This action might not be possible to undo. Are you sure you want to continue?
SUMMER TRAINING PROJECT
“Perception of people towards investment and various investment avenues”
ASHISH KUMRAWAT MBA (FT)
I, ASHISH KUMRAWAT, student of MBA (FT) from INSTITUTE OF MANAGEMENT STUDIES, D.A.VV hereby
declare that I have completed this project on " Perception
investment avenues” in the academic year 2008-09. The
information submitted is true and original to the best of knowledge.
Signature of student
The most pleasant part of any project is to express gratitude and bestow honor towards all those who directly or indirectly contributed to the smooth flow of the project work and this being the good opportunity; I don’t want to miss it. Sincere acknowledgement is due foremost to the MR. AKLANK JAIN, ASM-RELIGARE SECURITIES LTD. Who endowed me with the valuable opportunity to explore so interesting and a critical topic as is the subject of the present report. I thank my mentor Mr. O.P Gupta for his valuable inputs in the research and spending so much of valuable time and effort in helping with my topic. I also wish to express sincere gratitude to all the respondents of the project without the kind of co-operation of whom this work would not have been possible.
Ashis h Kumrawat
CONTENTS • Introduction • Investment • Investment need of an investor • Investment options in India • Research Methodology • Data Analysis and Interpretation • Suggestions and Recommendations • Conclusion • Bibliography .
current investment determines the economy’s future productive capacity and. hence. the money acts as the driver for growth of the country. Though certainly not the best or deepest of markets in the world. This too. it has reasonable options for an ordinary man to invest his savings. the level of employment. . Indian financial scene too presents a plethora of avenues to the investors. contributes to greater economic growth and prosperity. The process of investing helps to create financial markets where companies can raise capital. For the economy as a whole. In the long term. By increasing personal wealth. With the savings invested in various options available to the people. ultimately. aggregate investment sanctioned in the current period is a major factor in determining aggregate demand and. Specific types of investments provide other benefits to society as well. a growth in the standard of living.Appendix: Questionnaire INTRODUCTION Savings form an important part of the economy of any nation. investing can contribute to higher overall economic growth and prosperity. It is an outgrowth of economic development and the maturation of modern capitalism. Investment benefits both economy and the society.
So. then that investment can be termed the perfect investment. you will have Rs. is spent understanding the needs of the investor and ensuring that the most appropriate investments are selected for him. The Investment Needs of an Investor .INVESTMENTS The dictionary meaning of investment is to commit money in order to earn a financial return or to make use of the money for future benefits or advantages. For example. If all those needs are met by the investment. however. Most investors and advisors spend a great deal of time understanding the merits of the thousands of investments available in India.1100 one year from today. People commit money to investments with an expectation to increase their future wealth by investing money to spend in future years. Little time. if you invest Rs. 1000 today and earn 10 %over the next year. An investment can be described as perfect if it satisfies all the needs of all investors. the starting point in searching for the perfect investment would be to examine investor needs.
Avoiding discomfort is probably a greater need than receiving comfort. most investors have eight common needs from their investments: 1. Ease of Withdrawal. Income. 5. 7. Wealth accumulation: This is largely a factor of investment performance. Wealth accumulation is the ultimate measure of the success of an investment decision. Security of Original Capital. 4. 8. Tax Efficiency. 9. who have suffered regularly due to failures of the financial system. 3. Reputation plays an important part in delivering the comfort factor. Comfort Factor. . This is perhaps the strongest need among investors in India. Simplicity. including both short-term performance of an investment and long-term performance of a portfolio. Comfort factor: This refers to the peace of mind associated with an investment. Life Cover.By and large. 2. Security of original capital: The chance of losing some capital has been a primary need. Wealth Accumulation. Communication. 6.
Life Cover: Many investors look for investments that offer good return with adequate life cover to manage the situations in case of any eventualities. . The need to communicate increases when investments are threatened. which are usually used by the investor for meeting regular expenses. Income: This refers to money distributed at intervals by an investment. Income needs tend to be fairly constant because they are related to lifestyle and are well understood by investors. Communication: This refers to informing and educating investors about the purpose and progress of their investments. Simplicity: Investment instruments are complex. This is strongly linked to a sense of ownership. Every rupee saved in taxes goes towards wealth accumulation. change investments or cater to changes in other needs. Access to a long-term investment at short notice can only be had at a substantial cost. It is normally triggered by a need to spend capital. A planner should also deliver simplicity to investors.Tax efficiency: Legitimate reduction in the amount of tax payable is an important part of the Indian psyche. Ease of withdrawal: This refers to the ability to invest long term but withdraw funds when desired. but investors need to understand what is being done with their money.
