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AMITY BUSINESS SCHOOL

Report On

“Exploring the factors impacting the

investment decision.”

Submitted in partial fulfillment of the course in

Marketing Research

Submitted to:

Dr. Shalini Trivedi Assistant Professor, Department of Economics, Amity Business School, Amity

University

Submitted By:

Divya Darshan (E-37)

Abhishu Chanana (E-26)

Isha Vij (E-11)

Shilpa Sharma (E-05)

Riju Sharma (E-04)

MBA class of 2012 (section E)

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Amity Business School

Amity University Uttar Pradesh

CERTIFICATE

This is to Certified that this project report “exploring the factors

impacting the investment decision” is the bonafide work of “ Divya

Darshan, Abhishu Chanana, Isha Vij, Shilpa Sharma, Riju Sharma” who

carried out the project work under my supervision.

Signature

Date:

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DECLARATION

We, Divya Darshan, Abhishu Chanana, Isha vij, Shilpa Sharma, Riju

Sharma, declare that all information presented in this project has been

compiled by us. Any quoting is stated as so and when references are

made to previous work, they appear as references in the end of the report.

No part of this project has been submitted in support of an application for

another degree or qualification from this university or any other institute

of learning.

Divya Darshan

Abhishu Chanana

Isha Vij

Shilpa Shama

Riju Sharma

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ACKNOWLEDGEMENT

It is said, the most important single word is we and the zero important

single word is I. This is true even in today‟s modern era. It is absolutely

impossible for a single individual to complete the assigned job without

help and assistance from others.

It is our greatest pleasure to acknowledge sincere gratitude towards Dr.

Shalini Trivedi, Assistant Professor, Department of Economics, Amity

Business School, Amity University for the completion of the project

work.

We are also thankful to all of our friends and batch mates for their help in

completing this project work.

Divya Darshan

Abhishu Chanana

Isha Vij

Shilpa Shama

Riju Sharma

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Abstract

This study aims at gaining knowledge about different investment options available in

india and exploring various factors that influence investment decision of an

individual. Individuals may be same in all aspects but their investment behavior and

their investment planning are very different.

Individual‟s age, income, sex, profession and other such demographics, influence the

investment pattern. Apart from demographics there are other factors also which

influence investment decision of individual. Period of investment, risk taking,

liquidity and safety are some such factors that influence investor‟s decision. Hence

keeping this in mind, the present study is an attempt to find out Factors which affects

individual investment decision and Differences in the perception of Investors in

the decision of investing.

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INDEX

Introduction

Review of literature

Research methodology

Avenues of investment

Fixed deposits

RBI bonds

Insurance

Post office savings

Gold

Mutual funds

Analysis and interpretation

Recommendations

Conclusion

Limitation of research

Further scope of study

Appendix

Questionnaire

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Introduction

Background of study

'It is not how much you save but where you invest it that counts'

Investor needs to explore various factors that influence investment before investing

his wealth and also investor needs to know the value of his future profits in today's

terms for all the investment opportunities. Only then can he make the best choice.

'Saving' is not consuming everything today and leaving something for tomorrow

whereas 'Borrowing' is consuming more than what one has today, expecting to save

more later to pay up for the excess consumption now.

While 'saving' is being conservative and wise, 'borrowing' is being risky and foolish

unless for a basic need. Hence, it makes sense to borrow only when one is sure that in

the future he will be able to save enough not only to pay up for his borrowings but

also to see him through the days when he cannot earn.

Saving is useful only if invested somewhere. Many individuals find investments to

be fascinating because they can participate in the decision making process and see

the results of their choices. Not all investments will be profitable, as investor wills not

always make the correct investment decisions over the period of years; However,

you should earn a positive return on a diversified portfolio. Virtually everyone makes

investments. Even if the individual does not select specific assets such as stock,

investments are still made through participation in pension plan, and employee

saving programme or through purchase of life insurance or a home or by some

other mode of investment like investing in Real Estate (Property) or in Banks or in

saving schemes of post offices. Each of this investment has common characteristics

such as potential return and the risk you must bear.

