A Study On Investment Decision Of People In Shares.docx

A STUDY ON INVESTMENT DECISION OF PEOPLE IN SHARES

A Project Submitted to University of Mumbai for Completion of the degree of Bachelor in Commerce (Accounting and Finance) Under the Faculty of commerce

By Kartikrao Suryarao Animi

Under the Guidance of Sujata Mam VPM’s Ramniklal Z. Shah College Mithaghar Road, Jaihind Colony, LIC Housing Colony, Mulund East, Mumbai, Maharashtra 400081

MARCH 2018 - 2019

INDEX

SRNO

PARTICULARS

1

INTRODUCTION

2

RESEARCH METHODOLOGY

3

LITERATURE REVIEW

4

DATA ANALYSIS, INTERPRETATION AND PRESENTATION

5

CONCLUSION AND SUGGESTION

6

BIBLIOGRAPHY

INTRODUCTION An investment is an asset or item acquired with the goal of generating income or appreciation. In an economic sense, an investment is the purchase of goods that are not consumed today but are used in the future to create wealth. In finance, an investment is a monetary asset purchased with the idea that the asset will provide income in the future or will later be sold at higher price for a profit. An investment refers to the commitment of funds at present, in anticipation of some positive rate of return in future. Today the spectrum of investment is indeed wide. An investment is confronted with array of investment avenues. Among all investment, investment in equity is in best high proportion. This is because the history of stock market is booming and bursts overnight millionaires, an instant pauper. Indian economy is doing indeed well in recent years. The study has been undertaken to analyze the investment pattern of investment community. The main reason behind the study are the factors like income, economy condition, and the risk covering nature of the Indian investors. The percentage of Indian investors investing in the Indian investors investing in the Indian equity market is very less as compared to foreign investors. Today, investors have various avenues of investment with different features matching their needs. But the art of investment is to see that the return is maximized with minimum risk, which is inherent in all investments. The funds allocated by the investors to various investment avenues depend on to a large extent on the investment objectives perceived by them. Investors differ in their pattern of investment, preferences, perceptions and importantly objectives of investment. The present study is entitled as “Investors” Attitude towards Stock Market . The Indian stock market is one of the oldest and largest in the world. The rapid industrialisation in the country since independence has given vitality to the stock market. Stock market helps to channelize household savings to the corporate sector which in turn facilities the development of industrial and service sectors. An equity share is a part of the ownership capital of the company eligible to share many benefits from the company. When one invests in shares, he keeps it for some time depending upon the stock price. When the rates the shares increase, he sells the securities to another party. Investment generally done by people in order to meet their future needs and also to protect them from the impact of inflation. Investment in shares will fetch better returns compared to any other form of investment. Whenever the inflation rate is high, the stock market has given higher rates of return to the investors. Share trading helps the corporate to raise additional funds for expansion by creating demand for the securities. The liquidity that an exchange provides gives the investors the ability to quick and easy selling of securities. This is an attractive feature of the stock market investment.

Investors can select the suitable avenue according to their desired level of risk, return and liquidity. Investment in securities of capital market can be made through primary or secondary market. In the primary market corporate entities offer new securities directly to the investors and mobilize the funds needed for their development. The secondary market provides continuous liquidity to the securities by trading them in the stock exchanges. The investors can buy or sell the existing securities at the prevailing market prices in the stock exchange through stockbrokers. Investment is the deployment of fund with the aim of achieving additional income or growth in capital value. Investment is an investing activity that attracts all people irrespective of their occupation, education and social status. An understating of the core concepts and a thorough analysis of the options can help investors to create a portfolio that maximize returns while minimizing risk exposure. The general concern and focus of the financial advisors and government is to see that every individual needs to invest and earn returns on their idle resources and generate a specified sum of money for a specific goal in life and make a provision for an uncertain future. The financial investment is the obligation of money that is expected to yield some gain over a period of time. If a person has more funds than his current needs he can deposit the surplus money in the bank to earn a fixed rate of interest or buy gold or purchase shares or invest in any other form of financial instruments. In other words, investment is allocating of monetary resources to assets that are expected to yield some gain or positive return over a period of time. The assets may range from safe investment to risky investment. Financial requirement of an individual finds no boundaries. Every individual aims at maximizing the flow of income from whatever source possible. The most interesting activity undertaken by an individual to fulfil this objective is to undertake investing. It is a very interesting activity which attracts people from all walks of life irrespective of their occupation, economic status, education and family background. Investment means employment of funds on assets with the aim of earning of income or capital appreciation. The two main factors that influence investment decisions are time and risk. Investment is the allocation of money to assets that are expected to yield some gain over a period of time. The main criteria for investment are the expected return, risk involved, and liquidity of investment the different activities, but the common target in these activities is to wealth. Funds to be invested come from assets already owned, borrowed money and savings. By foregoing consumption today and investing their savings, investors expect to enhance their future consumption possibilities by increasing their wealth. The nature of investment in the financial sense differs from its use in the economic sense. To the economists, investment means net addition to the economy’s capital stock which consists of goods and services that are used in the production of other goods and services.

