business/profession)
Employee (Government/Private) 23 23%
Retired
21 21%
Other
8 8%
16 16%
Total 100 100%
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Investors’ perception towards investment avenues
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Investors’ perception towards investment avenues
4.5 Children
A person who relies on another person, especially a family member, for
financial support is influence investment decision or perception of individual
investor. Here in order to know the preference of investment avenues of
investor those having children and investor those who are not having
children.
Table 4.5 Children
Having children No. of respondents Percentage of respondents
Yes 34 58%
No 66 42%
Total 100 100%
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Investors’ perception towards investment avenues
The above chart and table shows that 66% of investors are not having
children and 34% of investors are having children.
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Investors’ perception towards investment avenues
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Investors’ perception towards investment avenues
2 2%
Total 100 100%
40
30
0
Below 20% Between 20- Between 40- Above 60%
40% 60%
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Investors’ perception towards investment avenues
60
50
40
10
0
Below 20% Between 20- Between 40- Above 60%
40% 60%
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Investors’ perception towards investment avenues
No. of respondent
30
25
20
15
No. of respondent
10
0
Education Home Healthcare Marriage Retirement Other
Purchase Planning
From the above table and chart we can analyze that 25% of respondents
were invested for the purpose of education either for themselves or for their
children or other family member. 20% of investor invested their savings for
the purpose of purchase of house and 18% of respondents invest their
savings for the purpose healthcare that is to insure their health. 9% of
respondents are invested for the purpose of getting the money at the time of
marriage and 14% of respondents were invested for the purpose of
retirement planning.
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Investors’ perception towards investment avenues
Objectives of investment
High return Moderate return Safety Liquidity Tax benefits
8%
10%
34%
30%
18%
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Investors’ perception towards investment avenues
As indicated above chart and table 30% of investors were invested with
the objective of safety principle and 34% of investors were invested with the
objectives of get higher return.18% of respondents were invested with the
objective of get moderate return. 10% of respondents were invested with
objective of liquidity that means invested in such avenues which can be
easily converted into cash. 8% of investor were invested with the objective
of getting tax benefits.
Period of investment
Long term
25%
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Investors’ perception towards investment avenues
It’s interesting to know that many of the investors prefer to invest their
money for medium term (both) i.e. from 1-5 yrs, instead of short term or
long term.37% of investor preferred short term, 25% preferred long term.
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Investors’ perception towards investment avenues
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Investors’ perception towards investment avenues
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Investors’ perception towards investment avenues
No. of respondents
100
90
80
70
60
50
40 No. of respondents
30
20
10
0
Banking Insurance IT Sector FMCG Sector Other Sector
Sector Sector
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Investors’ perception towards investment avenues
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Investors’ perception towards investment avenues
No. of respondent
80
70
60
50
40
30
20
No. of respondent
10
0
When the investor asked about the factors considering before investment
many of them have voted for more than one factor therefore weights are
given for each parameter bases on the votes given by investors the maximum
weightage represents many investor influenced by many factor before
investing. Based on the weights calculated ranks are given in the order of
maximum weightage given by investors. First rank (with 42.70%weights) is
given to safety of principal and 2nd to return (with 32.02% weights).This data
shows that the sample investor give preference to safety and return which is
contradictory in nature. Investment believes in a proved principle, “higher
the risk higher the returns, lower the risk lower the returns”. Investors need
to know about this principle before investing. 3rd and 4th rank is given to
progressive value and diversification and maturity period respectively. Few
investors’ investment decisions were influenced by other factors.
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Investors’ perception towards investment avenues
factor like total income, time and other factor. So in order to know the
frequency of investment the investigator asked about the frequency of
investment.
Due to the busy life schedule, many of the investors are not able to spend
time in monitoring their investments, only 7% of the investors are
monitoring their investments daily, 36% are monitoring on a monthly basis,
57%, the majority investors are monitoring their investment occasionally.
Many of them who have invested in safe investment avenues do not bother
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Investors’ perception towards investment avenues
about their investments, some of them forget about the investment for many
years.
50
45
40
35
30
25
20
15
10
5
0
High Moderate Low
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Investors’ perception towards investment avenues
The above chart shows that 43% of investors are ready to take high risk
and 28% of investors have moderate risk tolerance level and 29% of
investors have low risk tolerance level.
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Investors’ perception towards investment avenues
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Investors’ perception towards investment avenues
No. of respondent
60
50
40
30
No. of respondent
20
10
0
Satisfied Partially satisfied Dissatisfied
From the above table and chart it clearly shows that 55% of investors
were satisfied with their investment. 40% of investors were partially satisfied
with their investment and 5% of investors were dissatisfied with their
investment.
I. INVESTMENT PREFERENCE BASED ON OCCUPATION
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Investors’ perception towards investment avenues
Since the investor has an option to invest in more than one investment
Avenue, weights are given on the basis of preference to investment avenues.
The avenue which is given maximum weightage by the investor is ranked
first. First ten ranks are given to the first ten preferred investment avenues.
First preference is given to Savings and second preference is given to the
bank fixed deposits. Tenth preference is given to National saving certificate.
