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Business Research Methodology

ProposalComparative Study of Investing Patterns of Different
Age Groups

Under the Guidance of –

Dr. VSR VIJAYAKUMAR

Submitted by-

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Group 4 Section-B
MembersDrishya Krishnan (2014090)
Garrima Parekh(2014091)
Gaurav Agarwal(2014092)
Gaurav Garewal(2014093)
Gaurav Mukim(2014094)
Gaurav Vij(2014095)

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Acknowledgement

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We take this opportunity to thank Institute of Management Technology, Nagpur for giving us
an opportunity to take this course and learn. We express our appreciation to our Professor Dr.
VSR VIJAYAKUMAR for his immense support and his invaluable guidance throughout this
Research proposal. It would not be possible for any student to accomplish this proposal without
Dr. Vijayakumar’s support. We even wish to appreciate all the effort put in by our fellow
students of Institute of Management Technology and others who helped us in filling the survey
and supporting us with the completion of the proposal.

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2 Abstract 4 Research Proposal 5 Literature Review 6 Research Objectives 8 Methodology 8 Time Scale 8 Hypothesis 9 Variables 10 Results & Findings 11 Appendix 18 Questionnaire 19 Questionnaire Mapping 20 Cross-Tabulations 21 Primary Data 24 Bibliography 26 Page 3 Acknowledgement 3 . No.Table of Content Content Pg.

4 .Abstract Page 4 This paper examines the investment decisions of different age groups investors and investment patterns with different income level. especially if they are less educated. the adverse effects of aging dominate the positive effects of experience. These results indicate that older investors' portfolio decisions reflect greater knowledge about investing. but investment skill deteriorates with age due to the adverse effects of cognitive aging. earn lower income. older investors are less effective in applying their investment knowledge and exhibit worse investment skill. The youth being more enthusiastic and have an urge to learn invest in a more systematic manner Overall. and belong to minority racial/ethnic groups. We find that older and experienced investors are more likely to follow rules of thumb that reflect greater investment knowledge while young age group tends to make risky investments However.

while high risk investments provide the potential to earn greater returns. depending on his risk profile and expectation of returns. In today’s economy of less income growth and highly increasing cost of living. one has to know how to use his/her savings to generate higher returns.) to choose from. etc. TITLE Comparative Study of Investing Patterns of Different Age Groups BACKGROUND The process of reforms as part of liberalization has resulted in greater investment in Indian market. precious metals. bonds. Organisations spend lot of money in devising investing plans for all age groups. Different investment substitutes represent a different risk-reward trade off. but lower returns. Page 5 Although we are exposed to various forms of investments. Availability of too many options and no clear idea about these choices is creating a hostile situation for the investor to choose the best among the available alternatives. There are different perceptions of the young generation and the older ones while investing so we need to undertake a comparative study between each of them. Thus. we need to understand a right mix of saving patterns. an investor can choose the most suitable investment on the basis of his/her risk tolerance. Low risk investments are those that offer assured. we are going to conduct a research on the same. Hence.Introduction We have taken up financial investing preferences among different age groups as our topic and over this research period we will try to understand how investing patterns and risk taking ability of people change among different age groups. An investor has several investment alternatives (such as stocks. 5 .

Investment Planning Managers to make their decisions as to which investment to offer to which investor. 2. Corporates issue debentures to raise money for specific purposes of projects etc. income. Corporate Debenture: When debt instruments are issued by corporates. savings etc. Bank Fixed Deposits: Bank Fixed Deposits are considered the safest mode for investment.Literature Review An investor has various investment avenues while investing his money. we study how different factors such as age. Bonds: Bonds are basically debt instruments that are issued by government sector companies to the public to raise money from them for financing purposes. INVESTMENT AVENUES 1. 3. Equity: Equity investment refers to investment in equity shares or stocks of companies. 6 5. PPF is considered as one of the safest investment. 4. This is a sector where most of the speculation takes place. his savings etc. Page 6. Life Insurance: 6 . Banks collect money from depositors in the form of Fixed Deposits and provide them with a regular return up to 9% on their investments. All these factors contribute towards selecting of an investment avenue. affect the investment decisions of people. There are various risks associated with equity investment. In our Research Project. his income. However these investment decisions are affected by a number of other factors such as his age. Investors get return on their equity investment. PPF: Public Provident Fund is a fund where investors contribute a certain amount of their income every year towards the fund and they are given returns on it. gender. Such researches are made by various agencies such as Mutual Funds. they are termed as corporate debentures.