Inventories and human capital are included in the economists’ definition of investment. Traditionally investment is distinguished from speculation in three ways. Speculation brings in its wake risk, capital gain and period of time. The word risk refers to the possibility of incurring a loss in a financial transaction. In investing in shares, if purchases of securities are preceded by proper investigation, analysis and review they will receive a stable return over a period of time. Such an act is called investment. In India, the investors have the dual advantages of free enterprises and government control. Freedom and growth are ensured from the competitive forces of private enterprise. On the other hand, being a fixed economy, government control exerts discipline and curtails some elements of freedom. A public sector left free to operate hope to achieve the benefits derived from both socialistic and capitalist forms of government. But such an independent public sector brings in disadvantages also. In India, the political climate is conducive to investment as government controls lends stability to the capital markets. The success of every investment decision has become increasingly important in recent times. Making sound investment decisions require both knowledge and skill. Skill is needed to evaluate the risk and return associated with and investment decision. Knowledge is required to analyse the complex investment alternatives available in the economic environment. The main aim of investors is to get capital appreciation and regular returns. The capital appreciation occurs when an investment is sold out at a higher price as compared to the original purchase price of an investment. The regular return from investment is derived in the form of interest or dividend. Before making an investment the investors are considering different factors such as financial, political, economical, market conditions and psychological environment. Nowaday’s investors have before them the wide range of investment opportunities such as equity shares, fixed returns securities, deposits, tax benefits saving schemes, units of mutual funds, insurance schemes, gold and real estates. Out of the various investment opportunities available, the investment on equity shares is considered to be a more rewardable and more risk prone. However many investors in India are coming forward to invest their hard earned money in equity. This study mainly focuses on the awareness of the investors’ in respect of stock market and factors to be considered before investing in the market. Besides it has also been has also analysed about the investors’ satisfaction regarding investment in stock market. Investment in securities has become an imperative choice of investors with the objective of return optimization. The uncertainty of expected return is a vital part of the investment decision in securities. The volume and composition of domestic savings in India have undergone sea change over the years. The savings rate, i.e., gross domestic savings as percentage of gross domestic product at market prices is registered as 18.6 % during 1980s and it was 23 % during 1990s. The savings rate exceeded 30 % for the first time in 2004-2005 and has remained above that level ever since8.

Again it reached a peak level in 2007-2008 at 36.8 % and registered an eight year low of 30.8 % in 2011-12 . In the total investment, the retail investors contribution is on an average accounted for three-fourth during the period 1980-81to 2011-12. Investment refers to the employment of funds to asset with the aim of achieving additional income or growth in value over a given period of time. Investment may be defined as “a commitment of funds made in the expectation of some positive rate of return”. Today, investors have various avenues of investment with different features matching their needs.

But the art of investment is to see that the return is maximized with minimum risk which is inherent in all investments. The funds allocated by the investors to various investment avenues depend to a large extent on the investment objectives perceived by them. Investors differ in their pattern of investment, preferences, perceptions and importantly objectives of investment. Basically, Securities markets provide a channel for allocation of savings by an individual or an organization to those who have a productive need for them. So, a security market can be said a location where the savers meet the real investors who need the fund. The savers and investors are constrained by the economy’s abilities to invest and save respectively which thus helps market in enhancing savings and investment in the economy. The dynamics of the economic, political, cultural and environmental activities within the country and rest of the world therefore affect Stock Market. A stock market is a public market for the trading of company stock and derivatives at an agreed price; these are securities listed on a stock exchange as well as those only traded privately. The size of the world stock market was estimated at about $36.6 trillion US at the [1] beginning of October 2008. The total world derivatives market has been estimated at about [2] [3] $791 trillion face or nominal value, 11 times the size of the entire world economy. The value of the derivatives market, because it is stated in terms of notional values, cannot be directly H.R.I.H.E, Hassan. The nature of financial market has changed drastically. Investing money has become a very complex task because of huge number of savings and investment companies and products offered by them, terms and conditions of investment and prevalent complex rules and regulations. Most of the investors, particularly rural investors are found unaware about investment avenues and rules and regulations. In spite of remarkable growth of economy and increasing income levels of people, the pace of saving mobilization is lower in India. Rural savings are not mobilized and invested properly. Investment is an economic activity which creates capital required for various sectors of economy. So every earning person should be motivated to save and invest his/her money. The study attempted to find out the awareness of rural investors about various investment avenues, their preferences and considerations for investing money. A sample of 300 respondents was selected from four villages from Sillod block of Aurangabad district, Maharashtra. The major focus of the study was on investigating whether there was difference between investment awareness level and educational qualifications of male and female rural investors. The study disclosed that there was no

significant difference in awareness level of rural male and female investors and their educational qualifications. The investment preference order of the respondents indicated towards secured investment attitude. Bank deposits, gold and jewelry, real estate were popular investment avenues for majority of the investors. Individual investments behaviour is concerned with choices about purchases of small amounts of securities for his or her own account. Investment decisions are often supported by decision tools. It is assumed that information structure and the factors in the market systematically influence individuals’ investment decisions as well as market outcomes. The objective of the study was to establish the factors influencing investment decisions at the Nairobi Stock Exchange. The study was conducted on the 42 investors out of 50 investors that constituted the sample size. To collect data the researcher used a structured questionnaire that was personally administered to the respondents. The questionnaire constituted 28 items. The respondents were the individual investors. In this study, data was analyzed using frequencies, mean scores, standard deviations, percentages, Friedman’s test and Factor analysis techniques. The researcher confirmed that there seems to be a certain degree of correlation between the factors that behavioral finance theory and previous empirical evidence identify as the for the average equity investor. The researcher found out that the most important factors that influence individual investment decisions were: reputation of the firm, firm’s status in industry, expected corporate earnings, profit and condition of statement, past performance firms stock, price per share, feeling on the economy and expected divided by investors. The findings from this research would provide an understanding of the various decisions to be made by investors based on the prevailing factors and the eventual outcomes for each decision and would identify the most influencing factors on the company’s investors’ behavior on how their future policies and strategies will be affected since investment decisions by the investors will determine the company’s strategy to be applied. Investment decisions are made by investors and investment managers. Investors commonly perform investment analysis by making use of fundamental analysis, technical analysis and judgment. Investment decisions are often supported by decision tools. It is assumed that information structure and the factors in the market systematically influence individuals’ investment decisions as well as market outcomes. Investor market behaviour derives from psychological principles of decision making to explain why people buy or sell stocks. These factors will focus upon how investors interpret and act on information to make investment decisions. Behavioural finance is defined by Shefrin, (2000) as “a rapidly growing area that deals with the influence of psychology on the behavior of financial practitioners”. Individual investments behaviour is concerned with choices about purchases of small amounts of securities for his or her own account (Nofsinger and Richard, 2002). No matter how much an investor is well informed, has done research, studied deeply about the stock before investing, he also behaves irrationally with the fear of loss in the future. This different behaviour in the individual investors is caused by various factors which compromise the investor rationality. An individual investor is one who purchases generally small amounts of securities for his or her own account. In conventional financial theory, investors are assumed to be rational wealth-maximisers, following basic financial rules and basing their investment strategies purely on the risk-return consideration. However,

