A STUDY ON

“INVESTOR’S PREFERENCE TOWARDS VARIOUS INVESTMENT

OPTION”

A Project Submitted to
University of Mumbai for Partial Completion of the Degree of
Master In Commerce Under the Faculty of Commerce
By
Miss Priya Vishwakarma
Roll No. 59

Under the Guidance of

Mr. Mubeen Y. Shaikh

TOLANI COLLEGE OF COMMERCE

(AUTONOMOUS)
150-151, Sher-E-Punjab Society,
Guru Gobind Singh Road, Andheri (East),Mumbai-400093.

September 2022

1
 A STUDY ON
“INVESTOR’S PREFERENCE TOWARDS VARIOUS INVESTMENT
OPTIONS”

A Project Submitted to
University of Mumbai for Partial Completion of the Degree of
Masters in Commerce Under the Faculty of
Commerce
By
Miss Priya Vishwakarma
Roll No. 59

Under Guidance of
Mr. Mubeen Y. Shaikh

TOLANI COLLEGE OF COMMERCE

(AUTONOMOUS)
150-151, Sher-E-Punjab Society,
Guru Gobind Singh Road, Andheri (East),Mumbai-400093.

September 2022

2
 INDEX

Sr. Title Page

No. No.

1. INTRODUCTION 8
1.1 Introduction 9
1.2 Definition of investment 11
1.3 Why do people invest? 12
1.4 Classification of Investment 15
1.5 Classification of Investors 16
1.6 Financial Literacy 17
1.7 Importance of financial literacy in
India 19
1.8 Impact of social media of
financial literacy 20
1.9 Government initiative towards
financial literacy 21
1.10 Preference of People 23
1.11 Investment Avenues 25
1.12 Investment Decisions 31
1.13 Investment Strategies 34

2. RESEARCH 39
METHODOLOGY
2.1 Introduction 40
2.2 Objectives 40
2.3 Significance of study 40
2.4 Hypothesis 41
2.5 Need and scope of the study 41
2.6 Research area of the study 41

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 2.7 Data collection 42
2.8 Limitation of the study 43

3. REVIEW OF LITERATURE 44

4. DATA ANALYSIS, 49
INTERPRETATION AND
PRESENTATION

5. FINDINGS, CONCLUSIONS 57
AND SUGGESTIONS
6.1 Findings 58
6.2 Suggestions 60
6.3 Conclusion 62

6. REFERENCES 64

7. ANNEXURE 66

4
 CERTIFICATE
This is to certify that Miss Priya Vishwakarma has worked and duly completed
her Project Work for the degree of Master in Commerce under the Faculty of
Commerce in the subject of Project in Master in Commerce Studies (Advanced
Accountancy) and her project is entitled, “A STUDY ON INVESTOR’S
PREFERENCE TOWARDS VARIOUS INVESTMENT OPTION” under
my supervision.

I further certify that the entire work has been done by the learner under my
guidance and that no part of it has been submitted previously for any Degree of
any university.

It is her own work and facts reported by his personal findings and investigations.

Date of Submission – 13th September, 2022

Dr. Sadhana Mr. Mubeen Y. Dr. Vijaya Krishna

Venkatesh Shaikh
(Principal)
MCOM Coordinator Internal Guide External Examiner

5
 DECLARATION BY LEARNER
I the undersigned Ms. Priya Vishwakarma here by, declare that the work
embodied in this project work titled “A STUDY ON INVESTOR’S
PREFERENCE TOWARDS VARIOUS INVESTMENT OPTION”, forms
my own contribution to the research work carried out under the guidance of Mr.
Mubeen Y. Shaikh is a result of my own research work and has not been
previously submitted to any other University for any other Degree to this or any
other University.

Wherever reference has been made to previous works of others, it has been clearly
indicated as such and included in the bibliography.

I, here by further declare that all information of this document has been obtained
and presented in accordance with academic rules and ethical conduct.

Signature of Candidate
Miss Priya Vishwakarma

Certified by

Mr. Mubeen Shaikh

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 ACKNOWLEDGEMENT
To list who all have helped me is difficult because they are so numerous and the
depth is so enormous.
I would like to acknowledge the following as being idealistic channels and fresh
dimensions in the completion of this project.
I take this opportunity to thank the University of Mumbai for giving me chance
to do this project.
I would like to thank my Principal, Dr. Vijaya Krishna for providing the
necessary facilities required for completion of this project.
I take this opportunity to thank our Coordinator Dr. Sadhana Venkatesh, for her
moral support and guidance.
I would also like to express my sincere gratitude towards my project guide Mr.
Mubeen Y. Shaikh whose guidance and care made the project successful.
I would like to thank my College Library, for having provided various reference
books and magazines related to my project.
Lastly, I would like to thank each and every person who directly or indirectly
helped me in the completion of the project especially my Parents and Peers who
supported me throughout my project.

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 CHAPTER 1
INTRODUCTION

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 1.1 INTRODUCTION
In developing countries like India, investors are the real players in the market.
The participation of small investors is vital for the growth of the economy. A
wide variety of investment opportunities are available to investors today, thanks
to the diversification of financial services investments. With the right investment
strategies, investors can maximize personal wealth and further contribute to the
economy. Investments and savings are the backbone of a nation's economic
development. The income that people earn is usually spent on two main areas –
consumption and savings.
Saving is an important part of every person in this world and it also plays a
important role in shaping the national economy. Every person in this world wants
to invest a certain amount of their income in some kind of investment instruments
to achieve better returns for some future goals and unforeseen problems.
Savings are usually invested in various investment schemes such as bank
deposits, post office savings schemes, insurance policies, purchase of gold or
silver and purchase of land. People invest in various schemes with the expectation
of a reasonable income in the form of interest. Therefore, earnings are usually
generated through investments. In order to create more wealth and increase their
financial stability and meet future needs, people tend to invest more and more of
their income in various investment options.
Investing is a systematic plan by investors to allocate their money in an
appropriate place to earn and provide for future contingencies. Investment is the
purchase of a financial product or other items of value with the expectation of a
favorable future return. The risks and available returns of each of these
investment paths differ from one path to another. There are many investment
avenues available in the Indian market where some are tradable and liquid while
others are non-tradable and some of them are high risk while others are almost
less risky. Investors must choose Proper Avenue depending on their specific need,
risk preference and expected return. An investment strategy is a plan that is
created to guide an investor in choosing the most suitable investment portfolio
that will help him achieve his financial goals over a period of time.
In the period of the COVID-19 pandemic, when the whole world suffered greatly
from economic crises, which were witnessed by people who lost their jobs. In

9
times of financial distress, nations depended more on using their savings to
sustain themselves. In such contingencies, you need to save regularly and the
savings should be enough to cover future needs. There are many investment
options available for investors to invest their money in. Investment options are
divided into two parts, i.e., financial investment options such as banks, insurance,
post office, capital market; and non-financial investment options such as land,
agricultural land and gold etc. Financial investment options are highly liquid and
can be easily converted into cash. However, the liquidation of non-financial
investments usually takes quite a bit longer. Therefore, investors must always
consider the liquidity aspect along with the return on investment of any
investment option before investing their hard-earned money in any investment
vehicle. In this context, it becomes imperative to gain insight into the most
preferred investment plan by retail investors and study the relative importance of
different investment options.

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 1.2 DEFINITION OF INVESTMENT
The word “investment” has been utilized by several in numerous ways that,
however most of them didn't outline the term once they used it. The meanings of
investment given in customary dictionaries are given here.

The Oxford dictionary says that “investment as an asset or item that's purchased
with the hope that it'll generate income or appreciate within the future”.
The Cambridge dictionary states investment as “the action or method of
investment cash for profit”.