ETF’s etc. Mutual Fund: A Mutual Fund is a financial instrument that pools money from various investors and then invests that money into various financial instruments spread across different sectors. Return Needs: More the risk a person undertakes. the higher is the return he will expect.Life Insurance is also considered as a safe mode of investment. Investment Horizon: The investment horizon refers to the time horizon for which the person keeps his money invested. he will invest in safe investments like Fixed Deposits. Page 7 5. 3. Post Office-NSC: Post Office Saving Deposits or National Savings Certificates are investment options that accept deposits in small amounts and provide returns. Each person has a different risk taking capacity and depending on that they make investments. FACTORS THAT AFFECT INVESTMENT DECISIONS: 1. hoping for the prices to appreciate continuously. People take loans to invest in houses and their prices multiply in years and then they sell it to gain money. 10. It’s an investment where people park in their money and contribute a certain premium regularly. However the returns are less but the returns are assured and there is minimal risk associated with them. If he’s tax averse. 7 . 4. Gold/Silver: Gold and Silver have been one of the most famous investment options since ages. The benefits of a Life Insurance Policy can be reaped on maturity of the policy. 8. Tax Exposure: Tax Exposure means the extent to which the investor is ready to bear the tax burden. Real Estate: Real Estate is one sector when the returns are tremendously high. Risk Tolerance: Risk refers to the deviation that a person can undertake with his returns. People having been investing money in them by buying gold and silver biscuits. 9. Investment Needs: Investment needs refer to the amount of returns that the investor is expecting on his investment. 7. Mutual Funds are managed by Fund Managers. 2. cars.

2014 . statistical tools like ANOVA and Regression Analysis through software’s like SPSS. We would be using sites like.2014 – Final writing of the report Resources 8 24*7 Internet Supply Access to EBESCO Database Page   8 .Framing of the title and objectives of the study. We would be using qualitative and quantitative research approaches. Since we limited by time and resources. Under Positivistic approach we would be doing surveys and cross sectional approaches.3. Drafting a research proposal 17.2.2014 . Two sets of questionnaire will made for different demographics. Time Scale 6. We would also refer internet and interviews for secondary data collection. The each questionnaire would be a combination of qualitative and quantitative.3.3.Research Objective   To analyze the investing patterns among different age groups To compare the investing preferences among different age groups Methodology We would be adopting the descriptive type of business research because we would be collecting the data and then summarizing it. survey monkey to make the questionnaire and send it to our focus group through mails.Survey 15.2014 .2014 .2. the survey would be cross-sectional in nature.2.Analysis of the data collected 19.Pilot testing of the survey questionnaire 3.Making of questionnaire in accordance with the objectives of the research 27. social networking sites as well as direct approach. google doc. For our field-work we would be dispensing questionnaire to the desired participants.2014 .

usually some theory has been put forward.Hypothesis Setting up and testing hypotheses is an essential part of statistical inference. for example. either because it is believed to be true or because it is to be used as a basis for argument. In order to formulate such a test. but has not been proved. the question of interest is simplified into two competing claims / hypotheses between which we have a choice. In each problem considered. denoted H1. claiming that a new drug is better than the current drug for treatment of the same symptoms. These two competing claims / hypotheses are not however treated on an equal basis: special consideration is given to the null hypothesis. denoted H0. against the alternative hypothesis. the null hypothesis. HYPOTHESIS 1 Youth does not tend to make risky investments HYPOTHESIS 2 Gold investments are not higher during festive season HYPOTHESIS 3 Mutual funds and debentures are preferred for long term investments HYPOTHESIS 4 Page 9 Investments in different sectors depends on time of the year 9 .