In this paper we are trying to find out:

1. Different investment options available in India.

2. Factors that affect individual‟s investment decision.

3. Relation between demographics of individual and investment decision.

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Statement of problem

In our study, we are trying to keep the statement of problem simple and brief. Our

study focuses on finding out different investment options available with an investor in

India, factors that investor keep in mind while making an investment and how

demographics of an investor influence his investment decision.

Review of literature

Earlier studies have been have been carried out to gain knowledge regarding

institutional investments. Researches on individual investment are very less and

limited to only one or two variables. Some are based only on demographics influence

on investment decision while some other are based on other factors like risk taking,

liquidity, inflation, etc. No research considered all these factors together. Some were

based only on gender and age. Others were based on only on risk taking by an

individual.

Research paper “Factors Influencing Investment Decision of Generations in India:

An Econometric Study” (2010) by PGH students, ABV­Indian Institute of

Information Technology and Management, Gwalior, India, used only „gender‟ and

„sex‟ as variables that influence investment decision. The scope of research was

limited and hence did not displayed a true picture of factors influencing investment

decision.

Dunham (1984) admits that although personality factors can change over an

extended period of Time, the process is slow and tends to be stable from one situation

to another. Therefore, these factors are expected to influence the decision

making behavior of an individual. Barnwell (1987) finds that an individual investor

can be found by lifestyle characteristics, risk aversion, control orientation

and occupation. Barnwell (1988) suggests the use of psychographics as the basis of

determining an individual‟s financial services needs and takes one closer

to the truth from the customer‟s perspective of need to build a marketing program.

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Warren et al. (1990) and Rajarajan (2000) predict individual investment choices (e.g.,

stocks, Bonds, real estate) based on lifestyle and demographic attributes.

These investors see rewards as Contingent upon their own behavior (Rajarajan, 2002).

Gupta (1991) argues that designing a portfolio for a client is much more than merely

picking up securities for investment. The Portfolio manager needs

to understand the psyche of his client while designing his portfolio. Risk Tolerant

investors behave as though they can control risk. This suggests that risk tolerance

serves as a proxy for an „illusion of control‟ and thus overconfidence

[Madhusoodanan (1997); Odean (1998); Barber and Odean (2001); Benartzi

and Thaler (2001); Gervais and Odean (2001); And Daniel and Huberman (2003)].

Karthikeyan (2001) has conducted research on Small Investors Perception on

Post office Saving Schemes and found that there was significant difference

among the four age groups, in the level of awareness for kisan vikas patra (KVP),

National Savings Scheme (NSS), and deposit Scheme for Retired Employees

(DSRE),and the Overall Score Confirmed that the level of awareness

among investors in the old age group was higher than in those of young age

group. NO differences were observed among male and female investors except for

NSS and KVP.

The present study aims to put on some knowledge about key factors that influence

investment Behavior and ways these factors impact decision making process

among individuals. Also our study focuses on different avenues available for

investment in India. In our research we are trying to cover all the aspects that

influence investment decision and also how theses individual maintain investment

portfolios in order to gain maximum return and maintain maximum safety.

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Research Methodology

Introduction

This chapter aims at understanding the research methodology used in this marketing

research project, establishing a framework of evaluation of primary and secondary

research. The techniques and concepts used during primary research in order to arrive

at the findings have been explained which are also dealt with and lead to a logical

deduction towards the analysis and results.

Research Objective:

1. To determine the various investment avenues available in India.

2. To explore various factors that influence individual‟s investment decision.

3. To gain knowledge about how demographics and investment decision are

related.

Research Design

The researchers propose to first conduct an intensive secondary research to

understand the full impact and implication of the industry, to critically review the

industry norms and reports, on which certain issues shall be selected, which the

researchers feel remain unanswered or liable to change, this shall be further taken up

in the next stage of exploratory research where focused group shall screen through.

This stage shall help the researchers to restrict and select only the important question

and issue, which inhabit growth and segmentation in the industry. These set of

questions are then proposed to be studied under a descriptive research setting finally

leading to formation of hypothesis and testing the same under causal research.