Graham, Benjamin and David Dodd in their book “Security Analysis and
Portfolio Management defined investment as “putting cash into 4 one thing with
the expectation of gain at intervals an expected period of time”.

Mittal, Manish and dhade in their book Investment is defined as, “the tradeoff of
the present consumption for a higher level of future consumption”. Those who
give up immediate possession of savings in the expectations of receiving a greater
amount in future are called investors.

Investment may be defined as flow of expenditure on new fixed capital goods like
houses, machinery, factories etc. or an addition to inventories. In ordinary usage
the term investment means investment in insurance policies real estate, securities,
debentures, shares, equities etc. for the individual it is the exchange of money or
cash for a future claim or money or the purchase of security of a promise to pay
at a later date along with interest as it is the price of shares, funds and debenture.

From the above dictionary meanings and definition, one will attribute the
following characteristics to investment.
• Investments are used for securing one’s future and not for immediate
consumption.
• Assets which will be regenerate into benefit future are purchased as
investments.

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 • Investment is predicted to come up with affordable returns throughout
their holding amount.

1.3 WHY DO PEOPLE INVEST?

Many people are interested in their investments. Investing or investments makes
people prepare for their future. No one has to work all their life. Investing is one
smart choice that people make to secure their future. People can earn money in
two ways, by working or by having their property work for them.
Every investment decision has two basic features: risk and time. While the
sacrifice takes place in the present and is definitive, benefits are available in the
future and are not certain. Economic well-being in the long run it depends on how
wise or foolishly he invests.

One needs to invest to get a return on unused resources and create a set amount
of money for a specific goal in life and create a reserve for uncertain future. One
of the important reasons why you need to invest wisely is to cover the cost of
inflation. One of the main reasons to invest is that if people keep their money with
them instead of investing it, their money it doesn't work for them. People will
only have the money they have stored. People can invest their money and earn
more money interest on what people put aside or by buying and selling assets that
increase in value. People may have a special need to invest. Some individuals
may imagine that keeping their money in the bank pays off are they genuinely
interested and why do they have to bother looking for others vehicles for
investment. However, not all people assume during this there are variants of
people who invest their money and get profits from it.
If people dream of earning a huge amount of money for their future, people need
to invest now. People can find many short-, medium- or long-term plans. Though
individuals tend to invest for various reasons, National Council of Applied
Economic analysis (NCEAR) India with the support of Securities and Exchange
Board of India (SEBI) has conducted an exploration on savings and investments,
they need mentioned the subsequent prime reasons for individuals to invest.

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Securing post retirement life:
People have successfully passed through many stages of life; overcome many
hurdles in your career and see ups and downs, retirement means to retire from
work, not from life. Like shifting from the fast lane to the slower lane where
driving is much more relaxed and pleasant. It's just another phase in a person's
life. Retirement can be a state of mind as well as a financial matter.
For many individuals, regular income is in the form of a salary, which is paid
monthly. Due to the regularity of income throughout our working life, we usually
tend to adjust our expenses to suit patterns of our income. By the time retirement
comes around, we usually have our income and payout patterns well practiced
even though they could a bit of modification in retirement. During retirement or
at some stage before we also tend to be forced to arrange what we plan to do with
it our retirement savings. Sometimes this may involve starting with what to do
our retirement cash and other savings we may have accumulated access. Given
the above facts, it is up to the person involved financial planning in an
extraordinary approach not only follows however, the lifestyle also has financial
independence.

Children education and marriage:

Due to love and affection for children, most people during this world feels that it
is their ethical duty to create a better future for it loved ones. because they want
their children, education or not expenses or wedding expenses may arise once in
a long period of time, i.e., in several Cases may vary over a decade or two, one
will fulfill this family obligation only by making the right investment.

Creation of wealth:
As someone famously said: “Yesterday is history and tomorrow is a mystery”, it
is true that no one is aware of what will happen in the future. future events. Most
people put their money into investments so they can increase your current income
either in the form of dividends or interest. Especially in every economic recession,
people lost their earnings abilities and will not invest throughout their earning
days remained as unfortunate examples for others. If individuals invest and
nothing unfortunate will happen in the future, will use the investment to either

13
spend on tours or will have a life far above ordinary comfort, and that they are
during a position to become rich to pass them on to his next generation who can
use for any productive activity.
Barberis, N., A. Shleifer, and R. Vishny. (1998) have stated that apart from the
above mentioned most common reasons for investment, some people who are
very generous make investments to use the proceeds in future for social cause and
some people are investing to obtain tax exemption.
The tax regime for all sources of income is not the same. For example, if a person
owns real estate, he can use certain deductions, thereby reducing your tax
liability. Real estate can thus serve as a very attractive investment tool for some
people. Second, investment in real estate, it supports other investment goals such
as retirement planning.

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 1.4 CLASSIFICATION OF INVESTMENT
Investment refers to invest money in marketable assets and financial physical
assets major characteristic features of an investment includes risk, return,
liquidity, safety, marketability, concealability, capital growth.
1. Physical investment:
Physical investments are tangible assets like motorcars, gold, silver,
buildings, plant and machinery. Some of the physical assets are useful
for further production and generate income like machinery and
equipment and new production plant whereas some like gold, silver, cars
are not useful for further production.
2. Financial investments:
Financial assets are those which are used for consumption or for
production of goods and services like shares, bonds and etc.
3. Marketable and non-marketable investments:
Investments which are listed on stock exchange are easily marketable
and can be converted into cash in a short time.
Non marketable investments like bank deposits, provident funds and
insurance schemes cannot be bought or sold in the stock exchanges and
thus are difficult to convert into cash immediately.

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 1.5 CLASSIFICATION OF INVESTORS
Investors can be classified into three categories. They are
• Risk averters- These investors prefer to invest in government
securities, life insurance policies that indicate risk averters do not invest
in risky assets.
• Risk moderates- Risk moderates also called as risk neutrals, they are
willing to pay for making an investment provided they get return of an
equal value, risk moderates mostly invest in common stocks and life
insurance policies.
• Risk takers- This investor main aim is getting higher return for their
investments. Risk takers believe in high return for a greater risk, they
mostly prefer to invest in common bonds and convertible securities.

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 1.6 FINANCIAL LITERACY
Growth and Development of Indian Economy an expansion of financial markets
through liberalization, privatization and globalization has paved the way for an
abundance of financial products. But on the other hand, financial literacy helps
investors choose the most suitable one investment avenues that can beat the rate
of inflation prevailing in the country economy and provided them with a net
positive return. Financial literacy is the ability to understand the financial market,
financial products, concepts and risks. It refers to a set of skills and knowledge
which enables the individual to invest in an informed and efficient manner
decision.
Financial literacy is commonly entailing the information of properly creating
choices concerning certain personal finance areas like insurance, property,
investing, tax planning, saving and retirement and involves intimate information
of economic ideas like interest, money planning, the mechanics 10 of a credit
card, advantageous savings strategies, client rights, time value of cash, etc. Thus,
it will be rightly declared that financial education is progressively vital for
everybody.
A wide accepted definition of financial literacy is one developed by the U.K.
National Foundation for Education analysis that describes financial literacy as
“the ability to create knowing judgments and take effective choices concerning
the employment and management of money” Participation in trendy finance
affords variety of queries and selections for investment. A transparent
understanding of the various avenues of investments can facilitate associate
capitalist to create a wise call supported his investment goal. The monetary
market offers a good sort of investments that take issue from each other with
relevancy the return, risk and therefore the waiting period. An investor must
remember of the deserves and limitations with regard to every investment channel
therefore on decide a course of investment set up.
When the financial literacy level will increase, the investors might take associate
knowledgeable decision concerning his investment portfolio which is able to
benefit each the country also as the investor. Financial literacy or awareness or
knowledge is getting education or information about the investment avenues. It
is being aware of the existence of the investment avenues in the market along

17
with their risk and return features, so that the individual investors are in a position
to select them appropriately to meet their financial goals. Lack of financial
literacy or awareness creates hurdles in the selection of the investment avenues
for the diversification of asset classes. It delimits the financial planning process
which thereby fails the process of investment for meeting the financial goals and
wealth maximization.