Variables Measurement Scale Nominal Nominal Nominal Ordinal Ordinal Ordinal Nominal Non Metric Non Metric Non Metric Non Metric Non Metric Nominal Nominal Scale Nominal Nominal 10 Metric Or Non Metric Metric Non Metric Metric Non Metric Non Metric Metric Metric Non Metric Page Variable Age Gender Investment Reason for Investment Type of Investor Frequency of Investment % of Salary Invested Preferred Investment Avenue Risk Profile Type of Industry Investment Horizon Time of the Year Reference Groups 10 .

RESULTS & Page 11 Findings 11 .

000 Above 60 .000 50-60 .000 .000 .007 Above 60 .000 50-60 .608 12 .792 17 .000 . therefore the data is normal.380 17 .622 28 .000 you prefer 30-40 .363 19 .633 19 .376 19 .236 28 .392 28 .809 28 .001 .000 yourself in terms of taking 30-40 .478 14 . using ‘Shapiro-Wilk test’ is less than .810 14 .000 20-30 .003 . Test for Normality Tests of Normality Age of the Kolmogorov-Smirnova Shapiro-Wilk respondent Statistic 20-30 .516 14 .640 12 .000 .740 19 .374 12 .632 17 .000 (Equity Shares) 40-50 . 12 .000 .000 .05.000 How would you rate Financial instruments do dimension1 dimension1 df Sig.002 risks 40-50 . Page 12 Since the value of the independent groups.Youth does not tend to make risky investments Hypothesis 1 Variables Age Investment in Equity Shares Risk Independent    Dependent    Univariate OR Multivariate It is a multivariate hypothesis and number of dependent are more than one.000 .286 14 . Statistic df Sig.285 17 .000 .417 12 .

429 Total 39.452 85 (Equity Shares) Total 22.05. the distribution is normal.111 Analysis Page 13 Since the p value is greater than .241 Financial instruments do Between Groups you prefer Within Groups 20.468 . We will use ANOVA as there are more than three independent group. 13 .789 Within Groups 36.Test to be Used Since. Test of Homogeneity of Variances Levene Statistic How would you rate yourself df1 df2 Sig.805 4 85 . therefore we will reject the hypothesis and conclude that youth tends to make risky investment.526 3. .841 . 1.944 .600 89 1.016 in terms of taking risks Financial instruments do you prefer (Equity Shares) ANOVA Sum of Squares How would you rate yourself Between Groups in terms of taking risks df Mean Square 3.129 1.444 85 .156 4 .322 89 F Sig.228 4 85 . therefore we will use parametric test.871 4 .

Financial Starting of the financial year . using ‘Shapiro-Wilk test’ is less than .000 .281 3 . therefore the data is normal.000 a.Gold investments are not higher during festive seasons Hypothesis 2 Variables Time of investments Investment in Gold Independent Dependent     Univariate or Multivariate It is a univariate hypothesis and number of dependent is one.05.05. We will use ANOVA as there are more than three independent group.640 22 . Test for Normality Tests of Normality Kolmogorov-Smirnova When do you prefer to invest Statistic df Shapiro-Wilk Sig.390 40 .000 .625 11 .000 (Gold) Others .166 Analysis Page 14 Since the p value is greater than .623 40 .427 Within Groups 21. the distribution is normal. Lilliefors Significance Correction Since the value of the independent groups. ANOVA Financial instruments do you prefer (Gold) Sum of Squares Between Groups df Mean Square 1.000 . Test to be used Since. therefore we will reject the hypothesis and conclude that Gold investments are higher during festive seasons.175 86 .440 17 .579 17 . .000 instruments do you End of the financial year .336 22 . 14 .000 prefer Festival seasons . Statistic df Sig. therefore we will use parametric test.246 Total 22.000 .456 89 F 1.734 Sig.401 11 .