Types of Research

On the basis of fundamental objectives of the research, marketing research projects

are classified into two branches:

Exploratory Research

Conclusive Research

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Exploratory Research:

Exploratory research is conducted when one is seeking insights into the general nature

of a situation, the possible decision alternatives, and the relevant variables that need to

be considered. While conducting our study we used exploratory research, which was

flexible and was aimed at identifying all the attributes an individual might look at

while investing. We undertook an intensive review of investment avenues in India,

and screened some issues which we as researchers felt needed more clarification or

study.

Descriptive Research

The exploratory research conducted brought out a host of factors which affect the

individual‟s investing attitude. These factors were then filtered to form a set of the

most important alternatives, which might affect an individual‟s investment decision.

Universe

To define it for the preliminary measures “It is a set of individuals constitutes a

population or universe”. According to this definition a research cannot proceed

without a set of individuals. So likewise we selected the Delhi & NCR as our

universe.

Sampling Type

The type of sampling used non probabilistic is convenience sampling and snowball

sampling (referral). Samples were also collected on the basis of different age groups

(Up to 20 years, 20-35 years, 35-50 years, 50-60 years and above 60 years). More

preference was given to the age group of 25-50 yrs.

Sample Size

Our sample size consists of 80 respondents to get a fair idea about the research

problem defined and after discussion with the marketing research professor.

Data collection procedure

Questionnaire

The questionnaire method has come to the more widely used and economical means

of data collection. The common factor in all varieties of the questionnaire method is

its reliance on verbal responses to questions, written or oral. The researchers found it

essential to make sure the questionnaire was easy to read and understand to all

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spectrums of people in the sample. It was also important as researchers to respect the

samples time and energy hence the questionnaire was designed in such a way, that its

administration would not exceed 4-5 minutes. These questionnaires were personally

administered. As far as possible the questionnaires were filled by the researchers

themselves and not given to the respondents.

We did a descriptive analysis by constructing a questionnaire with the help primary

data collected. We personally went to the respondents and requested them to provide

us with the details for filling the questionnaire.

Field work

Field work is a general descriptive term for the collection of raw data direct from the

respondents, as opposed to secondary research. It plays an important role in collecting

the data. As our sample size was determined to be 80 and we were a 5-member team,

we decided to divide the work equally. In our research we went to different places

such as malls, offices to get the questionnaire filled, also we took telephonic interview

for the same.

Some important points which each member kept in mind while doing the fieldwork-

To make the respondents comfortable before questioning him by introducing

ourselves as students of Amity Business School and ensuring the respondent

that all information collected is only for academic purpose and will be kept

absolutely confidential.

Ensure that we fill the questionnaires ourselves.

Not to lead a person into any preconceived notion.

Not to influence the respondents answers in any way/form.

Use simple language, so that the technical language does not intimidate the

respondent.

Data collection Technique

Primary data

Which is collected by new research called primary data.

Questionnaire

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Secondary data

Already existing data is called secondary data. I collected them by following method

–

Internet

Books

Published Reports

Data Interpretation Tools

Following software‟s has been used during analysis and compiling of data.

SPSS

Microsoft Excel

Microsoft Word

INVESTMENT AVENUES

Fixed Deposits

If you're in two minds about Fixed Deposits, here are some pros that should help you

make your decision:

1. SAFETY FIRST

Above all else, Safety is what makes bank deposits most appealing investments.

Banks are controlled by the Reserve Bank of India and so have to adhere to

several policies and operational parameters, which means that you have the

security of knowing that your money is in safe hands. Yet another safety net,

should anything (which is unlikely) go wrong!

2. INTEREST UP

This is where you benefit most! Most banks offer their own interest rates on

Fixed Deposits, which are always higher than what you'd get from a Savings

Account. Add to that the fact that interest is compounded once a quarter, and

you've got a higher effective rate than you'd get elsewhere. Reason enough to

invest in them, don't you think?

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3. LIQUIDITY FLOW

Having a Fixed Deposit doesn't mean your cash flow dries up! You can obtain

loans up to 75% of your deposit amount. You'll just be charged an interest that is

2% more than the rate of interest earned on the deposit.