Source: National Centre for Financial Education report, 2015 &

Financial Literacy and Inclusion in India Survey Report, 2019

India’s financial literacy rate among its young and adult population has been
growing due to various factors including the recent advancement in technology
and media coverage. The government of India and various regulators are
constantly working towards growth by implementing financial literacy courses,
workshops and schemes. From mobile banking to online payments and insurance;
the country has a huge number of online financial services users. This helped
improve India’s financial literacy as the awareness and ease of insurance and
banking increased. Number of transactions with respect to digital payments in
India grew 5x from 1,004 crores (10.04 billion) in 2016-17 to 5,554 crores (55.54
billion) in 2020-21. Furthermore, the value of fintech transactions is expected to
rise at a CAGR of 20% to US$ 138 billion in 2023 from US$ 66 billion in 2019.

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 1.7 IMPORTANCE OF FINANCIAL LITERACY IN INDIA
Financial literacy is one of the biggest assets of any country as it is directly
proportional to the economic growth. The significance of financial literacy in
India are as follow:

• Development of rural areas:

Reaching out to rural sections and working on their development can be
achieved through financial literacy. This can be achieved by making
people more aware about the available resources and right way of
utilizing them.

• Ease in borrowing:
Based on an RBI study, 42.9% of population borrowed money from
informal sources and pay higher interests. A strong financial education
can help small traders make informed decisions and make the best use
of available resources.

• Ease in doing business transactions:

The launch of Pradhan Mantri Jan Dhan Yojana has led to an addition of
280 million new bank accounts. These accounts have led to an ease in
doing business and has also promoted cashless transactions to a great
extent.

• Growth of MSMEs:
MSMEs contribute to 29% of India’s GDP with 50% of the exports
coming from this sector. Financial literacy can help small businesses
grow and even bring new businesses to the market.

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 1.8 IMPACT OF SOCIAL MEDIA ON FINANCIAL LITERACY
Social media has a huge impact in spreading financial literacy in India. It was one
of the biggest influencers of rise in investment during the pandemic. Many stock
market training academies, YouTube channels and websites were founded during
this period. The top 15 Indian YouTube channel focusing on equity markets have
a subscriber base of more than 13 million. An increase in internet penetration and
popularity of these mediums, triggered a rise in popularity of investment across
India. Many people from different age groups began investing in equity markets
and mutual funds. The retail investors’ share in cash market turnover increase
from 39% in 2019 to 45% in 2020.

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 1.9 GOVERNMENT INITIATIVE TOWARDS FINANCIAL
LITERACY
Strengthening financial inclusion in India has been an important agenda of the
government and the various regulatory bodies such as: RBI, SEBI, IRDAI,
PFRDA. Efforts have also been taken to spread awareness and increase financial
literacy among small businesses. Listed below are few such initiatives taken by
respective regulatory authority:
• RESERVE BANK OF INDIA:
RBI being the money market and the banking regulator has launched
basic financial education as well as sector focused financial education.
These include, financial literacy guides, diaries and posters covering the
tenets of financial wellbeing such as savings, concepts of interest, time
value, inflation etc. To aid businesses, ATM’s, payment systems, Ponzi
schemes, financial awareness messages etc. are some of the other
contents covered.
• SECURITIES AND EXCHANGE BOARD OF INDIA (SEBI):
SEBI also focuses on enhancing basic financial education and sector
wise financial education. Being the Indian capital and securities market
regulator, it also arranges events such as the World Investor Week and
mass media campaigns. It also has a dedicated investor website.

• INSURANCE REGULATORY AND DEVELOPMENT AUTHORITY

OF INDIA (IRDAI):
Like the other regulators, IRDAI also works on content development by
creating brochures, handbooks etc. It has also created mandatory board
approved policy for insurers and arranges various seminars and quiz
programs.

• PENSION FUND REGULATORY AND DEVELOPMENT

AUTHORITY (PFRDA):
PFRDA has dedicated website called ‘Pension Sanchay’ launched in
2018. This website aims at increasing financial literacy from retirement
perspective.

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In addition to the above, the government of India has also implemented
several schemes in order to increase financial inclusion such as, Pradhan
Mantri Jan Dhan Yojana, Jivan Jyoti Beema, Atal Pension Yojana etc.
These schemes are introduced for the ease of banking services,
awareness, and general insurance awareness. In addition to this, the
government arranges several financial literacy programs like financial
education for children, retirement planning, commodity future markets
and insurance for school students to educate and spread awareness
among the young population.

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 1.10 PREFERENCE OF PEOPLE
Investment preference is the second element of the investment behavior. All
investment activities are based on one or the other factual basis is done with the
ultimate aim of having gains in future. Investors prefer not only futures earnings
but also prefer to risk of the securities. Yet different investors have different
objectives for making investment preference. The common objectives of
investment preference may be as follows:

• Safety - The term „safety‟ means protection against loss. Investor

always wants full safety for the money invested by him. In general, an
investor wants to put money in an avenue where risk - default risk,
market risk, interest rate risk, inflation risk, political risk, etc., is
minimized and return is maximized. The returns offered/expected trend
to minimize with the increasing standard of safety.

• Regular return- Few investors invest their savings with the objective
of generating regular income. A retired person would invest his savings
in such avenues, where he can get certain monthly returns, viz., and
monthly income scheme of post office or bank.

• Tax savings - In India, almost all the salaried people buy insurance
policies to avail tax benefits associated with these policies. The reason
for tax planning is to have a tax-free interest than can be achieved by
investing in tax-free bonds or units of certain mutual funds (central govt.
and state govt. bond).

• Liquidity- An investment is liquid if it can be converted into cash

without these reasons: 1. Difficulty, 2. Delay, 3. Loss in the original
value of investment. The element of liquidity depends upon the
marketability or buyback/redemption option. An instrument is
marketable only if there are a large number of buyers and sellers like
treasury bills, government securities, shares of good companies with
traded regularity, etc. Nowadays companies have started issuing

23
debenture with put and call option, which create an element of limited
liquidity.

• Capital gain- Today, more and more investors put their savings in the
stock market just because they expect an appreciation in the capital
invested by them. High capital appreciation is same times achieved in
the stock prices, but at the same time the element of risk is also high.
This can be achieved by making the right kind of investment decision at
the right time.

• Risk- The risk of the investment is the major factor which influences
the investment preference. Risk is the probability that a loss will occur.
The eventualities that follow will have negative or positive
consequences. Risk can be defined as a term which can be avoided or
mitigated. In finance, the risk involved in the investment is the
probability that the actual return from the investment will be different
from the expected level. The fascinating aspect of finance is the
relationship that exists between risk and return.

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 1.11 INVESTMENT AVENUES
An investor has different investment avenues to park investors saving. The
investor chooses the investment avenue that maximizes his utility. Many
investors want to diversify their holdings in order to limit their exposure to risk.
Investors are blessed with different investment avenues which are made available
for them to make their investments. Like all investments, they conjointly carry
sure risks. The investors ought to compare the risks and expected yields when
adjustment of tax on varied instruments whereas taking investment choices.