000 Financial instruments do Less than a year .549 85 .5yrs .419 15 . using ‘Shapiro-Wilk test’ is less than .538 20 .05.622 23 .466 .236 20 .453 15 . ANOVA Sum of Squares Financial instruments do Between Groups you prefer (Mutual Funds) Financial instruments do Between Groups you prefer (Bonds/Debentures) df Mean Square 1.000 (Mutual Funds) dimension1 (Bonds/Debentures) dimension1 a.446 21 . Lilliefors Significance Correction Since the value of the independent groups.625 11 .900 89 F Sig.000 .Mutual funds and debentures are preferred for long term investments Hypothesis 3 Variables Time Horizon Investment in Debentures Investments in Mutual Funds Independent Dependent       UNIVARIATE OR MULTIVARIATE It is a multi-variant hypothesis as number of dependent variables are more than one.603 15 .183 Total 16.220 1.401 11 .000 .495 20 .000 .000 3yrs .392 23 .10yrs .000 you prefer 1yr .372 21 .459 23 .625 11 .000 . therefore the data is normal.000 Above 10yrs . 1.551 23 .268 Within Groups 15.762 .000 .000 Above 10yrs .05.000 3yrs .144 Hypothesis 4 Investments in different sectors depends on time of the year 15 Page Since the p value is greater than .622 89 1.000 . Financial instruments do Less than a year .000 5yrs .3yrs .000 . therefore we will reject the hypothesis and conclude that mutual funds and debentures are not preferred for long term investments 15 ANALYSIS .5yrs .401 11 .3yrs .10yrs .073 4 .000 you prefer 1yr .487 20 .561 15 .000 .000 . Normality Test Tests of Normality For how long do keep Kolmogorov-Smirnova Shapiro-Wilk your money invested / Time Horizon Statistic df Sig.600 4 .570 21 .227 Total 20.300 85 .633 21 .400 Within Groups 19. Statistic df Sig.000 5yrs .000 .

Variables Time of the Year Investments in Different Sectors Independent Dependent     Univariate OR Multivariate It is a univariate hypothesis and number of dependent is one.000 Which industry do you Starting of the financial year .000 (Agriculture) Festival seasons . Shapiro-Wilk Statistic df Sig. Services.611 17 . Normality Test Tests of Normalityb When do you prefer to Kolmogorov-Smirnova invest Statistic df Sig. 16 .000 Which industry do you Starting of the financial year . Mining)) a.000 .000 .591 40 .000 .640 22 .637 22 .634 40 .000 . Tourism. Lilliefors Significance Correction b.428 40 .292 40 .000 prefer to invest (Industry & End of the financial year .496 22 .000 .000 . Which industry do you prefer to invest Page 16 (Agriculture) is constant when When do you prefer to invest = Others.430 22 .000 .000 . Festival seasons .536 40 .000 .000 Retail.000 Power) Festival seasons .572 11 .000 prefer to invest (Banking & End of the financial year .000 .521 17 .401 11 .000 .385 17 .000 Finance) Festival seasons .453 40 .000 prefer to invest (Energy & End of the financial year .000 .000 .410 17 .000 .579 17 .000 Others .559 40 .000 Others .000 Services (Textile.572 11 .000 .440 17 .613 22 .000 Others .000 .000 Which industry do you Starting of the financial year .000 prefer to invest End of the financial year .406 22 .000 .000 (Infrastructure) Festival seasons .000 Which industry do you Starting of the financial year .380 17 .590 22 .377 40 .000 .359 22 .000 .448 11 .000 prefer to invest End of the financial year .625 11 .632 17 .629 40 .336 22 .401 11 .625 11 . Which industry do you Starting of the financial year . It has been omitted.448 11 .410 17 .000 Others .474 22 .364 40 .611 17 .