in practice, the level of risk investors are willing to undertake is not the same, and depends mainly on their personal attitudes to risk. Research in behavioural finance has developed rapidly in recent years and provides evidence that investors' financial decisions are also affected by internal and external behavioural factors (Shefrin, 2000; Shleifer, 2000; Warneryd, 2001). It is generally believed that investment decisions are a function of several factors such as market characteristics and individual risk profiles, in addition to accounting information. The disposition error shows that regardless of accounting information, investors are influenced by sunk cost considerations and asymmetrical risk preferences for gain/loss situations. The research findings by Nagy and Obenberger, (1994) which examined factors influencing investor behavior, suggested that classical wealth – maximization criteria are important to investors, even though investors employ diverse criteria when choosing stocks. Contemporary concerns such as local or international operations, environmental track record and the firm’s ethical posture appear to be given only cursory consideration. The recommendations of brokerage houses, individual stock brokers, family members and co- workers go largely unheeded. Many individual investors discount the benefits of valuation models when evaluating stocks. Hussein A. H, (2007) found that expected corporate earnings, get rich quickly, stock marketability, past performance of the firm’s stock, government holdings, and the creation of the organized financial markets are the investors considerations. Dimitrios I. M, (2007) conducted a study on Investors behavior in the (ASE) and found that individual investors rely more on newspapers/media and noise in the market when making their investment decisions, while professional investors rely more on fundamental and technical analysis and less on portfolio analysis. Market participants are exposed to a constant flow of information, ranging from quantitative financial data to financial news in the media, and socially exchanged opinions and recommendations. Processing all this information is a difficult task. Variables that are loaded heavily on this factor include coverage in the financial and general press, recent stock index returns, information obtained from internet, current economic indicators and recommendations by investment advisory services (Francis and Soffer, 1997). Each of these variables represents an outside source of information that is perceived to be unbiased. Cohn et al. (1975) provided tentative evidence that risk aversion decreases as the investor’s wealth increases, while Riley and Chow showed that risk aversion decreases not only as wealth increases, but also as age, income and education increase. LeBaron, Farrelly and Gula (1992) added to the debate, by advocating that individuals’ risk aversion is largely a function of visceral rather than rational considerations. On the other hand, Baker and Haslem (1974) contended that dividends, expected returns and the firm’s financial stability are critical investment considerations for individual investors , and Baker, Haargrove and Haslem (1977) went a step further by proposing that investors behave rationally, taking into account the investment’s risk/return tradeoff. This study examined the factors that appear to exercise the greatest influence on the individual stock investor, and included not only the factors investigated by previous studies and derived from prevailing behavioral finance theories.

Stock market helps to channelize household savings (Retail) to the corporate sector which in turn utilize for the development of industrial and service sector. An equity share is a part of the ownership capital of a company and the holder of such a share is a member of the company eligible to share many benefits for the company. Share trading helps the corporate to raise additional funds for expansion by creating demand for the securities. The liquidity that an exchange provides gives the investors the ability to quick and easy selling of securities. This is an attractive feature of stock market investment. Stock trading is done only though brokers. Demographic factors influencing in small Investors’ investment in stock market are Residence, Age, Sex, Marital status, Education, Occupation, Family Size, Earning members in the Family, Family Income, Type of Investor, and Category of Investor. The objectives of the present study are to study the demographic factors of the respondents, to identify the investment pattern of small investors based on demographic factors and to make valuable suggestions to the small investors in stock market. Investment pattern of investors on different products compared to a stock or a fixed income security, which traditionally refers to an actual value. Moreover, the vast majority of derivatives 'cancel' each other out (i.e., a derivative 'bet' on an event occurring is offset by a comparable derivative 'bet' on the event not occurring.). Many such relatively illiquid securities are valued as marked to model, rather than an actual market price.

BRIEF HISTORY Indian Share Market is the oldest Asian stock market incorporated in 1875. The name of the first share trading association in India was Native Share and Stock Broker’ Association which later came to be known as Bombay Stock Exchange. This association started with 318 members. The Bombay Stock Exchange is known as the oldest exchange in Asia. It traces its history to the 1850s, when stockbrokers would gather under banyan trees in front of Mumbai's Town Hall. The location of these meetings changed many times, as the number of brokers constantly increased. The group eventually moved to Dallas Street in 1874 and in 1875 became an official organization known as 'The Native Share & Stock Brokers Association'. In 1956, the BSE became the first stock exchange to be recognized by the Indian Government under the Securities Contracts Regulation Act. The Bombay Stock Exchange developed the BSE Sensex in 1986, giving the BSE a means to measure overall performance of the exchange. In 2000 the BSE used this index to open its derivatives market, trading Sensex futures contracts. The development of Sensex options along with equity derivatives Followed in 2001 and 2002, expanding the BSE's trading platform. Today, BSE is the world's number 1 exchange in terms of the number of listed companies and the world's 5th in transaction numbers. The market capitalization as on December 31, 2007 stood at USD 1.79 trillion. An investor can choose from more than 4,700 listed companies, which for easy reference, are classified into A, B, S, T and Z groups. The BSE Index, SENSEX, is India's first stock market index that enjoys an iconic stature, and is tracked worldwide. It is an index of 30 stocks representing 12 major sectors. The SENSEX is constructed on a 'freefloat' methodology, and is sensitive to market sentiments and market realities. Apart from the SENSEX, BSE offers 21 indices, including 12 sect oral indices.