There are various avenues of investment on the market nowadays. Investment has
been an activity confined to the wealthy and business category within the past.
This will be attributed to undeniable fact that accessibility of investible funds may
be a pre requisite to the deployment of funds. But, these days by the whole of the
promising income level of the around public investment has acquire a household
phrase and is popular with individuals from all walks of life. Composition of
investment portfolio ought to balance

Insurance is a social device giving financial compensation for the impacts of

adversity, the payment being produced using the gathered commitments of all
parties invested in the plan. In this way it might be seen as a sort of asset into
which all who are insured will pay a guaranteed commitment called premium,
consequently those insured will have the privilege to call on the fund for any
proper payment if the insured event happens.

Insurance agencies are dynamic in the accompanying field among others-life

health and general and they have started to operate the pension schemes and
Mutual Funds too. Insurance business comprises of spreading risks over time and
sharing them between people and organizations. The significance portion of
insurance business is life insurance, the operations of which rely on upon the law
of mortality. The refinement between life and general insurance business is that
with respect to the previous, the claim is fixed and certain, but in the case of the
latter, the claim is dubious, i.e. amount is variable and it is as sure capable just at
some point after the occasion.

25
Individuals confronting common risks meet up and make their small
contributions to a common fund. The commitment to be made by every individual
is resolved on the suspicion that while it may not be conceivable to tell
beforehand, which individual will endure, it is conceivable to tell, on the premise
of past experiences, how many persons, on an average may endure misfortunes.

(a). Post Office

The post office savings schemes are introduced to promote safety,
security and investment option to the common man. Moreover, the
collected money is used for various developmental works of the
government. The post office operates the followings schemes namely
post-office savings account, time deposit account, recurring deposit
account, monthly income schemes, public provident fund and other
various savings certificates. The term of post office savings schemes
includes Kisan vikas patra (KVP), Post Office Monthly Income Scheme
(POMIS), Public provident fund (PPF), National Savings Certificate
(NSC), Post office Recurring Deposit (PORD).

(b). Banks
Banks are in a business of money lending. They collect funds from
depositors and lend to borrowers. Spread between the lending and
borrowing rates is the earning of the banks. Besides lending, banks are
channels for transfer of money from one to another. Individuals, HUF,
firms, business houses, corporations, governments, everybody and
anybody can have the facility of transferring funds to another by opening
an account and using a cheque facility.
Banks are acting as custodian for innumerable account holders. They
provide kind of choices to account holders to speculate their cash relying
upon the time horizon and return expectations whereby they'll earn
interest income.
Banks offer two types of deposit accounts primarily. These are deposits
of demand such as current / saving account and deposits of term such as
fixed or recurring deposits. You become an account holder or a depositor

26
when you open a deposit account in a bank. Saving accounts are used to
satisfy money demands on-demand on a daily basis. You have a saving
bank account, for instance, with the bank having a cheque book facility.
The bank asks you to keep a minimum Rs 1000 balance. The bank pays
you a 4 percent interest per annum in exchange. You can also use an
ATM card to run the saving account. Banks use ATMs to impose
limitations on the frequency and quantity of withdrawal. The saving
account deposit rates continue to change depending on the revision of
policy rates by RBI. Banks give reduced saving account interest rates
relative to term deposits. This is why investors are opting for term
deposit accounts. For a set period of moment, a term deposit account is
used to hold cash. The bank pays interest on the term deposits in
exchange for this. However, before the expiry of the set period you are
not permitted to withdraw your cash. For example, you have Rs.10,000
fixed deposit with bank for a period of five years, then bank pays you an
interest at an annual rate of 8.5%.

(c) Insurance:
Insurance is a cooperative device to spread the loss caused by a
particular risk over a number of persons who are expressed to it and who
agree to ensure themselves against that risk. It is also a social device that
accumulates funds to meet the uncertain losses arising through a certain
risk to a person insured against the risk. The process
of insurance has been evolved to safeguard the interests of people from
uncertainty by providing certainty of payment at a given contingency.
The insurance principle comes to be more and more used and useful in
modern affairs. Not only does it serve the ends of individuals, or of
special groups of individuals, it tends to pervade and to transform
modern social order, too insurance is a cooperative device to spread the
loss caused by a particular risk over a number of persons who are
expressed to it and who agree to ensure themselves against that risk. It
is also a social device that accumulates funds to meet the uncertain losses
arising through a certain risk to a person insured against the risk. The

27
process of insurance has been evolved to safeguard the interests of
people from uncertainty by providing certainty of payment at a given
contingency. The insurance principle comes to be more and more used
and useful in modern affairs. Not only does it serve the ends of
individuals, or of special groups of individuals, it tends to pervade and
to transform modern social order, too insurance is a cooperative device
to spread the loss caused by a particular risk over a number of persons
who are expressed to it and who agree to ensure themselves against that
risk. It is also a social device that accumulates funds to meet the uncertain
losses arising through a certain risk to a person insured against the risk.
The process of insurance has been evolved to safeguard the interests of
people from uncertainty by providing certainty of payment at a given
contingency. The insurance principle comes to be more and more used
and useful in modern affairs. Not only does it serve the ends of
individuals, or of special groups of individuals, it tends to pervade and
to transform modern social order, too Insurance is a cooperative device
to spread the loss caused by a particular risk over a number of persons
who are expressed to it and who agree to ensure themselves against that
risk. It is also a social device that accumulates funds to meet the uncertain
losses arising through a certain risk to a person insured against the risk.
The process of insurance has been evolved to safeguard the interests of
people from uncertainty by providing certainty of payment at a given
contingency. The insurance principle comes to be more and more used
and useful in modern affairs. Not only does it serve the ends of
individuals, or of special groups of individuals, it tends to pervade and
to transform modern social order, too. Insurance is a cooperative device
to spread the loss caused by a particular risk over a number of persons
who are expressed to it and who agree to ensure themselves against that
risk. It is also a social device that accumulates funds to meet the uncertain
losses arising through a certain risk to a person insured against the risk.
The process of insurance has been evolved to safeguard the interests of
people from uncertainty by providing certainty of payment at a given
contingency. The insurance principle comes to be more and more used
and useful in modern affairs. Not only does it serve the ends of
28
 individuals, or of special groups of individuals, it tends to pervade and
to transform modern social order, too. Insurance is a contract to pay
compensation in certain eventualities (eg., death, fire, theft, motor
accident) in return for a premium. The main principle underlying
insurance is the Pooling of Risks.
The main term in insurance is
• Insurer: A person or company that insures someone or something.
• Insured: The person, group or organization whose life or property is
covered by an insurance policy.

(d) Non-financial assets:

The investments in non-financial assets like investment in plots, agricultural land
and purchase of commodities like gold and silver was always remained the
favorite investment avenue for many of the retail investors across India.

(e) Stock market:

A stock market, share market, or equity market is an aggregation of buyers and
sellers of stocks (also called shares) that represent ownership claims to
businesses; these may include securities listed on a public stock exchange as well
as stocks that are only traded privately, such as shares of private companies that
are sold to investors through equity crowdfunding platforms. Investment is
usually made with an investment strategy in mind.
The main objectives of the Stock Market are to provide ready marketability,
liquidity, negotiability, control of dealings and protection of interest to investors.
In India, the industrial securities market is small. The movement of the stock
exchange is not an indicator of the economies financial condition. The stock
market is ruled by investors who flourish inflationary pressures and scarcities.
The stock market is focused on some industrial units. The public sector
organizations have to some extent increase the business in stock exchange.
In the stock exchange, just listed securities are permitted to be auctioned and
purchased and sold. Listed securities are “cleared” and “Noncleared”. To get
listing arrangements must be made by observing certain standards. These are

29
a) Memorandum of association which should conform to the necessities of
the stock market,
b) Prospectus should comply with the rules,
c) Public subscription ought to be offered through prospectus,
d) Allotment of shares must be fair and unlimited
e) Listing agreement should be implemented. Securities once listing may
be branded as cleared securities just in the event that they conform to
specific prerequisites.