4. SHEER CONVENIENCE

Simply put, this one is the ease factor! Thanks to a wide network of branches and

a service-oriented working style, banks now offer extraordinary convenience of

transactions, whereby you can operate your accounts from any of your bank's

branches in the city and sometimes from any branch in the country. You've got

enough to cope with already - banks make sure your investments, at least, can

be handled with utmost expedience!

RBI Bonds

ELIGIBILITY FOR INVESTMENT

A) As an individual

Who is not a Non-resident Indian

In his or her individual capacity or

On joint basis, or

Anyone or survivor basis, or

On behalf of a minor as father/mother/legal guardian

B) As a Hindu Undivided Family

Minimum Investment Rs.1000/-

Maximum Investment Unlimited in multiples of Rs.1000/-

Issue Price At par i.e. at Rs.100.00 percent

Interest Rate 8.0% p.a. TAXABLE

Effective Yield 8.32%

Interest option Half yearly or cumulative

Maturity Value The maturity value on Cumulative Bonds shall be Rs. 1601 for

every Rs. 1000/

Interest Payment dates The interest payment dates for Non-cumulative

bonds is 31st July and 31st January

Tenure 6 Years

Transferability Non Transferable

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Tradability Not tradable in secondary market

Loan Facility The Bonds shall not be eligible as collateral for loans from

banks, financial institutions and NBFC

Tax concession Interest on the bonds will be eligible for deduction u/s 80L

of the Income-tax Act, 1961 upto Rs.15,000

Form The bonds will be issued in demat form in bond Ledger Account

Investment option Cheque / Pay order / DD

Value date Date of realization of the cheque/DD/Date of cash deposit at the

Bank

Redemption No interest will be paid after the maturity

Nomination Facility

a. This facility will be available for Individual investment for sole holder

or surviving holder basis

b. This facility will not be available for joint holdings and minor

investment

Premature Encashment option:

This is a unique feature of this bond

1. Minimum lock in period:

3 years after which the investor can surrender the bond anytime

2. Redemption payment dates:

Redemption payment will be made on the following interest payment date i.e.

either on 31st July or 31st January every year

3. Penalty for early redemption

50% of interest due for the last 6 months will be recovered irrespective of

cumulative or non-cumulative bonds

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Insurance

Risks and uncertainties are part of life's great adventure -- accident, illness, theft,

natural disaster - they're all built into the working of the Universe, waiting to happen

Life insurance as "Investment":

Insurance is an attractive option for investment. While most people recognize the

risk hedging and tax saving potential of insurance, many are not aware of its

advantages as an investment option as well. Insurance products yield more

compared to regular investment options, and this is besides the added incentives

(read bonuses) offered by insurers.

You cannot compare an insurance product with other investment schemes for the

simple reason that it offers financial protection from risks, something that is missing

in non-insurance products.

In fact, the premium you pay for an insurance policy is an investment against risk.

Thus, before comparing with other schemes, you must accept that a part of the total

amount invested in life insurance goes towards providing for the risk cover, while the

rest is used for savings.

In life insurance, unlike non-life products, you get maturity benefits on survival at

the end of the term. In other words, if you take a life insurance policy for 20 years

and survive the term, the amount invested as premium in the policy will come back

to you with added returns. In the unfortunate event of death within the tenure of the

policy, the family of the deceased will receive the sum assured.

Life insurance as "Risk cover":

First and foremost, insurance is about risk cover and protection - financial

protection, to be more precise - to help outlast life's unpredictable losses. Designed

to safeguard against losses suffered on account of any unforeseen event, insurance

provides you with that unique sense of security that no other form of investment

provides. By buying life insurance, you buy peace of mind and are prepared to face

any financial demand that would hit the family in case of an untimely demise.

To provide such protection, insurance firms collect contributions from many people

who face the same risk. A loss claim is paid out of the total premium collected by the

insurance companies, who act as trustees to the monies.

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Insurance also provides a safeguard in the case of accidents or a drop in income

after retirement. An accident or disability can be devastating, and an insurance policy

can lend timely support to the family in such times. It also comes as a great help

when you retire, in case no untoward incident happens during the term of the policy.