his income. the investors would like to know how to go about the task of investment. investment analysis. how much to invest at any moment and when to buy or sell the securities. • Performance is more important when investments are performing well. his satisfaction level. As long as the investment strategy matches the needs of investor according to the priority assigned to them. Every investor tries to derive maximum economic advantage from his investment activity. The Ideal Investment strategy should be a customized one for each investor depending on his risk-return profile. tax advantage and . portfolio construction and portfolio evaluation and revision. marketability. But there is always a trade-off involved in making investments. Accurate planning gives accurate results. For evaluating an investment avenues are based upon the rate of return.• Security of original capital is more important when performance falls. risk and uncertainty. And for that there must be an efficient and trustworthy roadmap to achieve the ultimate goal of wealth maximization. Choosing the Right Investment Options After understanding the concept of investment. Perfect investment would have been achieved if all the above-mentioned needs had been met to satisfaction. capital appreciation. valuation of securities. he should be happy. This depends on investment process as investment policy. and his expectations. • Failures engender a desire for an increase in the comfort factor.
No. 1 (January .convenience of investment. For example. the right investment is a balance of three things: Liquidity. The choice of the best investment options will depend on personal circumstances as well as general market conditions. 8. Safety and Return. Source.June 2007) . The following Table should give the clear picture relating to the investors’ investment decisions in various financial market instruments.Delhi Business Review X Vol. In most cases. a good investment for a long-term retirement plan may not be a good investment for higher education expenses.
Investment Options in India Source-Delhi Business Review X Vol. 1 (January .June 2007) . No. 8.
Money-back insurance . . Even if one does not manage to save money and invest regularly in financial instruments. etc. Provident Funds. tax-savings and satisfactory returns.Insurance in India is mostly sold and bought as investment products. these investments earn a marginal rate of return of 6-8% per annum. These schemes are risk free as the government does not default in payments. Kisan Vikas Patra. By and large these FDs are the preferred choice of risk-averse Indian investors who rate safety of capital & ease of investment above all parameters. marriage.Fixed Deposits – They cover the fixed deposits of varied tenors offered by the commercial banks and other non-banking financial institutions. If he does not pay his premiums on time. They are preferred because of their add-on benefits like financial life-cover. But the interest rates offered by them are in the range of 7% 9%. Largely. with insurance. the policyholder has no choice. Money-back Insurance schemes are used as investment avenues as they offer partial cash-back at certain intervals. etc. This money can be utilized for children’s education. Government Bonds – The Central and State Governments raise money from the market through a variety of Small Saving Schemes like national saving certificates. Post Office Deposits. his insurance cover will lapse. These are generally a low risk prepositions as the commercial banks are believed to return the amount due without default.
both Gold and Silver have highly appreciated in value both in the domestic as well as the international markets. Since last 1 year. Stock Market – Indian stock markets particularly the BSE and the NSE.Endowment Insurance – These policies are term policies. Real Estate. Many types of scrip had been value creators for the investors. Although Indian Markets had been through tough times due to various scams. but history shows that they recovered very fast. had been a preferred destination not only for the Indian investors but also for the Foreign investors. but there are people who have lost everything due to incorrect timings or selection of fundamentally weak companies. In addition to its attributes as a store of value. the case for investing in gold revolves around the role it can play as a portfolio diversifier.Returns are almost guaranteed because property values are always on the rise due to a growing world population. . Residential real estate is more than just an investment. and at maturity the accrued bonus and other benefits are returned to the policyholder if he survives at maturity. There are more ways than ever before to profit from real estate investment. People have earned fortunes from the stock markets. Bullion Market – Precious metals like gold and silver had been a safe heaven for Indian investors since ages. Investors have to pay the premiums for a particular term. Besides jewellery these metals are used for investment purposes also.
which are declared in its offer document. In traditional insurance products. in ULIPs premium payments is the key component. the sum assured is the corner stone. All it deducts is a management fee and its expenses.ULIPs are remarkably alike to mutual funds in terms of their structure and functioning.There is a collection of investors in Mutual funds that have professional fund managers that invest in the stock market collectively on behalf of investors. premium payments made are converted into units and a net asset value (NAV) is declared for the same. A mutual fund acts like a professional fund manager. Unit Linked Insurance Plans .Mutual Funds . . investing the money and passing the returns to its investors. Mutual funds offer a better route to investing in equities for lay investors.