. Investment pattern of investors on different products Three segments of the NSE trading platform were established one after another. The Wholesale Debt Market (WDM) commenced operations in June 1994 and the Capital Market (CM) segment was opened at the end of 1994. Finally, the Futures and Options segment began operating in 2000. Today the NSE takes the 14th position in the top 40 futures exchanges in the world. In 1996, the National Stock Exchange of India launched S&P CNX Nifty and CNX Junior Indices that make up 100 most liquid stocks in India. CNX Nifty is a diversified index of 50 stocks from 25 different economy sectors. The Indices are owned and managed by India Index Services and Products Ltd (IISL) that has a consulting and licensing agreement with Standard & Poor's. In 1998, the National Stock Exchange of India launched its web-site and was the first exchange in India that started trading stock on the Internet in 2000. The NSE has also proved its leadership in the Indian financial market by gaining many awards such as 'Best IT Usage Award' by Computer Society in India (in 1996 and 1997) and CHIP Web Award by CHIP magazine (1999). The past decade has been quite remarkable for the Securities market in India with the boom in the economy fuelled by better banking system. It has grown exponentially and the market has also witnessed fundamental institutional changes. There have also been significant improvements in efficiency,

transparency and safety. However global economic activity decelerated towards the end of the calendar year resulting in investment concerns on account of the sub-prime crisis in the US and other developed nations. Naturally the effects of this slowdown spilled over into developing economies also and we are looking ahead with some degree of concern over the prospects in the near future. In recent days economic collapsed in variation of the foreign investors fund main effect of the Indian economy in 2008-2009 the Bombay Stock Exchange (BSE) the sensex was 13,400 in the month of 8th July 2009. In other side National Stock Exchange (NSE) 3,974 is in the same month of 2009. Since the markets has taken up word moment from 9th July 2009 from the low of 3,974 to 4,578 on 24th July 2009 due to the Sharpe recovery in global economy as well as the 1 st quarter Results of all major company which has been announced better than expectations, Hence Indian markets are one of the fastest emerging markets in world and attracted by many Foreign intuitional investors. Investment pattern of investors on different products . The Regulatory Authority: SEBI The rise in number of investors was also leading to an increase in malpractices on part of the companies, brokers, merchant bankers, investment consultants and various other agencies involved in new issues. This led to erosion of investor confidence. The Government and the stock exchanges Realizing this, Securities Exchange Board of India (SEBI) was constituted were helpless as the existing legal framework was just not enough. By the Government of India in 1992. Indian stock market history is oldest in Asia as in 1875 Bombay Stock Exchange (BSE) was established by 22 brokers. From that time onwards the Indian Stock market has grown in leaps and bounds, and has become a forceful and competent stock market in the international level. At this time, total market turnover of NSE and BSE (major stock exchanges in India) reached at Rs. 8,080,812.54 Crores during the month of October 2016, including cash and F&O segment ("Market Turnover BSE/NSE, Indian Stock Market data, Cash Market, Futures & Options by Moneycontrol.com," 2016). It turns out to be important for the investors to keep themselves up to date and financially literate about the stock market and factors affecting. This paper is an attempt to study about perception of investors about various factors affecting stock market. It also focuses on preferences of investors about various sectors and variables related to investment in stock market. For the study we have applied descriptive research design, used convenience sampling method to select respondents and collected data through structured questionnaire using personal survey method. In this research we found that factors like Price Earning (P/E) Ratio and Earnings Per Share (EPS) are given the top most importance as compared to Market share, company’s prestige and liquidity. Likewise, if industrial factors are considered, Government policies and Growth rate of industry are of much more importance. As a part of macroeconomic environment global economic condition and FII flow are crucial for investors while investing in stock market.

As Stock Exchanges and Primary Market are part of Capital market directly supports the growth of Economy. Stock exchange provides liquidity and marketability to investors to deal into share and securities once they issued in primary market. Thus it helps in providing channel between industries and investors, which is crucial for financial market of any country and hence for its economy.

Indian stock market is one of the oldest stock markets in Asia. In 1875 Bombay Stock Exchange (BSE) was established by 22 brokers. Currently most of the trading in the Indian stock market takes place on its two stock exchanges: the Bombay Stock Exchange (BSE) and the National Stock Exchange (NSE). In India out of all the listed firms on the BSE, only about 500 firms constitute more than 90% of its market capitalization; the rest of the crowd consists of highly illiquid shares. Almost all the significant firms of India are listed on both the exchanges. NSE enjoys a dominant share in spot trading, and almost a complete monopoly in derivatives trading. The presence of arbitrageurs keeps the prices on the two stock exchanges within a very tight range. Recently total market turnover of NSE and BSE (major stock exchanges in India) reached at Rs. 8,080,812.54 Crores during the month of October 2016, including cash and F&O segment("Market Turnover BSE/NSE, Indian Stock Market data, Cash Market, Futures & Options by Moneycontrol.com," 2016). There are many factors or macro and micro economic variables that affect the trading in Indian stock market and different investors take into consideration all factors based on their knowledge and perception. Capital formation process involves earning, saving and investment. During 2005-11 the percentage of total household savings in India was 33.7% of GDP (RBI, Working Group Report- Trends in Gross Domestic Savings, 2011). Bank deposits continued to account a dominant share (49.9%) followed by Life Insurance Policies (19.9%), Provident and Pension funds (10.3%) and share and debentures just 3.5%. This indicates the trend of individual savings in India. Investments generate income and assets. People invest their money in hope of getting good returns, enough liquidity and safety. Indians have habits of savings but majority of them are averse to invest their funds and hold hard cash with them. In view of some earners, holding cash is a status symbol. Consumer behavior is a dynamic process which includes acquiring products and services as per requirements with proper selection and their consumption in hope of getting maximum satisfaction and value for money. It involves decision making by a consumer or a group of consumers regarding purchasing, using and disposing off the products and spending money for getting maximum value for it. It is to be noticed that consumer’s buying behaviour is influenced by socio-economical, cultural and psychological factors. The same factors influence the behaviour of rural investors. Socio- economic status of rural investor is one of the significant factors in selecting and investing in particular financial product. Besides spread of education and increased literacy level, the speed of financial literacy is much slower in villages. Financial exclusion is widespread. However, the efforts by the government with banks and NGOs through Financial Inclusion Programme and Prime Minister’s Jan Dhan Yojana are certainly going to

enhance the financial literacy and investment awareness level of rural people. Rural economy is growing impressively and it has led to the introduction of a various investment opportunities. Besides savings in banks and post offices, investors have the choice of a variety of instruments. The rural investor needs to be acquainted with investment principles, risks involved and the instruments yielding high returns. The present research paper is an attempt to highlight on savings and investment pattern of rural investors, their perceptions regarding various investment avenues.