30
 1.12 INVESTMENT DECISIONS
The method of making a decision can be a cognitive operation that ends in
choosing a course of action among many alternatives. During that method, the
emphasis is on thinking things through and together considering the results and
alternatives before entering the final judgment. Each decision method produces a
final selection. The output can be an action or an opinion. Investment decisions
are identified as the result of three distinct but interconnected classes factors.
They are:

• Factual or informational area:

The investor will collect enormous data and this detail will be observed
by the investor in a general fashion or only for a particular product to
which he is intended to invest.

• Expectation area:
After analyzing the various data available in his hand, the investor will
predict the outcome of various investment possibilities at different
situation. The data collected from the environment would help the
investor to select the investment product and keep an expectation on
each of them.

• Valuation premise:
In this area, the investors will prefer a product for their return or for the
distinct factors and compromise for certain other factors. This may also
be adopted for the safety of the investment money and to compromise
on the income from a particular product or from the entire assets. The
above preference will be revisited by the investor at regular intervals.

• Investor Behavior
Individual investor behavior is factored by their age, income, education,
knowledge levels, etc. investor perception differs with reference to

31
 various investment avenues, assets and market segments within the stock
exchange. The investment motives conjointly vary through capital gains,
dividends, bonus, rights, tax benefits and alternative relevant factors.
Economists have developed behavioral models to clarify the decision-
making method of people. There are numerous investment avenues.
Once one investment opportunity is chosen, different opportunities
could also be given up. So, cost of an investment is that the possible
income from future bests various. Rational decision-making demands
technical information and practical expertise. Investor behavior
approaches investment as a rational call - creating method during which
the investor tries to pick out a portfolio of securities. Rational investor’s
kind rational expectations regarding asset returns, intended by the
increasing principle. They collect obtainable and relevant information
for making choices. Some investors build selections on inadequate
information and such decisions could get it wrong.

Investor Investing Process

Every investor should have a process. This is applicable whether or not or not
they're value investors. An investment method helps keep investors targeted and
on track, and prevents the investor from going off the persisent showing emotion
once making investment decisions. Emotional investment choices are dangerous
for returns and might extremely ruin a portfolio. Managing the investment may
be a dynamic and an ongoing process. This process starts with planned initial
investment and the real task is monitoring and updating the investments in the
wake of new developments.
Numerous avenues of investment are available today. Almost everyone owns a
portfolio of investments. The portfolio is likely to comprise financial assets- Bank
deposits, bonds, stocks and so on and real assets- car, house and so on. The
portfolio may be the result of a series of haphazard decisions or may be the result
of deliberate and careful planning.

32
33
1.13 INVESTMENT STRATEGIES
Investors may be classified as

1. Defensive/conservative investors:
At first, the strategy that is adopted by defensive investors may be taken
up. Major class of investors are called the defensive or the conservative,
in the sense of conserving the capital. For all the defensive investors,
intelligent action can mean mostly the exercise of firmness within the
application of comparatively easy principles of sound procedure.
The defensive investor is one interested primarily in safety and freedom
from trouble. Investor should follow a simple two part program, dividing
their portfolio between suitable bonds and diversified list of leading
common stocks. Appropriate lists of this kind can be readily prepared by
a competent security analyst or investment advisor. The investor will
have to make a choice between two courses of action relating to the
proportion of his portfolio committed to common stocks.
In the one case the amount is fixed, more or less permanently say at 50
%. He will then make rather infrequent adjustments to restore the 50 %
after it has been changed, say to 55% or 45% by a significant advance or
decline in the market level. In the second case, investors might seek to
reduce his holdings of common stocks below the 50% say down to 25%
if he felt the market level was dangerously high and conversely, how
would be ready to build up the proportion to perhaps as high as 75%, if
he felt that a decline in stock prices was making them increasingly
attractive. To these strategies one may add three supplementary concepts
or practices for the defensive investor. The first is the purchase of shares
of the leading investment funds as an alternative to creating his own
common stock portfolio. Alternatively, he may utilize one of the
“common trust funds” which are operated by trust companies and banks
in many states or if his funds are substantial he may use the services of
established investment advisors. This will provide him skilled
administration of his investment program on customary lines.

34
2. Aggressive/Enterprising investors.:
The second category of investors to be termed “aggressive” or
“enterprising”. They are not distinguished from the others by their
willingness to take risks for in that case they should be called
speculators. Their determining trait is rather their willingness to devote
time and care to the selection of sound and attractive investments. It is
not suggested that the enterprising investor must be fully trained expert
in the field. He may well derive his information and ideas from others,
particularly from security analysts. But the decision will be his own, and
in the last reckoning he must rely upon his own understanding and
judgment. The initial rule of intelligent develop by the enterprising
investor ought to be that he can never commence a security purchase that
he doesn't entirely comprehend which he cannot justify by relevance the
results of his personal study or expertise.
The investor must make sure that his results will not be worse. It is most
essential that the aggressive/ enterprising investor starts with a clear
conception as to which course of action has reasonable chances of
success and which do not. Investment too deals with the future and
depends on future developments for its vindication. But the term is
meaningless unless it implies that the investor seeks to obtain full present
value for his money that he judges this value in the light of the past
record and experience and that he deals with the future more as a hazard
to be guarded against than as a source of profit through prophecy.109
Investment needs and presupposes a margin of safety to guard against
developments.

3. SATISFACTION
The investors‟ satisfaction is the most important and final element of the
investment behaviour of the investors. This is also one of the post investment
behaviour of the investors. Investors obtained satisfaction after achievement of
expected return. Presently the investors are satisfied investment in different
avenues, because they have so many reasons such as safety of the investment,
high return, tax exemption, easy marketability of securities, expected risk,
many choices of investments and updated information about choices of

35
 investments available in the media. Past experience and satisfaction level
should be motivated by the investors to further investment in corporate
securities.

INVESTMENT PROCESS:
The world of investments too has few standard procedures implied for investors who are
novices in their claim and need to enter the horde world of investments. These prove to
be useful for there is each probability of losing what one has if due consideration is not
taken.

1.Self-assessment:
Self-evaluation of one’s needs; expectations and risk profile is of prime
significance failing which; one will commit more errors in putting money in
right places than something else. One ought to recognize the degree of risk
bearing capacity one has and furthermore obviously express the expectations
from the investments. Irrational expectations will just bring pain.

2.Understand the nature of investment:

It is vital to identify the character of investment and to grasp if one is
compatible with the investment. One will lose significantly on the off
probability that one picks the wrong kind of Investment avenues. With a
specific goal to avoid confusion it's better to go through the literature as an
example offer document and fact sheets that organizations provide on their
funds.

3. Analyze the investment avenues:

Initially one has to select what investor needs the money for and it's this
investment objective that have to be compelled to be the managing lightweight
for all investments done. It's therefore imperative to understand the risks
conjoined with the fund and align it with investor‟s quantum of risk one will
take. One should analyze the portfolio of the funds for the aim. Excessive
exposure to a specific sector should be avoided, because it can just add to the
risk of the entire portfolio. Invest with a specific ideology like the “Value
Principle” or “Growth Philosophy”. Recognizing the projected investment
philosophy of the fund can give an insight into the type of risks that it might be
take in future.

36
It is important for all investors scrutinize the avenues accessible to them
independent of the investor category they belong to. This is important because
an educated investor is in a superior position to settle on right decision. Having
distinguished the risks associated with the investment is important thus one
should attempt to know all aspects connected with it. Soliciting the delegates
is one from the approaches to deal of die problem.