Life insurance as "Tax planning":

Insurance serves as an excellent tax saving mechanism too. The Government of India

has offered tax incentives to life insurance products in order to facilitate the flow of

funds into productive assets. Under Section 88 of Income Tax Act 1961, an

individual is entitled to a rebate of 20 per cent on the annual premium payable on

his/her life and life of his/her children or adult children. The rebate is deductible

from tax payable by the individual or a Hindu Undivided Family. This rebate is can be

availed upto a maximum of Rs 12,000 on payment of yearly premium of Rs 60,000.

By paying Rs 60,000 a year, you can buy anything upwards of Rs 10 lakh in sum

assured. (depending upon the age of the insured and term of the policy) This means

that you get a Rs 12,000 tax benefit. The rebate is deductible from the tax payable

by an individual or a Hindu Undivided Family

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Post Office Schemes

SCHEMES INTEREST RATE TERM MIN MAX

INVESTMENT

PREMATURE

WITHDRAWAL

TAX

BENEFIT

LOAN

FACILITY

National

Savings

Certificate

8% compounded half

yearly 6 years

Rs 100 - no

upper limit. No

U/s 80C of

the IT Act. No

Post Office

Time Deposit

1 yr.- 6.25%, 2 yr.-

6.50%, 3 yr.- 7.25% , 5

yr.- 7.50% per year

compounding quarterly

but paid annually

1- 5

years

Rs 50 - no

upper limit Yes Nil No

Public

Provident

Fund

8% per annum 15

years

Rs 500 - Rs

70,000 Yes

U/s 80C and

10 of the IT

Act.

Yes

Post Office

Monthly

Income

Scheme

8% per annum payable

monthly 6 years

Min. Rs 1,000;

Max. Single

acct. Rs

300,000 - Joint

acct. Rs

600,000

Yes Nil No

Kisan Vikas

Patra

Amount invested

doubles in 8years

7months

8 years

7

months

Rs 100 - no

upper

investment

limit.

Yes Nil Yes

Senior

Citizens

Savings

Scheme

9% per annum payable

quarterly 5 years

Min. Rs 1,000

Yes Nil No Max. Rs

1,500,000

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Gold

Despite recent hiccups, gold is an important and popular investment for many

reasons:

In many countries gold remains an integral part of social and religious

saint-

Superstition about the healing powers of gold persists. Ayurvedic medicine in

India recommends gold powder and pills for many ailments.

Gold is indestructible. It does not tarnish and is also not corroded by acid

except by a mixture of nitric and hydrochloric acids.

Gold has aesthetic appeal. Its beauty recommends it for ornament making

above all other metals.

Gold is so malleable that one ounce of the metal can be beaten into a sheet

covering nearly a hundred square feet.

Gold is so ductile that one ounce of it can be drawn into fifty miles of thin

gold wire.

Gold is an excellent conductor of electricity; a microscopic circuit of liquid

Gold is so highly valued that a single smuggler can carry gold worth Rs. 50

lakh underneath his shirt.

Gold is so dense that all the 90,000 tonnes estimated to have been mined

through history could be transported by one single modern super tanker.

Finally, gold is scam-free. So far, there have been no Mundra-type or Mehta-

type scams in gold.

Thus, the lure of this yellow metal continues.

On the other hand, it is interesting to note that apart from its aesthetic appeal gold

has no intrinsic value. You cannot eat it, drink it, or even smell it. This aspect of gold

most useless thing in th

Why People Buy Gold?

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(a)

malleability, ductility, high electrical conductivity and its ability to adhere firmly to

other metals. There is a wide range of industries, from electronic components to

porcelain, which use gold. Dentistry is an important user of gold. The jewellery

industry is another.

(b) Acquisition of gold because of its long-proven ability to retain value, and to

appreciate in value.

(c) Purchases by the central banks and international monetary organisations like the

International Monetary Fund (imf).

The Gold Deposit Scheme

In an attempt to mobilize the idle gold savings in households across the

country, the Government announced a Gold Deposit Scheme. According to its terms,

the banks were allowed to accept physical deposits of gold, and issue interest

bearing certificates in return, which can be reclaimed for gold on maturity. Union

Finance Minister Yashwant Sinha has thrown in a host of tax sops to attract

investors. The value of the gold deposited and the interest earned on it is exempt

from wealth tax. Further, any capital gains made on these gold bonds through

trading or at redemption will be exempt from capital gains tax. The returns are

around 3% per annum. Certain banks, like the State Bank of India, also offer benefits

like rupee loans of upto 90% of the gold deposit, with the interest rate linked to the

Prime Lending Rate.