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Investors’ perception towards investment avenues
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Investors’ perception towards investment avenues
Debenture 5 3.2 11
Private equity investment 3 2 12
Virtual real estate 2 1.23 13
156 100
Even though business people were rich and risk taker but from the above
table we can observed that they invested in life insurance, bank fixed
deposits. Real estate is one of the oldest investment avenues which acquired
3rd rank in the preferable investment avenues of self employed or business
people. 6th rank is given to the public provident fund and 10 th and 11th ranks
are given to the mutual funds and debenture respectively.
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Investors’ perception towards investment avenues
Retired persons always planned for their old age life. So in order to lead
the old age life with comfort they invested in such investment avenues which
gives benefits after retirement. So first rank is given to life insurance and
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Investors’ perception towards investment avenues
second rank is given to bank fixed deposits. 4 th rank is given to the National
saving certificate.
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Investors’ perception towards investment avenues
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Investors’ perception towards investment avenues
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Investors’ perception towards investment avenues
HYPOTHESIS TESTING:
1. Ho : There is no significant relation between risk tolerance level and
gender
H1 : There is significant relation between risk tolerance level and
gender
Table 4.29 Hypothesis Testing
Gender
Male Female Total
High 35 8 43
Risk
Moderate 19 9 28
tolerance Low 8 21 29
level Total 62 38 100
Source: Primary Data
Chi-Square Test
O E O-E ( O-E)2 ( O-E)2/E
35 26.56 8.34 69.5 2.61
19 17.36 1.64 2.69 0.15
8 17.98 -9.98 99.60 5.54
8 16.34 -8.34 69.56 4.26
9 10.64 -1.64 2.69 0.25
21 11.02 9.98 99.6004 9.04
ᵡ2 21.85
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Investors’ perception towards investment avenues
Above chart clearly explains that male investors (35) take high risk when
compared to female investor (8) .In additions to these male investors (19)
also take moderate risk. Female investors are low risk takers may be because
of earning low income or other economical problems. And important point is
that there is significant relationship between risk tolerance level and gender.
Male investors were take high risk than the female investor.
Chi-Square Test
O E O-E ( O-E)2 ( O-E)2/E
4 2.15 1.85 3.42 1.59
1 1.4 -0.4 0.16 0.11
0 1.45 -1.45 2.10 1.45
32 22.79 9.21 84.82 3.72
13 14.84 -1.84 3.39 0.23
8 15.37 -7.37 54.32 3.53
4 7.31 -3.31 10.96 1.50
10 4.76 5.24 27.46 5.77
3 4.93 -1.93 3.72 0.75
1 4.73 -3.73 13.91 2.99
1 3.08 -2.08 4.33 1.41
9 3.19 5.81 33.76 10.58
2 6.02 -4.02 16.16 2.68
3 3.92 -0.92 0.85 0.22
9 4.06 4.94 24.40 6.01
ᵡ2 42.502
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Investors’ perception towards investment avenues
other hand the p-value is 0.00000109 with level of significance 0.05; here p-
value is less than level of significance.
Result: Calculated value is more than tabulated value therefore null
hypothesis is rejected.
Conclusion: There is significant relationship between age group and risk
tolerance level.
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Investors’ perception towards investment avenues
Chi-Square Test
O E O-E (O-E)2 ( O-E)2/E
21 21.5 -0.5 0.25 0.0116
7 14 -7 49 3.5
22 14.5 7.5 56.25 3.88
4 9.03 -5.03 25.3009 2.802
15 5.88 9.12 83.17 14.14
2 6.09 -4.09 16.73 0.027
9 7.31 1.69 2.86 0.39
4 4.76 -0.76 0.5776 0.121
4 4.93 -0.93 0.8649 0.175
9 5.16 3.84 14.7456 2.86
2 3.36 -1.36 1.8496 0.55
1 3.48 -2.48 6.1504 1.767
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Investors’ perception towards investment avenues
30.223
X-squared = 30.223, df = 6, p-value =0.00001073
25
20
15
High risk
10 Moderate risk
Low risk
5
0
Below 1 lakh Between 2lakh-3 Between 3lakh- Above 5 lakh
lakh 5lakh
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Investors’ perception towards investment avenues
The above chart shows that there is mix opinion in risk tolerance level of
investor those come under below one lakh income level. But chi-square test
proved that there is significant relationship between income level and risk
tolerance level. Therefore as and when income level increases the risk
tolerance level also increases. But in this case there is opposite opinion that
low income people take high risk. This may be because number of low
income group people is higher than high income people. But p-value proved
that happening of these type of circumstances are minor and negligible.
Above 5 lakh income level people take higher risk when compared to people
come under between 3lakh-5lakh income level group and between 2lakh and
3 lakh income levels.
Note: In chi-square test expected frequency is calculated with the fallowing
formula,
Expected frequency = (Total of the correspondent column X Total of the
correspondent row) / Grand total
FINDINGS:
After the analysis of collected data investigator has listed the major
findings are study is listed below:
1. Majority of the respondents (62%) are male.
2. Most of the respondents (53%) are of the age group 20-30years.
3. Most of the respondents are self employed (23%) and fallowed by
students (22%).