4.Risk awareness:
A typical investor is restricted in the level of risk that he will take. It is
subsequently of key significance that there is thought given to the procedure of
investment and to the time horizon of the proposed investment one should
refrain from speculating which as such would mean getting out of one fund and
investing in another with the aim of profiting.
Regardless of what the risk profile of a person is, it is constantly prudent to
diversify the risks associated. So putting one‟s money in various asset classes
is generally the best alternative as it averages the risks in every classification.
In this way, even investors of equity should be judicious and invest some
portion of the investment in debt. Diversification even in any specific asset
class (such as equity, debt) is good. Not all fund managers have the same
sharpness of fund management and with recognizable proof of the best man
being an intense task; it regards place money in the hands of few fund
managers. This may reduce the most extreme return conceivable, however will
also reduce the risks.

5.Find the Right Funds:

Finding the right funds is essential and one should also use these funds for tax
efficiency. Investors of equity ought to remember that all dividend payout
option is utilized, Investors of debt will be charged a tax on dividend
dissemination thus can without much of a stretch maintain a strategic avoid the
payout options.
Investing should be a regular and not an exercise undertaken at one‟s desires,
within the event that one must actually have the benefit of them. As we tend to
said before, since it is extremely hard to know once to enter or leave the market,
it is necessary to beat the market by being systematic. The fundamental
philosophy of Rupee cost averaging would propose that if one invests
habitually through the ups and downs of the market, he would stand a much

37
better chance of creating more returns than the market for the entire period of
investment.

6.Track the investment:

Finding the right fund is important however considerably more important is to
monitor the performance of their investment. For Example: In the stock market
if the market is beginning to enter a bearish stage, then investors of equity too
will profit by changing to debt funds as the misfortunes can be minimized. One
can simply change back to equity if the equity market begins to demonstrate
some buoyancy.

38
 CHAPTER 2
RESEARCH METHODOLOGY

39
 2.1 INTRODUCTION
Research is conducted with the main purpose of contribution of
something new and unique to the prevailing stock of knowledge in any
field by developing a new concept or effecting advancement in the
connotation of existing concepts. It can be properly accomplished
through any study only through pre planned and well-defined steps
applying perfectly applicable methods in each step there by facilitating
the collection, analysis, and drawing conclusion smoothly and
meaningfully. With a view to effectively carry out the study
conceptually and methodologically structured research design is a must.

2.2 OBJECTIVES
The main purpose of this analysis is to find the investment preferences
among the investors. Investors perception will give insight on how the
investors think about the various investment avenues and the services
provided by the companies.
• Avenue preference among the investors
• What parameters are taken into consideration before investing.
• What time period of investment does investor feel comfortable to invest.
• To find out whether share market avenues are preferred by investors or
not.
• To find out the main objective of the investors towards making
investments.

2.3 SIGNIFICANCE OF THE STUDY

The significance of the research is to understand the investment avenue
selection among the young investors and to understand the relation
between investment and savings. If the selection of investment avenues
among the youthful investors is good, then it will help our government
for making policies according to it so that the investors get motivated to
invest in Financial Market and its Instruments. The study area is featured
by a good number of young generations i.e., students, salaried,
businessmen. Further, this study will help the young investors to decide

40
in what financial product they should invest so that they can plan their
goals accordingly.

2.4 HYPOTHESIS
Hypothesis 1:
H0 - There is no significance difference among the Genders while choosing
Investment Avenue like Equity and Mutual Fund.
H1 - There is significance difference among the Genders while choosing
investment avenue like Equity and Mutual Fund.

Hypothesis 2:
H0 – There is no significance difference among the Age Group while Investing
in Equity and Mutual Fund.
H1 – There is significance difference among the Age Group while investing in
Equity and Mutual Fund.

2.5 NEED AND SCOPE OF THE STUDY

Investor behavior has changed significantly with the impact of the
recession. Through India, it was not directly affected by the subprime
crisis. The concerns hit hard on investors' minds and payouts he lost big.
Most individuals started investing quite a lot. Nowadays they are looking
for safety instead of expensive life. This was it I never knew that a
business should be proactive to match the changes are happening in
people's minds, however it sometimes should be even reactive.
Therefore, it is time to study investor behavior and know their feelings,
expectations and perceptions associated with them with people's
investment decision.

2.6 RESEARCH AREA OF THE STUDY

The study area is Mumbai district. The outcome of this study will help
what are the factors influencing to investment on different avenues to

41
know the attitude towards investment in Mumbai district people’s
response regarding factors influencing.
Sampling Frame
Universe: Instead of obtaining information from each and every unit of
the universe, only a small representative part is studied and the
conclusions are drawn from that basis for the entire universe or whole
population.
Sampling Unit: The sampling unit was limited to selected areas of
Mumbai district
Sample Size and Sample design:

2.7 DATA COLLECTION

The data required for a research study can be obtained both from the
primary and secondary sources. The primary data is the data obtained by
the researcher himself with the specific objective of the study by using
structured questionnaire. On the other hand, the secondary data is a data
obtained by others for some other purposes. The present study is mainly
dependent on the primary data. The secondary data have been collected
through various websites, research articles publish in various online
journals, is also used in this study.

(a) Primary data:

✓ Primary data means first-hand information collected by an investigator.

✓ It is collected for the first time.

✓ It is original and more reliable.

✓ For example, the population census conducted by the government of India

after every ten years is primary data.

(b) Secondary data:

✓ Secondary data refers to second-hand information.

42
✓ It is not originally collected and rather obtained from already published or
unpublished sources.
✓ For example, the address of a person taken from the telephone directory or
the phone number of a company taken from Just Dial are secondary data.

In this study survey method was used to collect the primary data from the
Investors. A simplified questionnaire was prepared which had an aim of
understanding the preferences of young investors.
The participants were asked to fill demographic details such (age, gender,
occupation, qualification) and the other questions were asked related to their
investment preferences among various investment avenues such as (Share
market, Bank Deposits, Post Office Deposits etc.)

2.8 LIMITATION OF THE STUDY

The study is based on limited scope of area.

Whole market cannot be collected.

43
 CHAPTER 3
REVIEW OF LITERATURE

44
A literature review is a comprehensive summary of previous research on a given
topic. Literature review examines scholarly articles, books, and other sources
relevant to a particular area of research. Overview should list, describe,
summarize, objectively evaluate and clarify this previous research. It should be
to provide a theoretical basis for research and to help you (the author) determine
the nature of your research. The literature review acknowledges the work of
previous researchers and thereby reassures the reader your work was well thought
out. It is assumed that by citing previous work in the field, that the author has
read, evaluated and assimilated this work into the work available.
A literature review creates a "landscape" for the reader, giving her or him a full
understanding of the developments in the field. This landscape informs the reader that
the author has indeed assimilated all (or the vast majority of) previous, significant works
in the field into her or his research.

1. Gupta et al. (2001) studied the preferences, future intentions and experiences
of Indian family investors and discovered that bonds were considered an
investment for retired individuals but had little attraction to young individuals.
For all age groups, the market penetration attained through mutual funds was
discovered to be significantly smaller than equity shares.

2. Gupta and Jain (2008) according to the study of 1463 homes, investor
preferences were discovered among the main classifications of economic
assets, such as share investment, indirect investment through multiple kinds of
mutual fund schemes, other kinds of investment, such as exchange-traded gold
funds, bank deposits and public savings schemes. The research offers
interesting data on how the attitude of investors towards different kinds of
investment is linked to their revenue and age, their practices of portfolio
diversification, and the general quality of market regulation seen by the
investors themselves.

3. Verma (2008) studied the impact of demographics and personality on Indian

investor investment choices and discovered that mutual funds were common
among practitioners, students and self-employed people. By not investing in
mutual funds and equity shares, retirees exhibited their risk aversion. It was
also discovered that the level of comprehension of investment complexities was

45
 greater in higher education. Graduates and above preferred to invest in both
equity and mutual funds.