While determining the value of gold ornaments for the purpose of wealth tax,

making charges should be ignored, unless the ornaments are studded with precious

stones. The value of gold contained in the ornaments can be reduced by 15% to 20%

because the dealer invariably deducts 15% of the ruling rate of standard gold when

ornaments are sold in the open market.

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Mutual Funds

1) Reduce your risks - Mutual Funds diversify your portfolio by investing in various

securities & minimize the risk.

2) Maximise your opportunities - The fund managers with the strong research take

explore new investment options make available opportunities for your investments

to flourish.

3) Liquidity: Quick access to your money - Mutual Funds can be bought and sold

on any dealing day

4) Affordability - nvest in mutual

fund as the minimum investment in mutual fund starts from Rs.500/-. A Mutual

Fund because of its large corpus allows even a small investor to take the benefit of

its investment strategy.

5) Low Costs - Mutual Funds are a relatively less expensive way to invest compared

to directly investing in the capital markets because the benefits of scale in

brokerage, custodial and other fees translate into lower costs for investors.

6) Tax Benefits - The tax benefits that Mutual Funds investors enjoy at the moment

is the treatment of long-term capital gains.

Investors have two options as regards long-term capital gains:

Tax @ 10% on capital gains without indexation (plus surcharge)

Tax @ 20% on capital gains after indexation (plus surcharge)

7) Transparency - The investor gets regular information on the value of his

investment in addition to disclosure on the specific investments made by the fund,

the proportion invested in each class of assets and the fund manager's investment

strategy and outlook.

8) Regulated for investor protection - All Mutual Funds in India are registered with

the regulator of the Indian securities industry - the Securities and Exchange Board of

India (SEBI). The funds function within the framework of regulations designed by SEBI

and these regulations are intended to protect the interests of investors. The

operations of the mutual funds are also regularly monitored by SEBI.

Equity Diversified Funds -

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Diversification - Mutual Funds reduces the risk by investing in all the sectors.

Instead of putting all your money in one sector or company it's better to invest in

various good performing sectors as you reduces the risk of getting involved in a

particular sector/company which may perform or may not.

Who should invest - This is an ideal category for those who want to participate in

stock market & knows the risk involved in stock market but have few rupees to

invest in bluechip stocks.

Index Funds -

Follow the index - These are the index-based funds, which move with the likes of

Sensex & Nifty. These fund charges NIL or very low entry/exit loads.

Sector Fund -

Sector - Sector Schemes follow particular sector.

Who should invest - You have to be selective while investing in these funds, as you

need to select particular sector, which will perform better in the future. Investing in

these funds carries some amount of risk but also give you more returns.

Balanced Funds

Balanced Act - Balanced funds gives you the stability with the potential to grow with

the equity help of equity investments. These funds invest in both Equity & Debt

markets.

Who should invest - The balanced funds are for those, who want to enjoy the

appreciation effects of equity market but at the same time like to play safe with less

volatile debt market. In this volatile market it is good to invest in balanced funds as

they carries less risk compare to equity funds.

Equity Linked Tax Savings Schemes (ELSS) -

Enjoy tax benefits - These schemes are becoming more popular as traditional ways

of tax saving becoming less interesting with declining interest rates.

Who should invest - Equity Linked Savings Schemes (ELSS) is an ideal way to save

on tax as well as staying invested in equity mutual funds.

Debt Funds -

- 23 -

Banking on Debt Markets - Debt funds invest in the government securities,

Corporate Bonds, Treasury Bills, etc.

Who should invest - The conservative investors like to go for capital safety.

Gilt Funds -

Government Sec. - Gilt funds invest in government securities.

Who should invest - The investors who like to avail the benefits of capital safety

with government security.

MIP -

Monthly Income - These schemes gives you monthly income.