The Major Functions Of SEBI:  To promote fair dealings by the issuers of securities and ensure a market place where funds can be raised at relatively low costs.  To provide protection to the investors and safeguard their rights and interests such that there is steady flow of savings into the market.  Registration and regulation of stock brokers, sub-brokers, registrar to all issue, merchant bankers, underwriters, portfolio managers and such other intermediaries who are associated with securities market Prohibit insider trading in securities.  To regulate and develop a code of conduct and fair practices by the intermediaries involved in the stock market etc

 Features of an investment programme In choosing specific investments, investors will need definite ideas regarding features, which their investment avenue should possess. These features should be consistent with the investors’ general objectives and in addition, should afford them all the incidental conveniences and advantages, which are possible under the circumstances. The following are the suggested features as the ingredients from which many successful investors compound their selection policies.

Safety of principal The investor, to be certain of the safety of principal, should carefully review the economic and industry trends before choosing the types of investment. Errors are avoidable and therefore, to ensure safety of principal, the investor should consider diversification of assets. Adequate diversification involves mixing investment commitments by industry, geographically, by management, by financial type and maturities. A proper combination of these factors would reduce losses.

Liquidity Even investor requires a minimum liquidity in his investment to meet emergencies. Liquidity will be ensured if the investor buys a proportion of readily saleable securities out of his total portfolio. He may therefore, keep a small proportion of cash, fixed deposits and units which can be immediately made liquid investments like stocks and property or real estate cannot ensure immediate liquidity.

Income stability Regularity of income at a consistent rate is necessary in any investment pattern. Not only stability, it is also important to see that income is adequate after taxes. It is possible to find out some good securities, which pay particularly all their earnings in dividends.

Appreciation and purchasing power stability Investors should balance their portfolios to fight against any purchasing power stability. Investors should judge price level inflation, explore their possibility of gain and loss in the investments available to them, limitations of personal and family considerations. The investor should also try and forecast which securities will possibly appreciate. A purchase of property at the right time will lead to appreciation in time. Growth stock will also appreciate over time. These, however, should be done thoughtfully and not in a manner of speculation.

Legality and freedom from care All investments should be approved by law. Law relating to minors, estates, trusts, shares and insurance be studied will bring out many problems for the investor. One way of being free from care is to invest in securities like Unit Trust of India, Life Insurance Corporation or Saving Certificates. The management of securities is then left to the care of the Trust who diversifies the investments according to safety, stability and liquidity with the consideration of their investment policy. The identity of legal securities and investments in such securities also help the investor in avoiding many problems.

Tangibility Intangible securities have many times lost their values due to price level inflation, confiscatory laws or social collapse. Some investor prefers to keep a part of their wealth invested in tangible properties like building, machinery and land. It may, however, be considered that tangible property does not yield an income apart from direct satisfaction of possession or property.

What are the pros and cons of investing in the stock market? Historically, the stock market has delivered generous returns to investors over time, but stock markets also go down, presenting investors with the possibility for both profits and loss; for risk and return. Below, we summarize the top five benefits and disadvantages of owning stocks:

The Top 5 Benefits of Stock Investing: 1. Stock ownership takes advantage of a growing economy. As the economy grows, so do corporate earnings. That's because economic growth creates jobs, which creates income, which creates sales. The fatter the paycheck, the greater the boost to consumer demand, which drives more revenues into companies' cash registers. It helps if you understand the phases of the business cycle.

2. They are the best way to stay ahead of inflation. Historically, stocks have averaged an annualized return of 10 percent. That's better than the average annualized inflation rate of 3.2 percent. It does mean that you must have a longer time horizon. That way, you can buy and hold even if the value temporarily drops. Compare stocks, inflation . 3. Easy to buy. The stock market makes it easy to buy shares of companies. You can purchase them through a broker, a financial planner, or online. Once you've set up an account, you can buy stocks in minutes. Several online brokers such as Robinhood let you buy and sell stocks today for free.

4. You can make money in two ways. Most investors intend to buy low and then sell high. They invest in fast-growing companies that appreciate in value. That's attractive to both day traders and buy-and-hold investors. The first group hopes to take advantage of short-term trends, while the latter expect to see the company's earnings and stock price grow over time. They both believe their stock-picking skills allow them to outperform the market. Other investors prefer a regular stream of cash. They purchase stocks of companies that pay dividends. Those companies grow at a moderate rate.

5. They are easy to sell. The stock market allows you to sell your stock at any time. Economists use the term "liquid" to describe that fact that you can turn your shares into cash quickly and with low transaction costs. That's important if you suddenly need your money in a hurry. Since prices are volatile, you run the risk of being forced to take a loss.

Disadvantages: Here are five disadvantages to owning stocks. 1. You could lose your entire investment. If a company does poorly, investors will sell, sending the stock price plummeting. When you sell, you will lose your initial investment. If you can't afford to lose your initial investment, then you should buy bonds. You get an income tax break if you lose money on your stock loss. Unfortunately, you also have to pay taxes if you make money. You pay the capital gains tax. 2. Stockholders are paid last if the company goes broke. Preferred stockholders and bondholders/creditors get paid first. But don't worry, this happens only if a company goes bankrupt. A welldiversified portfolio should keep you safe if any one company goes under. 3. It requires a lot of time. You've got to research each and every company to determine how profitable you think it will be before you buy stock. You've got to learn how to read financial statements and annual reports, and follow your company's developments in the news. You also have to monitor the stock market itself, as even the best company's price will fall in a market correction, a market crash, or bear market. 4. It can be an emotional roller coaster. Stock prices rise and fall second-by-second. Individuals have the tendency to buy high, out of greed, and sell low, out of fear. The best thing to do is don't constantly look at the price fluctuations of stocks, just be sure to check in on a regular basis. 5. You compete against professionals. Institutional investors and professional traders have more time and knowledge to invest. They also have sophisticated trading tools, financial models, and computer systems at their disposal. Find out how to gain an advantage as an individual investor.