4. Nagpal and Bodla (2009) Studied respondent’s lifestyle traits and impact on
investment preferences. The research concludes that the lifestyle of investors
predominantly determines investors ' risk-taking ability. The research
discovered that the individual shareholders prefer less risky investments, i.e.
life insurance policies, fixed deposits with banks and post office, PPF and NSC,
despite the phenomenal development in the safety sector.

5. Brahma Bhatt, P.S. Raghu Kumari, Dr. Shamira Malekar in their research on
investor behavior in investment avenues in Mumbai (September 2012),
individuals like to invest in the stock market even if they are facing enormous
losses. They offer savings a greater preference for safety but at the same
moment want greater interest in shorter period at low danger.

6. Davar and Gill (2009) studied the fundamental dimensions of the choice of
various investment avenues for families were explored. The research findings
indicated emphasis for all investment avenues on familiarity, satisfaction,
opinion, and demographic dimensions.

7. Giridhari Mohanta, Dr. Sathya Swaroop Debasish in their study showed that
the income and employment of male and female investors play an important
role in selecting investment avenues More male investors are involved in
selecting avenues than female and in both respects, they are generally sound
than female investors.

8. Dr. D. Harikanth, B. Pragathi this study shows that there is a significant role of
income and occupation in the choice of investment avenues by male and female
investors, for which a systematic review was carried out by taking into
consideration primary data obtained by the means of standardized
questionnaire and secondary information.

9. J. Sidharthul Munthaga, Dr.M. Nazerthe study on people’s choice in

Investment Choices has been undertaken with the objective, to analyze the
investment choice of people in Thanjavur District. Analysis of the study was

46
 undertaken with the help of survey conducted. After analysis and interpretation
of data it is concluded that in Thanjavur District respondents are medium aware
about various investment choices but they do not know aware about stock
market, equity, bound and debentures. The study is conducted by taking a
limited number of sample sizes which is stated earlier. And this study reflects
the exceptions of those respondents who are residing in Thanjavur District.

10. Neha S Shukla through this research paper, an analysis has been made about
investor’s preference towards investment avenues & the study focused on the
salaried personnel only. Though different respondents invest in different
avenues, it was evident that they tend to invest much in Fixed Deposits, Post
office scheme and Gold and Silver. Majority of respondents invest for
purchasing home and long-term growth.

11. Sonali Patil, Dr. Kalpana Nandawar, their study is based on primary sources of
data which are collected by distribution of a close ended questionnaire. The
data has been analyzed using percentage, chi-square test, and Person
Correlation Coefficient with the help of statistical software. The researcher has
analyzed that salaried employees consider the safety as well as good return on
investment on regular basis. Respondents are aware about the investment
avenues available in India except female investors.

12. Droms (1987) found that the attitude of the investor towards his
investment plays an important role between the fund management entity
and the investing community. Based on the risk tolerance of the investor
the portfolio composition should be in such a manner that the risk and
return is in an optimum mode.

13. Ravichandran (2012) in his article titled “A study on Investors

Preferences towards various investment avenues in capital market with
special reference to derivatives” has conducted the study to find out the
awareness level of the investors on various capital market instruments
and also to find out their risk preference in various segments. The author
has stated that 36% of the respondents preferred wealth maximization
instruments followed by steady growth instruments. Moreover, the

47
 author has pointed out that respondents perceived that market risk and
credit risk are the two major risks observed in capital markets. The
author has concluded that the investors should be aware of the various
hedging and speculation strategies, which can be used for reducing the
risk. Awareness about the various uses of derivatives can help investor
to reduce risk and increase profits. Though the stock market is subjected
to high risk, by using derivatives the loss can be minimized to an extent.

14. A.Sarangapani and T.Mamatha on investment pattern of Indian investors

(July 2011) assessed in their research, investment pattern of sample
investors indicates that the majority investors prefer to invest in equity
shares than in other instruments. It is also revealed in analysis of the
portfolio of investors that 72% investors prefer to invest in different
types of instruments and the rest only in equity shares. The portfolio size
of convertible debentures is comparatively more than non-convertible
debentures in Hyderabad city.

15. Bairagi and Rastogi (2013) gauged the awareness and preferences of
investors of Pune for different investment avenues available and
analyzed the factors that influence their perception and preferences. A
sample of 526 respondents, most of them belonging to the household of
Pune City. The authors focused on identifying the level of awareness of
investors about various investment avenues and were asked to rank the
investment avenues in terms of level of their awareness. Convenient
sampling and Simple random procedures were used to select the
respondents. Weighted Average Scores was used to analyze the data.
Another objective of the study was to analyze the relation between
awareness and socio-economic factors relating to the investors. Banks
deposits were rated as highest preference, followed by small saving
schemes and insurance was the third preferred investment. Safety of
investment was found as the major objective of investment.

48
 CHAPTER NO. 4
DATA ANALYSIS, INTERPRETATION AND
PRESENTATION

49
Data analysis is defined as a process of cleaning, transforming, and modeling data
to discover useful information for business decision-making. The purpose of Data
Analysis is to extract useful information from data and taking the decision based
upon the data analysis.

A comprehensive questionnaire was developed to understand the investors

preference towards various investment options. It also aimed on understanding
how much people save from their earnings, for how much time they prefer their
savings to be invested and what factors do they consider before investing.

A total of 66 responses were received after the questionnaire was sent out to 66
individuals.

Question 1) Gender?

From the above diagram, we can see that 54.5% of the population is
Female and the rest of the population, i.e., 45.5% is Male.

Question 2) Age?

50
From the above diagram, we can see that 98.5% of the population is
under the age group 20-30 years of age and the rest of the population is
under the age group 31-40 years of age.

Question 3) Education qualification?

From the above diagram, we can see that population has education
qualification of 27.3% of non-graduate, 42.4% of graduate, 24.2% of
post-graduate and others consists of CA, 11th, CA Intermediate and
under graduate.

Question 4) Occupation?

51
From the above diagram, we can see that population consists of 53% of
student, 40.9% of the population is salaried and the others are either still
studying or a professional.

Question 5) Income?

From the above diagram, we can see that 13.7% of the population have
an income between Rs 20000-40000, 7.8% of the population have an
income of more than Rs 60000, 74.5% of the population have an income
up to Rs 20000 and the others have an income between Rs 40001-60000.
Question 6) Saving percentage of monthly income?

52
From the above diagram, we can see that 62.1% of the population saves
up to 10% of their income, 24.2% of the population saves between 10-
20% of their income, 9.1% of the population saves between 20-30% of
their income and the rest of the population saves more than 30% of their
income.

Question 7) In which assets you invest from your savings?

From the above diagram, we can see that 45.8% of the population likes
to invest their savings as bank deposit, 11.9% of the population likes to
invest their savings as insurance, 5.1% of the population likes to invest
their savings in post office, 42.4% of the population likes to invest their
savings in stock market, 5.1% of the population likes to invest their

53
savings in non-financial assets and others like to invest their savings in
other different methods.

Question 8) Investment time?

From the above diagram, we can see that 51.5% of the population likes
to invest their savings for a period of less than 6 months, 22.7% of the
population likes to invest their savings for a period between 6 months to
1 year, 15.2% of the population likes to invest their savings for a period
more than 3 years and 10.6% of the population likes to invest their
savings for a period between 1-3 years.

Question 9) Which factor do you consider before investing?

From the above diagram, we can see that 38.5% of the population likes
to invest their savings considering safety of principle, 28.8% of the

54
population likes to invest their savings considering low risk, 28.8% of
the population likes to invest their savings considering high returns and
others likes to invest their savings considering maturity period.

Question 10) What rate do you want your investment to grow?