Who should invest - Those who seek monthly income. In the current scenario where

debt market is very volatile it's better to invest in hybrid funds like MIP with suitable

time horizon for capital appreciation

STP -

Short-term Plans - These schemes provides short-term saving option with more

liquidity than FD's to park your investments.

Who should invest - Those who seeking for income in short-term investments of

6-10 months with more liquidity than Bank fixed deposit?

- 24 -

ANALYSIS AND INTERPRITATION

1. Relation between “annual income” and “ percentage of their income put in

savings”

Result here clearly shows that more than 50% of people appeared in this research

were able to put their earnings into investments by only 10%to 20%.

Those earning between 3.5 lakhs to 5 lakhs lie in this limit to a maximum extent .

22 people lie in the bracket of earnings of 3.5 to 5 lakhs. Then comes the 14 of

income below 2 lakh.

The income put into investment above 30% are only 10 out of 71 sample . And

people earning more than 7 lakhs and more were 12.

2. Relation between “annual income” and “ age group”

Results here clearly shows that 36 people lie in the bracket on age 20 to 35, the

young

Indians. As the age group has increased the no of people is decreasing except in the

last section of “above 7 lakh category” where the number has increased with

increasing age group.

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3. Relationship between “annual income” and “ profession”

The maximum no of people participated in the survey were 27 from the service

sector and at the second level businessman 21.

The category of annual income of 3.5lakh to 5 lakhs contain the maximum number

of people.

4. Relationship between age group and investment- Equities

- 26 -

5. Relationship between age group and type of investment- mutual funds

6. Relationship between age group and investment- gold

- 27 -

7. Relationship between age group and investment- insurance

8. Relationship between age group and investment- bonds

- 28 -

9. Relationship between age group and investment- P.O. savings

10. Relationship between age group and investment- Fixed deposits

- 29 -

11. Relationship between age group and investment- Fixed deposits.

12. Relationship between age group and investment- Infrastructure

- 30 -

13. Relationship between age group and the determinants of investment- liquidity.

14. Relationship between age group and the determinants of investment- Safety.

- 31 -

15. Relationship between age group and the determinants of investment- Returns.

- 32 -

16. Relationship between the profession and what define their better choice of

return with respect to time.

17. Relationship between the anuual income and number of investment that they

have.

- 33 -

18. Relationship between equity as investment at various ranks and profession.

19. Relationship between Mutual Funds as investment at various ranks and

profession.

- 34 -

20. Relationship between pention plans as investment at various ranks and

profession.

21. Relationship between insuarance as investment at various ranks and

profession.

- 35 -

22. Relationship between bonds as investment at various ranks and profession.

23. Relationship between PO savings as investment at various ranks and

profession.

- 36 -

24. Relationship between fixed deposits as investment at various ranks and

profession.

25. Relationship between Commercial Papers as investment at various ranks and

profession.

- 37 -

26. Relationship between Gold as investment at various ranks and profession.

27. Relation ship between infrastructure as investment plan and the profession.

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Conclusion:

It can be concluded from the above study and analysis that individual today are

matured investors. They invest according to the risk preference. The most preferred

investment is that of gold and fixed deposit because the risk involved is minimum and

the return is steady.

Investment and mutual fund show a mixed response whereas; commercial papers have

the least number of investors.

Investors invest for longer period so that the returns they get are steady and

maximum. While people only the young generation is ready to take risk and earn

quick returns by investing in equity.

While investing, investor‟s main determinant is security of their investment.

In order to neutralize their risk and maximize their return, inventors do not depend on

single investment; they maintain a mixed portfolio, with 2-4 investments.

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Limitations of the research

Any research or study always has some limitations under which this has to be

undertaken. This one too was not an exception. These limitations are poised by the

environment - some external and some inherent. This study has been conducted with

utmost consideration to the adequacy of data and quality of information, though as

mention earlier the reliance on the sources cannot be minimized to zero in context of

precision. The limitation can be enlisted as hereunder:-

We had a limited time to complete this study in 1.5 months.

Due to the limited time we cannot go to vast geographical area, our study is

limited to the visitors of fast food joints.

Respondents are not willing to fill the questionnaire.

Very often the respondent do not express their true feelings, in such case their

habit, preference, practice, cannot be assessed correctly.