RESEARCH METHODOLOGY

STATEMENT OF THE PROBLEM: The statement of the problem under study is to analyze the investment pattern of investors and the popularity of different products/Services. This problem tries to identify the investors perception and their risk taking ability while investing in different products of market. In conventional financial theory, investors are assumed to be rational wealth-maximises, following basic financial rules and basing their investment strategies purely on the risk-return consideration as the factors expected to influence investment decisions (Baker et al, 1977). Traditional economic theory assumes that people are rational agents who make decisions objectively to take advantage of the opportunities available to them. Investors think of themselves as rational and logical. But when it comes to investing, their emotional inclinations, ingrained thought patterns and psychological biases, color how they perceive the world and how they make decisions. The controversy of this area of study was the different findings that researchers came up with. For instance, Baker and Haslem, (1973) contended that dividends, expected returns and the firm’s financial stability are critical investment considerations for individual investors. Potter, (1971) identifies six factors: dividends, rapid growth, investment for saving purposes, quick profits through trading, professional investment management and long-term growth that affect individual investors’ attitudes towards their investment decisions. Merikas et al, (2003) found that individuals base their stock purchase decisions on; fluctuation in the price index, recent price movement in a firms stock, current economic indicators. Investment decisions need to undergo a thorough analysis of the situations prevailing based on a number of factors, however regardless of the varied information available that justifies rationality and irrationality, investors are keen to avoid uncertainties associated with the ultimate decisions they engage in. It is against this background that this study sought to fill the gap by determining the factors that appear to influence the individual investment decisions, and included not only the factors investigated by previous studies and derived from prevailing behavioural finance theories, but also introduced additional factors that have been found to influence the stockholders’ investment decisions in emerging local market, NSE.

OBJECTIVE OF THE STUDY: The Present study aims at the following objectives:-

I. II.

To identify factors influencing the investors while investing in share market. To identify certain factors that motivates the investors to invest in shares.

III.

To know the investors perception towards risk–return on investment in shares.

IV.

To know the post investment satisfaction of the shareholders.

V.

To suggest measures to overcome the problems for enhancing investors trading in share market.

VI.

To suggest strategies optimize return on investment in shares.

SCOPE OF THE STUDY:The primary market starts from broad environmental factors to the industry, which influences the share price and finally analyzing the companies’ potentiality by considering possible risk associated with securities for investing public. Since share prices of the company is empirically found to depend up to 50% on the performance of the industry and the economy, studying those related field provide insights for selecting different products. It can create an opportunity for one product and may not for the other, the analyzing impact of income and risk on investment pattern of investors is important. As research reports shows that frequency of investment pattern, factors, income level play more significant role in deciding pattern of investment. So analyzing the factors that affect investment pattern of investors and other investment criteria provide the valuable insights.

Importance and Need of the Study: It is observed that investors are more devoted and fond of finicky type of investment choice and preferences. So, it is imperative to study the factors in light of socio- economic factors that force them for selecting these investment options. It plays a crucial role in determining the behaviour of investors and their disposition effect; as a result, proper use of money can be seen. This research will help not only the investors but also the different financial institutions, banks, organizations and advisors/consultants in studying and understanding the main factors that motivates/induces investors to invest in different alternatives/avenues and their decision making practice. A better consideration of behavioural procedures and results is important for financial planners because a thoughtful consideration of investor’s perception towards various investment alternatives should help financial advisors in devising suitable asset distribution strategies for their clients/investors.

Definitions of the populations: Since the study is mainly related to know the investment patterns of the investors on different products of company. Their potentiality of earning income and reducing risk of the investment community on the products, where each security in the market has to be analyzed through their earnings over the others.

Types of research: This is a descriptive research where survey method is adopted to collect primary information from the investors using different scales as required and the required secondary information for the analysis.

PRIMARY DATA: A Questionnaire schedule was prepared and the primary data was collected through survey method.

SOCONDARY DATA: Company Website Books Related information from net Customer database

SAMPLE SIZE: The population being large the survey was carried among 30 respondents, most of them are the individual Investment person. They will be considered adequate to represent the characteristics of the entire population.

SAMPLING PROCEDURE: The sampling procedure followed in this study is non-probability convenient sampling. Simple random procedures are used to select the respondent from the available database. The research work will be carried in the basis of structural questionnaire. The study is restricted to the investors of the Mulund and Thane.

TECHNIQUES FOR DATA ANALYSIS: The analysis of data collection is completed and presented systematically with the use of Microsoft Excel and MS-Word. The various tools which were used for presentation are: 

Bar graphs.



Pie charts.



Column graphs.

LIMITATIONS: The study is covers area of Mulund and Thane in only. Hence the finding may not be generalized for the any other area.  The study has been one investment avenue i.e: shares through there are many investment alternatives available to the investors.  An interpretation of this study is based on the assumption that the respondents have given correct information.  The economy and industry are so wide and comprehensive that it is difficult to encompass all the potential customers.  The sample size in the study is restricted to 52 individual person.  Besides the study has the limitation of time, place and resources.

LITERATURE REVIEW

INTRODUCTION: Review of related literature serves as the base for any researcher to understand his or her research problem clearly and to design the methodology by which the study is to be conducted. Various studies conducted earlier on the topics related to the current research problem are included in the literature. It gives an idea for the researcher to determine the research problem and to frame the objectives. It also enables the researcher for the smooth conduct of the present study. The literature includes books, journals, magazines, Ph.D. theses, reports, etc. These studies have been reviewed carefully and summarized in this chapter.

REVIEW OF RELATED LITERATURE:Kahneman and Amos Tversky (1979) originally described “Prospect Theory” and found that individuals were much more distressed by prospective losses than they were happy by equivalent gains. Some economists have concluded than investors typically consider the loss of $1 twice as painful as the pleasure received from a $ gain. Many investors do not have data analysis and interpretation skills. This is because, data from the market supports the merits of index investing, passive investors are more likely to base their investment choices on information receive from objective or scientific sources. Investor fund selection behaviour influences marketing decisions of fund management and has captured the attention on researchers. Kahneman, Daniel and Amos Tversky (1979), "Prospect Theory: An Analysis of Decision Making Under Risk,"Econometrica.