4. Most of the respondents (50%) are having an Income level below 1lakh
followed by respondents having income level 1lakh-2lakhs (21%).
5. 42% of respondents are married and 58% of respondents are
unmarried.
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Investors’ perception towards investment avenues
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Investors’ perception towards investment avenues
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Investors’ perception towards investment avenues
for investment and have to tell the people what is the meaning of risk
and how it could be mitigated.
3. Government should stress the financial institutions to conduct investor
guidance workshops about available avenues for investment.
4. Financial sector i.e., banking, financial services and life insurance
industries will have to work with government.
5. There is a need for financial literacy and instilling confidence among
investors.
6. Industry associations and NGOs to educate the investor on the need
for savings and savings wisely
7. They should also educate the Indian population both on ways of
meeting their financial objectives through financial protection and
wealth creation.
8. To overcome the problem faced by the investors, adequate policy
reforms in financial sector is the need of the hour.
9. Government should introduce special investment avenues especially
for the students and organize investment awareness programmes in
colleges.
10.The investors who want to avoid risk should invest in treasury notes or
high rated municipal bonds and debentures etc.
CONCLUSIONS:
The study concludes that investment done in various investment avenues
with the expectation of capital appreciation and short and long term earnings.
The basic idea behind investment of all government, private, self-employed
and retired person in this study is to utilize the surplus money in favorable
plans so that the money will be rolled back as well as it will give high returns
also. When a common men thinks about investment he will never go for any
risky plan. In the present scenario the share and gold market is highly
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Investors’ perception towards investment avenues
BIBLIOGRAPHY
Books
1. Avadhani, V.A. (2007), “Investment Management”, Himalayan
Publishing Publication House, New Delhi.
2. Bhole, L.M. (2005), “Financial Institutions & Markets structure,
Growth & Innovations”, Tata McGraw- Hill Publishing Co. Ltd., New
Delhi.
3. Dr. Preeti Singh, Investment Management, Himalaya Publishing
House, sixteenth edition, 2008
4. Prasanna Chandra, Investment analysis and portfolio management, 3rd
edition, Tata McGraw-hill publication, 2010
Journals:
1. Ajmi Jy. A. (2008), “Risk Tolerance of Individual Investors in an
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Investors’ perception towards investment avenues
Websites:
1. www.business-standard.com
2. www.investopedia.com
3. www.investorguide.com
4. www.moneycontrol.com
5. www.moneymanagementideas.com
6. www.msnmoney.com
QUESTIONNAIRE
Respected Respondent,
I Abhinandan, student of M.Com studying in Mangalore University.
As a part of my curriculum I am doing project on “A study on investors’
perception towards investment avenues with reference to Mangalore city”.
So please take some time out of your schedule to fill this questionnaire.
• Between 30-40
• Between 40-50
• Above 50
4. Status
• Single
• Married
5. Children
• Yes
• No
6. Occupation (what category do you come under)
• Student
• Home Maker
• Self employed(Business/profession)
• Employee (Government/Private)
• Retired
• Other(please specify)
7. Annual Incomes
• < 1,00,000
• 1-2 Lakhs
• 2-3 Lakhs
• Above 3 Lakhs
8. Percentage of savings from your total income:
• Below 20%
• Between 20-40%
• Between 40-60%
• Above 60%
9. Percentage of investment in different avenues from your saving:
• Below 20%
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Investors’ perception towards investment avenues
• Between 20-40%
• Between 40-60%
• Above 60%
10. Purpose of your Investment:
• Education
• Home Purchase
• Healthcare
• Marriage
• Retirement Planning
• Other (please specify)…………………………………………
11. Main objective of your Investment:
• High return
• Moderate return
• Safety of investment principle
• Liquidity
• Tax benefits
• Both
• Bank Fixed Deposits • Commodity Market
•13.Public
Are you aware of
Provident the fallowing investment
Fund • avenues? (Tick which ever
FOREX Market
applicable in the boxes)
• National Saving Certificate Traditional Investment Avenues:
• Real Estate (Property)
• Post Office saving
• Gold/ Silver
• Government Securities.
• Chit Funds
14. What do you think are the best option for investing your money?
(Choose from above list)
(Rank in the order of preference)
1…………………… 2…………………… 3………………………
4…………………… 5…………………… 6 ………………………
15. In which sector do you prefer to invest your money?
• Banking Sector
• Insurance Sector
• IT Sector
• FMCG Sector
• Other (please specify)……………………………………….
16. Important factor guiding your investment decisions:
• Return
• Safety of principle
• Diversification
• Progressive value
• Maturity period
• Other…………………………..
17. How often do you monitor your investment?
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Investors’ perception towards investment avenues
• Daily
• Monthly
• Occasionally
18. Tolerance for risk is:
• High
• Moderate
• Low
19. Sources of your investment advice:
• Media
• Advisor
• Family or Friend
• Internet
• Financial Planners
20. Are you satisfied with your investment?
• Satisfied
• Partially satisfied
• Dissatisfied
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