Reliability of information collected from various public information sources

such as magazines and website.

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Further Scope of Study

We could have included several other aspects while conducting the research which

would have helped us to gain an insight on the various factors influencing investment

decision.

Some of the further studies which can be covered by this research could have been:

The main emphasis was laid on the age group of below 20-35. So the more

extensive research on the preferences and behavior patterns of other age

groups above 35 could have been taken into consideration.

We could only cover the research majorly in Delhi & NCR region and less

emphasis were paid on outside respondents. This research could have covered

outside Delhi respondents.

We have done analysis on central tendencies of the data collected of the

questionnaire and the cross tabulation. Other statistical measures were not

taken into account while analyzing the data.

The main focus was laid on the individuals investing behavior and preferences

of different investment avenues. Here we could not include the current relation

between the lifestyle of the consumers and their investing behavior, also we

could not include what an individual expects in near future as a investor.

Different scaling and forecasting techniques could have been used to interpret

the data.

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Appendix

References:

1. http://ipublishing.co.in/ajmrvol1no1/EIJMRS1025.pdf

2. Barnewall MacGruder M (1988), “Examining the Psychological Traits of Passive and Active Investors”, Journal of Financial Planning, available at www.fpanet.org/journals/ articles/1988_issues.

3. http://en.wikipedia.org/wiki/Investment

4. http://www.indiapost.gov.in/netscape/Banking.html

5. http://www.rbi.org.in/Scripts/BS_viewsavingbonds.aspx

6. http://business.mapsofindia.com/investment-industry/top-10-investment-

options.html

7. http://www.rupeetimes.com/article/fixed_deposits/fixed_deposits_in_india

_benefits_drawbacks_and_precautions_1103.html

8. www.licindia.com

9. http://www.indianmba.com/Faculty_Column/FC314/fc314.html

10. http://www.mutualfundsindia.com/investment.asp

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Questionnaire

Exploring the factors impacting the investment decision

1. What is your annual income ?

Below 2 lakh Between 2 lakh and 3.5 lakh Between 3.5 lakh and 5 lakh Between 5 lakh and 7.5 lakh 7 lakh and above

2. Gender?

Male female

3. What percentage of your income are you able to put for savings?

0 10 % 10 20 % 20 30 %

30 40 % More than 40 %

4. Which age group do you fall?

Below 20 Between 20 to 35 Between 35 to 50 Between 50 to 60 60 and above

5. What is your profession?

Business Service Self employed Student Retired Agriculture Others

6. What kind of savings investment do you invest in?

Equities Mutual Funds Debt Insurance

Bonds P.O. Savings Fixed Deposits Commercial Paper

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7. What are the determinants for selecting a financial investment?

Liquidity Safety

Return

8. Which of the insurance products are you aware of?

Term insurance Whole life policy Annuity pension

Endowment plan Pure endowment plan

9. What will define you better?

Quick, Short run returns Long Term, Steady Returns

10. What medium do you prefer for your investments?

Banks Agents

Brokers Financial Planners

11. Do you consider GOLD as a good investment?

Yes No

12. Do you consider INFRASTRUCTURE INVESTMENTS as a good investment?

Yes No

13. What factors do you consider while selecting (Kingly rank them, 1 being the highest and 10 being the lowest )

Equities _______________________________________

Mutual Funds _______________________________________

Pension plans _______________________________________

Insurance _______________________________________

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Bonds _______________________________________

P.O. Savings _______________________________________

Fixed Deposits _______________________________________

Commercial Paper _______________________________________

Gold _______________________________________

Infrastructure _______________________________________

14. The number of investment portfolios you have?

1 2-4 4-6 7 and above

15. Do you have a Mediclaim?

Yes No

16. Do you have a Pension Plan?

Yes No

17. Have you ever had a Very Good / Bad experience while dealing with any of the intermediaries?

Yes No

18. According to you, which is the BEST investment avenue today?

________________________________________________________________________

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19. Are you familiar with terms like SIP, Unit Linked Insurance?

Yes

No

Name: _______________________________________________

Contact no _______________________________________________

Email id ______________________________________________

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