Need for the study: To study the perception of the people about investment of their savings. To understand basic requirement of the common man and their view towards investment. .
researchers.REVIEW OF LITERATURE Psychology of Investments and Investor’s Preferences Every individual investor must follow three principles of investing: using a long-term investing approach. lifestyle and investment psychology. (Mrs. financial consultants. academicians. Whether the investor's age or occupation or family income has a role of play in making choice of investment avenues? Is the investor choice affected by his overconfidence. While applying these three principles. . following the right strategy to maximize the return on investment and proper allocation of investible funds. students and the marketer of the financial Author: Dr. an individual investor has to confront his/her demographics. reference group and framing of the available alternatives? The knowledge of all these aspects is imperative for all progressive investors.) Sushant Nagpal products.
An Investors’ requirements in Indian securities market By-K. A report on financial planners in the growing economy like India By. the level of employment. For the economy as a whole. In the long term.Basics Of investment-By Dr. ultimately. PMI In this paper he discusses the basic of investment and need for investment.P.Dash. current investment determines the economy’s future productive capacity and. Investment benefits both economy and the society. Sr. investing can contribute to higher overall economic growth and prosperity.Faculty. a growth in the standard of living. It is an outgrowth of economic development and the maturation of modern capitalism. hence. aggregate investment sanctioned in the current period is a major factor in determining aggregate demand and.Balanaga Gurunathan Published in Delhi Business review. By increasing personal wealth.Indian Institute of Planning and Management-2006 .A.
To find out the preference level of investors on various Capital Market instruments. . SECONDARY OBJECTIVES To find out the general demographic factors of the investors dealing in capital market.OBJECTIVES OF THE STUDY: PRIMARY OBJECTIVE To Study the various investment avenues and the investors risk preference towards it. To find out the type of risk which are considered by the investors? To find out the ways through which the investors minimizes their risk.
Mainly designed to gather descriptive information and provides information for formulating more sophisticated studies. Researchers or field workers have the freedom to choose . Sampling Design Selection of study area: The study area is in Indore. TYPE OF RESEARCH. It is the simplest type of research and is more specific. The study design is descriptive in nature.DESCRIPTIVE RESEARCH Descriptive study is a fact-finding investigation with adequate interpretation. Selection of the sample size: 100 Sampling Methods Convenience method of sampling is used to collect the data from the respondents. The study is intended to find the investors preference towards various investment avenues.RESEARCH METHODOLOGY Research Design A Research design is purely and simply the framework of plan for a study that guides the collection and analysis of data.
Tools used for analysis Percentage analysis Chi-square test Kendall test ANOVA Correlation Analysis Multiple Response Table . thus the name “convenience”. About 100 samples were collected from Indore city and most of the respondents were customers coming in to financial hubs and commercial complexes. Formulation of the questionnaire Data collection Primary data – collected through Structured Questionnaire. Secondary data – Earlier records from journals. magazines and other sources.whomever they find.
1 % Of respondent 25 36 27 12 100 % Of respondent 50 and above 12% 41-50 27% 20-30 25% 20-30 31-40 41-50 50 and above 31-40 36% .Data Analysis and interpretatrion:Age of the respondent :Age 20-30 31-40 41-50 50 and above Total Table5.
1 32% 0.4 Fig-5.1 1-5 5-10 1-5 61% Fig-5.2: Income Group of the Respondent Income group % of Respondent Bellow 1 lac 1-5 lac 5-10 lac 10 lac and above 32 61 7 - 5-10 7% 0.3 Income Group of the Respondent Table5.Fig.5.4 .
3 Qualification Qualification High School Graduate Post Graduate Professional Others Investor (%) 3 48 14 26 9 Others 9% Professional 26% High School 3% High School Graduate Post Graduate Professional Others Graduate 48% Post Graduate 14% .According to survey most of the Respondent income group is above 1 lacks to 5 lacs. Qualification of the respondents:Table5.
5 Different Investment Avenues:Table 5.6 .Individual preference in the investment avenues Categories Highly Preferred (%) Share market Mutual fund Insurance Bank Property Total 8 17 29 28 18 100 18% 8% 17% 28% 29% Share market mutual fund Insurance bank Property Fig-5.Fig-5.4.
5: Type of investment preferred Term Investment (%) SHORT TERM LONG TERM BOTH Total 31 40 29 100 45 40 35 30 25 20 15 10 5 0 SHORT TERM 31 40 29 Series1 LONG TERM BOTH Fig. Investment Horizon Table 5.5.7 . Only 8% people have preference on other investment tool.Analysis:-The survey result shows that individual does not chose equity as highly preferred investment tool.