Woerheide (1982) conducted a study on “investor response to suggested criteria for mutual funds” in which he tested the effect of different factors. It was proved that factors like size of fund, effectiveness of marketing programme and past return of funds have great impact. Among these the effectiveness of marketing programme has strong impact.

De Bondt and Thaler (1985) while investigating the possible psychological basis for investor behaviour, argue that mean reversion in stock prices is an evidence of investor over reaction where investors overemphasise recent firm performance in forming future expectations.

Suguna G (1986) studied an investors attitude towards saving pattern in Mulund. There exists poor positive savings are increasing when the income increase but in the same perception. There exists high positive correlation between income and tax indicating that the tax are increasing when the income increases most of the bank executives expressed the view that due to insufficiency of income they were not able to contribute to savings scheme like public provident fund, post office time deposit. Woerheide (1982), Investor response to suggested criteria for the selection of mutual funds, Journal of Financial and Quantitative Analysis: pp. 129-137. De Bondt, W.F.M. and Thaler, R, (1985), “Does the stock market over react?” Journal of Finance, 40, 793-805. Suguna G, Courtesy from Group Project (1986), “A study on investment behaviour of the working women in Coimbatore city”. Shanmugam (1990) studied a group of 90 investors to examine the factors affecting investment decisions. The study focused its analysis on investment objectives and the extent of awareness of factors affecting investment decisions. The study concluded that the investors were high risk takers, then interested in capital gains and current dividend income. Investors possessed adequate knowledge of govt. regulations, monetary and fiscal policy.

Gupta L.C. (1991) argues that designing 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. According to Gupta, investors in India regard equity, debentures and company deposits as being in more or less the same risk category and consider including all mutual funds, including all equity funds, almost as safe as bank deposits.

Sitkin and Pablo (1992),defined risk perception as risk assessment in uncertainty and it depends on the familiarity with organizational and management system. The authors also developed a model of determinants of risk behavior and identified personal risk preferences and past experiences are the important risk factors and social influence also affects the individual‟s perception.

Shanmugam (1990), A study on investors awareness of investment, An Unpublished M.Phil dissertation submitted to PSG CAS.

Gupta L.C., (1991), Share Holders Survey: Geographic Distribution, Manas Publications, New Delhi, p. 86

Sitkin and Pablo (1992), “Reconceptualizing the Determinants of Risk Behaviour”, academy of Management Review. Vol. 17, Issue 1, pp. 9-39.

Ippolito (1992) reported that fund selection by investors is based on past performance of the funds and money flows into winning funds more rapidly than they flow out of losing funds.

Goetzman (1993) studied the ability of investors to select funds and found evidence to support selection ability among active fund investors.

Pandurangan G (1993) concluded that the investors rate this mode of investment as excellent and they want only capital appreciation and dividend and for this they are ready to take calculated risk also. This mode of investment is urban oriented till today.

Noel Capon (1994) in a study “Affluent investors and mutual fund purchases” stated that there are many evidences that supports that in spite of risk and return other factors also effect on mutual fund selection, for example a consumer survey 1990 on mutual fund it was founded that past performance and level of risk are two aggregate important factors but other factors also effect like management fee, amount of sales charges, reputation of fund family, funds already owned in family, recommendation from magazine and newsletter and clarity of accounting statements.

Ippolito, Richard. A. (1992), “Consumer Reaction to Measures of poor Quality-Evidence from Mutual Fund industry”, Journal of Law and Economics, 35, pp 45-70.

Goetzman, W.N (1993), “Cognitive Dissonance and Mutual Fund Investors”, Working Paper, Columbia Business School, 1993.

Pandurangan G (1993), “A study on investors attitude towards investment in securities”, dissertation submitted to CBM college. Capon, N., G. J. Fitzsimons, et al. (1994), Affluent investors and mutual fund purchases, International Journal of Bank Marketing, Vol. 12, Issue 3. pp 17-25. Investor showed different behavioral trait and they prefer different factors while selecting fund because of different demographic background.

Sikidar and Singh (1996) carried out a survey with an objective to understand the behavioral aspects of the investors of the North Eastern Region towards equity and MFs investment portfolio. The survey revealed that the salaried and self employed formed the major investors in MF primarily due to tax concessions.

Jambodekar (1996) conducted a study to assess the awareness of MFs among investors, to identify the information sources influencing the buying decision and the factors influencing the choice of a particular fund. The study reveals among other things that Income Schemes and Open Ended Schemes are more preferred than Growth Schemes and Close Ended Schemes during the then prevalent market conditions. Investors look for safety of Principal, Liquidity and Capital appreciation in the order of importance; Newspapers and Magazines are the first source of information through which investors get to know about MFs/Schemes and investor service is a major differentiating factor in the selection of MF Schemes.

Malhotra and Robert (1997) reported that the preoccupation of MF investors with using performance evaluation as selection criteria is misguided because Sikidar, Sujit and Singh, Amrit Pal (1996), “Financial Services: Investment in Equity and Mutual Funds – A Behavioural Study”, in Bhatia B.S., and Batra G.S.(ed.) Management of Financial Services, Deep and Deep Publications, New Delhi, 136-145.

Jambodekar, Madhusudan V. (1996), Marketing Strategies of Mutual Funds – Current Practices and Future Directions, Working Paper, UTI – IIMB Centre for Capital Markets Education and Research, Bangalore. Malhotra and Robert (1997), Rajeshwari T.R and Rama Moorthy V.E., Performance Evaluation Of selected Mutual Funds and Investor Behaviour , PhD Thesis, Sri Sathya Sai Institute of Higher Learning, Prasanthinilayam, 2002. of volatility of returns, which may be due to superior management or just good luck is difficult to determine.

Marcel Fafchamps and John Pender (1997) in their paper investigated the extent to which poor households are discouraged from making a non- divisible but profitable investment. Using data on irrigation wells in India, we estimate the parameters of a structural model of irreversible investment. Results shows that poor farmers fail to undertake a profitable investment that they could, in principle, self- finance because the non- divisibility of the investment puts it out of their reach. Irreversibility constitutes an additional disincentive to invest. Simulations show that the availability of credit can dramatically increase investment in irrigation and that interest rate subsidization has little impact.