From the above diagram, we can see that 48.1% of the population wants
their investment to grow at an average rate, 28.8% of the population
wants their investment to grow fast and 23.1% of the population wants
their investment to grow steadily.

Question 11) Investment advisor?

From the above diagram, we can see that 26.9% of the population takes
their investment advice from newspaper, 57.7% of the population takes
their investment advice from family or friends, 23.1% of the population

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takes their investment advice from books, 48.1% of the population takes
their investment advice from internet, 7.7% of the population takes their
investment advice from magazines and 19.2% of the population takes
their investment advice from a professional advisor.

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 CHAPTER 5
FINDINGS, SUGGESTIONS, AND CONCLUSIONS

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 5.1 FINDINGS
• In the study the I have investigated 66 respondents and the study on sex
reveals that 54.5 percentage of the respondents are female. So, it is
inferred that most of the Investment decisions are taken by female
respondents only.
• Age is an important factor which influences the behaviour of the
individual investors and the investing ability also differs according to the
age of investors. Most of the investors are in the age group between 20
to 30 years. It is clear that young investors prefer to invest and take more
Risk.
• The researcher brought out the educational level of the respondents.
Among the sample investors, 42.4 percentage of them are educated up
to graduate level.
• Occupation is one of the important deciding factors in the investor’s
behaviour in making investment. People are investing irrespective of
their occupation and the study reveals that most of the investor are
students.
• Money is the important factor while making investment decisions and
the investable amount depends upon the monthly income of the family.
It is understood that most of the investors have a monthly income of up
to Rs.20000.
• The investments are directly proportional to savings, so it important to
save money from one’s income to invest it. It is understood that most of
the investors saves around 10% of their income.
• Regarding the investment options majority of the investors have made
their investment only in banks as deposits. Deposits include fixed
deposits, recurring deposits, etc.
• I also found out the investor’s preferred amount of time they want their
savings to be invested for. It is clearly visible that 51.5 percentage of
them want their savings to be invested for less than 6 months.
• Many people consider factors before investing their savings. It is clearly
visible majority of people, i.e., 38.5 percent of people considers safety
of the principle.

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• I also found out that majority of the people, i.e., 48.1 percent of people
wants their investments to grow at an average rate.
• Many people take investment advice before investing, because many of
the people are not aware how to invest. From the study, it is clear that
people prefers to take advice from family and friends.

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 5.2 SUGGESTIONS
• Investors are informed that their time horizon, rather than a long-term
investment, depends on their investment objectives and types.
• Instead of making bad investment decisions, it is best for investors to get
help from financial planners.
• Insurance is security and not an investment. Therefore, investors are
cautioned that they should invest in pure hedging plans rather than
premium policies as the premium is lower and the surplus can be
capitalized elsewhere and the return earned.
• It has also been suggested that investors make investments as a last resort
and often wrong investments. As a result, instead of making a last-
minute commitment, investors must prepare their investments early in
the year.
• Today, the return to many investments in square measures has supported
the market situation; Therefore, it is best that investors keep up to date
with new advice and changes to conditions.
• Not only do you need to leverage investment opportunities where you
need to invest, you also need to remember investment opportunities. In
this way, they make the necessary changes to keep your portfolio
profitable.
• SEBI has changed the rules for providers and users of portfolio
management services, as the minimum amount for the portfolio
management service is high and the fees are much higher than under the
previous rules. Therefore, it is recommended that authorities review the
principles of the portfolio management service so that many investors
choose the service.
• Investors are cautioned that at least the capital portion of their portfolio
should be reviewed frequently so that the necessary changes can be made
if the stock does not work.
• The investor has to invest their money in less risky securities like mutual
fund, debenture. Because the above securities have a minimum risk.
While comparing equity shares.

60
• The gold investors can opt the gold bars or gold coins because it has no
wastages.
• The real estate investors can purchase urban land because it will have
increase in value day by day.
• Post office may offer more savings schemes compared with banks. So
that the investors can properly invest their money in postal schemes.
• If the investors preferred to cover their risk of life and to get tax benefits,
they can opt the insurance schemes.

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 5.3 CONCLUSION
The present study endeavoured to give a look on behaviour of investors towards
different investment avenues. The different avenues can be preferred provided it
is put forth before different age group and different working profession. Facts
revealed in this study highlight the perception of varied age group of investors
who desire to invest in different avenues which give high returns at minimum
risk, keeping growth prospect in the centre. Investments are highly affected by
the perception of the group of people and also the information and knowledge
they have about the different investment schemes available in the present market.
There are also group of people who are aware about the various investment
schemes but hesitate to invest because of the high fluctuations in the current
economy of the country. People invest with different intentions behind their
investments like tax savings, children’s education and marriage, retirement plans,
etc. Therefore, it has become so difficult today to decide which investment
avenues is best, which can give an attractive return with high risk or some
investment offers low returns with low risk.
The important objective behind investment is found to be minimizing the risk and
to earn maximum return. Internet and family/friends play a major role as source
of information for investors. Investors are indulged in investment activity is
respective of their income level and commonly invest 0 to 15 percent of their
income.
“No pain no gain” it is the golden principle of investment management. In this
fast-moving world, we can earn more and more money. More risk leads to more
profit. Investors cannot avoid risk but they can minimize the risk by investing
their money in various forms of investments so that they can get a moderate profit.
Hence the researcher has concluded that most of the investors prefer bank
deposits.
Investing in stock markets is a major challenge ever for professionals. Derivatives
acts as a major tool for reducing the risk involved in investing in stock markets
for getting the best results out of it. The investors should be aware of the various
hedging and speculation strategies, which can be used for reducing their risk.
Awareness about the various uses of derivatives can help investors to reduce risk

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and increase profits. Though the stock market is subjected to high risk, by using
derivatives the loss can be minimized to an extent.

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CHAPTER 6
REFRENCES

64
• https://www.jetir.org/papers/JETIRC006263.pdf
• https://www.researchpublish.com/upload/book/A%20STUDY%20ON
%20INVESTOR-8585.pdf
• https://www.researchgate.net/publication/341052891_To_Study_the_I
nvestors_Preferences_for_their_Investments
• https://www.worldwidejournals.com/indian-journal-of-applied-
research-(IJAR)/fileview/a-study-on-investors-preference-towards-
various-investment-
avenues_September_2019_1567598697_6913860.pdf
• https://citeseerx.ist.psu.edu/viewdoc/download?doi=10.1.1.300.7706&r
ep=rep1&type=pdf
• https://www.studocu.com/in/document/apj-abdul-kalam-technological-
university/mba/a-study-on-investors-preferences-towards-various-
investment-avenues-in-capital-market-with-special-reference-to-
derivatives/16702939

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ANNEXURE

66
1. Name
____________________
2. Gender
• Male
• Female
• Other

3. Age
• 20-30
• 31-40
• 41-50
• 50 and Above

4. Education
• Post graduate
• Graduate
• Non-graduate

5. Occupation
• Salaried
• Business
• Housewife
• Student
• Professional

6. Income
• Up to 20000
• 20001-40000
• 40001-60000
• Above 60000
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7. Savings % of monthly income
• 0-10%
• 10-20%
• 20-30%
• 30% and above

8. In which assets you invest from your saving?

• Bank deposit
• Insurance
• Post office
• Stock market
• Non-financial assets

9. Investment type
• Less than 6 months
• 6 months – 1 year
• 1-3 years
• More than 3 years

10. Which factor do you consider before investing?

• Safety of principle
• Low risk
• Maturity period
• High returns

11. What rate do you want your investment to grow?

• Steadily
• Fast
• At an average rate

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12. Investment advisor
• Newspaper
• Family and friends
• Books
• Internet
• Magazines
• Advisor

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