148 prefer to invest (Energy & Within Groups 21.941 86 .756 3 . Tourism.400 89 Which industry do you Between Groups . p value is greater than .059 3 .657 86 .252 Power) Total 22.312 86 .312 86 . Mining)) Page 17 As the value in agriculture is less than .096 prefer to invest (Banking & Within Groups 17.201 Finance) Total 17.363 prefer to invest Within Groups 9. Total 20.05.020 prefer to invest (Industry & Within Groups 19. 17 .023 .100 89 Which industry do you Between Groups . .252 (Infrastructure) Total 22.000 89 F Sig.456 89 Which industry do you Between Groups .699 86 .232 Services (Textile.477 .397 .968 Retail.085 .05 therefore we can say that investment in agriculture depends on the time the year while investment in other sectors doesn’t as for all of them.288 3 . Services.348 .999 .108 (Agriculture) Total 10.699 3.626 .600 89 Which industry do you Between Groups 1.586 .443 3 .088 3 .Analysis ANOVA Sum of Squares Which industry do you Between Groups prefer to invest df Mean Square .252 Within Groups 21.

Page 18 Appendix 18 .

35 35.50 Above 50 40 – 60 60 . Mining) 11) For how long do keep your money invested / Time Horizon – 1 year – 3 years 5 years – 10 years above 10 years 3 years – 5 years Page 19 Less than a Year 12) When do you prefer to invest? 19 .100 20.80 3) Gender – Male Female 4) Do you invest? Yes No 5) What percentage of salary do you invest? 0 – 20 80.40 6) Since when are you investing – 1 year – 5 years more than 7 years Less than 1 year 5 years– 7 years 7) Reason for Investment (tick at least one) – Quick Money General Savings Future provisions 8) Financial instrument do you prefer? Equity Shares Bonds/Debentures Gold Preferential Share Real estate Commodity 9) How do you rate yourself in terms of taking risk? Low Moderate High 10) Which industry do you prefer to invest? Infrastructure Energy & Power Banking & Finance Agriculture Industry & Services (Textile. Retail. Services.Questionnaire 1) Name: ______________________ 2) Age – 18-25 25. Tourism.

Objective 2 10.Starting of the financial year Ending of the financial year Festive season Others. ______________________ Questionnaire Mapping Page 20 1. Objective 3 3. Objective 1 20 . Objective 3 4. mention______________________ 13) From where do seek your investment advice – Broker Friends Financial Websites Others. Objective 2 12. Objective 1 2. Objective 1 11. Objective 1 7. Objective 3 5. Objective 2 13. Objective 3 8. Objective 3 6. Objective 3 9.

The age group of ‘20-30’ shows a higher intent on investing for quick money while as the age progresses lesser number of people tend to invest for quick money. Page 21 Here we see that there is a very high number responses between the ages ‘20-30’ who said ‘No’ to ‘investment for future provisions’.Cross-Tabulation On cross-tabulating ‘age’ against ‘Reason for investing as quick money’. we find a declining trend. There is a parity between age group of ’40-above 60’ who prefers to invest for ‘Future provisions’ 21 .

In our 1st hypothesis we proved that the youth are risk taking. There is lower but equal distribution among the respondents for equity shares. greater number of respondents opting for ‘equity shares’ are between the age group of ‘20-30’. Here we clearly see. Page 22 Investment in real estate market are usually made by the age group of ‘40-50’. This could be because the investments in this instrument in very high 22 .

e. This shows how the youth are well aware of IT technology (internet) and how it can help them in every aspects of life.Page 23 We see that all age groups take their financial advice from a broker. age group ‘20-30’ and the immediate next age group also looks for online financial advice and analysis. But it the youth i. 23 .

Page 24 Primary Data 24 .

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http://www.com/pdf/IJSSIR/2012/May/7_IJS_MAY2012.wordpress.chimc. Research article from: http://www.pdf 26 . Willaim – Business Research Methods – Thomas Southwestern Publications – 7th Edition. Zikmund G.BIBLIOGRAPHY 1. Page number: 20-40 3.com/2012/07/23/investmentscenario-in-indian-market/ 2.indianresearchjournals. http://investmentopportunitiesinindia.in/volume3No2/RESEARCH%20PAPER2.pdf Page 26 4.