A comparative study on the investment preferences of retail investors towards risky vs. non risky investment options
Keywords:
Non risky investment options, risky investment options, Mutual Funds, investor perceptionAbstract
Increasing presence of retail investors, in the Indian financial markets, calls for extensive study on their investment habits and behavior. The current study tries to understand the impact of the demographic characteristics of the individual investor on risk appetite, investment habits and selection of mutual funds as an investment choice. The study also investigates the impact of the demographic characteristics on choice of risky investment options Vs. Non risky options and all the investment options together. Statistical tests used have been used to conclude that the demographic variables age and income have an influence on the investment choice of mutual funds. Based on the results of tests conducted on the data collected it was found that income levels of a respondent have an influence on the selection of the risky investment choices. It has been found that the previous literature has mainly focused on the relation between the demographics and selection of mutual funds alone or only single class of financial instruments. The current paper has categorized the investment into risky and non-risky, to study the association of the categories with the demographics of the sample. However the test was conducted with a sample size of 100. The sample selection method used in the study was convenience sampling. Similar studies can be conducted with a larger sample size. Stratified sample or cluster sampling method or stratified sampling method could be used to have a better representation of the population. It would be interesting to study how the data would behave on a larger scale. Further studies in the same line are very important on many fronts .Considering the importance of the retail investor in a developing economy like India; the current study would help us to understand the retail investor better. A better understanding of the behavior of the end user, will help the finance professionals to design more custom made financial products in the coming future.
Downloads
References
A., Kotishwar. (2012). Investor"s perception towards a mutual funds: A study of Twin Cities (Hyderabad and Secunderabad) in Andhra Pradesh. WIM JOURNAL OF MANAGEMENT. 3. 1-19.
Amaraveni P, Archana M(2017), A study of investor’s behavior towards various investment avenues in Warangal city, ASIA PACIFIC JOURNAL OF RESEARCH IN BUSINESS MANAGEMENT, Vol. 8, Issue 7, July 2017 , 2229-4104
Bhushan P (2014). Relationship between Financial Literacy and Investment Behavior of Salaried Individuals. JOURNAL OF BUSINESS MANAGEMENT & SOCIAL SCIENCES RESEARCH. 3. 82-87.
Gakhar,Prakash (2017). Investment Behaviour: A Study of Relationship between Investor Biases and Myers Briggs Type Indicator Personality. OPUS, 8(1), 32–60.
Geetha, S. N., & Vimala, K. (2014). Perception of Household Individual Investors towards Selected Financial Investment Avenues (With Reference to Investors in Chennai City). PROCEDIA ECONOMICS AND FINANCE, 11, 360–374.
Kannadhasan M. (2015). Retail investors’ financial risk tolerance and their risk-taking behavior: The role of demographics as differentiating and classifying factors. IIMB MANAGEMENT REVIEW, 27(3), 175–184.
Mak, M. K., & Ip, W. (2017). An exploratory study of investment behaviour of investors. International Journal of Engineering Business Management, 9, 1–12.
Mishra P& Chhatoi B P (2018), Investing in Mutual funds: Does profession matter?, IOSR JOURNAL OF BUSINESS AND MANAGEMENT, Volume 20, Issue 2. Ver. IX, PP 38-44, 23197668
Prabhat& Srivani, et.al (2016). Investors Perception Towards Different Investment Avenues. INTERNATIONAL JOURNAL OF ADVANCED RESEARCH, 4(11), 2127– 2132.
Rizvi, & Abrar. (2015). Factors Affecting an Individual Investor Behavior- An Empirical Study in Twin Cities (Rawalpindi and Islamabad) of Pakistan. Ss International Journal of Economics And Management, 5(5), 1–27.
Thulasipriya. (2015). A Study on the Investment Preference of Government Employees on Various Investment Avenues. INTERNATIONAL JOURNAL OF MANAGEMENT RESEARCH AND SOCIAL SCIENCE, 2(1), 9–16.
12)Veena, & Olekar. (2018). Impact of Demographical factors on Investment Behaviour of Working Women – A Case Study of Hyderabad Karnataka Region. INTERNATIONAL RESEARCH JOURNAL OF MANAGEMENT & TECHNOLOGY, 9(3), 217–238.
Venkataiah G C & Surya Prakasha Rao B K (2018) , Investors’ perception towards various investment avenues – a study in Vijayawada city of Andhra Pradesh
,INTERNATIONAL JOURNAL OF RESEARCH IN FINANCE AND MARKETING, IJRFM, Vol. 8 Issue 8, 22315985
W. Ul-Hameed et al. (2019), A prospective study of factors that lead to invest in mutual funds: A mediating role of investor’s perception. GROWING SCIENCE, ACCOUNTING, 69–80.
Zanvar, & Bhola. (2016). An Empirical Study on An Investment Pattern of Individual Investors in Pune City. IICMR RESEARCH JOURNAL, 10(1), 28–40.
https://www.sebi.gov.in/sebi_data/DRG_Study/elusiveretailinvestor.pdf
https://www.ibef.org/economy/domestic-investments
https://economictimes.indiatimes.com/markets/stocks/news/the-rise-of-small-town- investors-in-indian-equity-markets/articleshow/71270423.cms?from=mdr
https://www.rbi.org.in/Scripts/PublicationsView.aspx?id=18992
https://doi.org/10.1016/j.iimb.2015.06.004.
https://doi.org/10.1016/S2212-5671 (14)00204-4.
https://doi.org/10.5267/j.ac.2018.7.002
Downloads
Published
How to Cite
Issue
Section
License
You are free to:
- Share — copy and redistribute the material in any medium or format for any purpose, even commercially.
- Adapt — remix, transform, and build upon the material for any purpose, even commercially.
- The licensor cannot revoke these freedoms as long as you follow the license terms.
Under the following terms:
- Attribution — You must give appropriate credit , provide a link to the license, and indicate if changes were made . You may do so in any reasonable manner, but not in any way that suggests the licensor endorses you or your use.
- No additional restrictions — You may not apply legal terms or technological measures that legally restrict others from doing anything the license permits.
Notices:
You do not have to comply with the license for elements of the material in the public domain or where your use is permitted by an applicable exception or limitation .
No warranties are given. The license may not give you all of the permissions necessary for your intended use. For example, other rights such as publicity, privacy, or moral rights may limit how you use the material.