Analysis: The survey result shows that most of the people invest in the market for long term horizon.According to survey most of the people aware about equity market through the investor friends and relative. Respondent first source of awareness Table5. Respondent who have invested in equity market Table5.6: invested in the equity market No 81 Yes 19 Analysis:. .According to survey largely population is untouched with equity investment only 19% respondent has invested in the equity market.7: Percentage of Respondent first source of awareness Medium/ channel Investor (%) Investor friends and relative Advertisement hoardings Brokerage firm Banks and 37 26 16 21 Analysis:.
8 Percentage of income invest in equity shares Percentage of income Percentage of investor Below 5% 22 5 to 10% 44 10 to 20% 27 20 to 30% 6 Percentage of investor 50 45 40 35 30 25 20 15 10 5 0 Below 5% 5 to 10% 10 to 20% 20 to 30% 6 27 22 44 Fig-5.The survey result shows that most of the people invest in the equity market 5-10% of income. .Income invested in equity Table 5.8 Analysis :.
5. .Awareness about Religare securities Table 5.9 Analysis:According to the findings Most of the people (73%) know about the Religare securities.9 Respondent who aware about Religare Yes 73% No 27% Know about Religare 27 Yes No 73 Fig.
Preference for selecting broking firm Table5.10: investor preference while selecting broking firm Category Brokerage services Research calls Others Rank 1 42 30 16 12 Analysis : according to survey while selecting the broker firm people gives first preference to brokerage charge (42%) then other services. .
• From the Multiple Response test. • From the Multiple Response test. age group. They should be concentrated as prospective clients. consider that the affordable margin amount for investment in Derivatives is up to Rs10000/-. it is found that the investors who invest around 5-10% of their investment mostly considers the market risk(18%) as the major risk which prevails in the market. • From One Way ANOVA it is found that there is significant difference between the annual income and the income percentage towards investment.SUMMARY OF FINDINGS: • From Correlation test. it is found there exist a positive correlation between the income percentage on investment and the participation in cash market. • Most of the aggressive investors are in 21-40 yr. . it is found that the investors whose investment is around 10% of their income.
LIMITATIONS OF THE STUDY This is a two months study only. Language is one of the construe during questioner filling Portfolio requires the churning of proportion of investment in each sector as well as company from time to time to give better returns. there was lack of availability of data as most of it was confidential for the companies. . Data available was not sufficient. Sample size is two small.
People should keep their eye open and keep updating themselves about various investment avenues so that they can get safe returns. investing is very important and investing in stock markets is a major challenge ever for professionals. The young people should start investing earlier so that they can reap the benefits of investing in future. .CONCLUSION In the current scenario.
com .References: Marketing Research by G C Beri.stockedge. Investment Management. Bhalla. Tata McGrawHill Publishing Company Ltd.com www.third edition – © 2000.com www. www.religareonline.K.V.nseindia.
00. 00. Which factor do you consider most important while choosing an investment option? (a) How quickly will I be able to increase wealth? (b) The opportunity for steady growth . 00. 00.000 [ ] 5. Educational qualification (a) High School [ ] (b) Graduate [ ] (c) Post Graduate [ ] [ ] (d) Professional [ ] (e) Others 4.Questionnaire Name: 1. 00. How did you come to know about equity related investment? (a) Brokerage firms (b) investor friends & relatives (c) Advertising & hoardings (d) banks 6.000 [ ] (d) Above 10. Annual income (a) Below 1. 00. Age (a) 20-30 ] 2. Gender (a) Male [ ] (b) Female [ ] [ ] (b) 31-40 [ ] (c) 41-50 [ ] (d) 51 & above [ 3.000-5.000 [ ] (c) 5.000 [ ] (b) 1.000-10.
? (a) Yes (b) No 13. Do you want to invest in share market? (a) Yes (b) No IF YES THEN PLEASE ANSWER………………………………………………………………………. 11. Please indicate your preference on the following investment avenues Categories (a) Share Market (b)Mutual Funds (c) Insurance (d)Bank Deposits (e) Property Highly Favorable Favorable Neutral Unfavorable Highly Unfavorable 10. What is your percentage of your income do you invest in equity shares a) Below 5% b) 5 – 10 % c) 10 – 20% d) Above 20% 12.(c) The amount of monthly income the investment will generate (d) The safety of investment principal 7. What is the investment horizon you prefer? (a) Short term investment (b) Long term investment (c) Both 9.. Have you heard about Religare Securities Ltd. You are associated with which broking firm? .
. Categories (a) Brokerage (b) Services (c)Research (Calls) (d)Additional Features Rank-1 2 3 4 5 THANK YOU .………………………………………………………………………. 14. Please indicate your preference for selecting broking firm….
This action might not be possible to undo. Are you sure you want to continue?
We've moved you to where you read on your other device.
Get the full title to continue listening from where you left off, or restart the preview.