Sivanesan S (1997) revealed that his analysis has brought out various results arising from different tools of analysis. All relevant factors have been considered to bring out the relationship awareness. The investor‟s awareness increases with the duration of investment, when investors invest for a considerable long period they tend to acquire more awareness.

Marcel Fafchamps and John Pender, (1997), Precautionary Savings Credit Constraints and Investment: Theory and Evidence from Semi-Arid India, Journal of Business & Economic Statistics, 1997, Vol. 15, Issue 2, pp-80- 94.

Sivanesan S (1997), Equity investors Awareness – A study with special reference to Udumalpet Town, Unpublished Ph.D. Thesis.

Gordon J. Alexander, Jonathan D. Jones and Peter J. Nigro (1997), analyzed the various characteristics and investment knowledge of investors and found that the investors are knowledgeable about costs, risk and returns associated with mutual funds.

Raja Rajan (1997, 1998) highlighted segmentation of investors on the basis of their characteristics, investment size, and the relationship between stage in life cycle of the investors and their investment pattern.

Syama Sunder (1998) conducted a survey to get an insight into the MF operations of private institutions with special reference to Kothari Pioneer. The survey revealed that the awareness about MF concept was poor during that time in small/cities. Agents play a vital role in spreading the MF culture; open-end schemes were much preferred then; age and income are the two important determinants in the selection of fund / scheme; brand image and return are their prime considerations.

Ang, Chen, and Lin (1998) explored equity mutual fund management reaction to poor performance using data beginning in 1994. They observed that 17 Gordon J. Alexander, Jonathan D Jones and Peter J. Nigro (1997), Mutual fund investing through employee sponsored pension plans-invest knowledge and policy implications, Managerial Finance, Vol 23, Issue 8, pp. 5-29.

Raja Rajan (1997, 1998), “Investment size based segmentation of individual investors”, Management Researcher, 1997b, 21-28; “Stages in life cycle and investment pattern”, The Indian Journal of Commerce, 51 (2 & 3), 1998, 27 – 36; “Investors demographics and risk bearing capacity”, Finance India, 17(2), June 2003, pp.565 – 576; “Chennai Investor is conservative”, Business Line, 23Feb.1997a.

Syama Sundar, P.V., (1998), “Growth Prospects of Mutual Funds and Investor perception with special reference to Kothari Pioneer Mutual Fund”, Project Report, Sri Srinivas Vidya Parishad, Andhra University, Visakhapatnam. 20 Ang, J., Chen, C. R., & Wuh Lin, J. (1998), Mutual fund managers‟ efforts and performance. Journal of Investing, 7, 68 –75. Management had good reason to be concerned about poor performance, as management compensation is based upon the amount of money under management and performance of the fund. Their analysis explores possible management reactions to poor performance.

Management could trade more often, reduce costs, take more risks, or adopt a more aggressive marketing strategy. They found that the management of lower performingfunds did more trading and had greater expense ratios than the management of funds that had good performance. We examine these issues and contribute to the understanding of mutual fund performance by studying a later time period with alarger sample and by including fixed-income a equity funds. We also contribute by considering the role of economies of scale both at the level of the individual fund and the level of the fund family.

Sirri and Tufano (1998) attributed the asymmetry between the investor reaction to past winners and losers to marketing as fund families tend to advertise top past performers. Their explanation would suggest that convexity will be more pronounced among investors that are swayed by advertising. Since being susceptible to behavioral biases and to the influence of advertising are features commonly associated with naïve investors, these arguments suggest that flow-performance convexity is inversely related to investor sophistication.

Chalapati Rao K.S., Murthy M.R. and Ranganathan K.V.K (1999) in their research article “Some aspects of the Indian Stock Market in the post liberalization period” evaluates that as a part of the process of economic.

Sirri, Erik R., and Peter Tufano, (1998), Costly search and mutual fund flows, Journal of Finance 53, 1589-1621.

Rao Chalapati K.S., M.R. Murthy and K.V.K Ranganathan, (1999), Some aspects of the Indian Stock Market in the post liberalization period‟, Journal of Indian School of Political Economy. liberalization, the stock market has been assign an important place in financing the Indian corporate sector. Besides enabling mobilizing resources for investment, directly from the investors, providing liquidity for the investors and monitoring and disciplining company management are the principal functions of the stock market. This paper examines the development in the Indian stock markets during the nineties in terms of these three roles.

Kevin James (2000) in his research article “The Price of Retail Investing in the UK” evaluates the financial wealth services provided by investment funds in UK, the study identifies that the retail investors largely delegate the management of their wealth to investment funds. These funds in turn charge retail investors for the portfolio and risk management services they provide, sparing retail investors the burdensome task of performing these various services themselves. So in order to choose a sensible fund (a fund that meets his or her requirements), a retail investor must be able to ascertain the services provided and the price charged by each of the funds he or she may consider.

Ramasamy T and Vinayakamoorthy S (2000) had concluded the study on “Investment – a development factor on savings”. The study reveals that, both savings and investment had equality. It means that an individual wants to have more investment, first he has to save that extent, savings and investment decisions are taken separated by an investor with different motives. The savings and investments are brought about by the changes in income. Whenever investment exceeds savings, the Kevin James (2000), The Price of Retail investing in the UK, [Online], Social Science Research Network, Available from http://papers.ssrn.com/sol3/papers.cfm?abstract_id=428041.

Ramasamy T and Vinayakamoorthy S (2000), “Investment – a development factor on savings”, unpublished thesis. income level raises. As a result savings has been raised by raise in the income level. It is concluded that the investment is dependent on savings.

Rajarajan V (2000) had conducted a study on the title of “Investors life styles and investment character”. The study reveals that active investors are dominated by the age group below 35 years, individuals group by above 50 years and passive investors by the age group of 35 to 50 years. Active investors group and passive investors group have short term perspective while making their investment decision. Most of the investors read two or more sources of information to make investment decisions and most of them tend to make investment decisions on their own.

Anjan Chakarabarti and Harsh Rungta (2000) stressed the importance of brand effect in determining the competitive position of the AMCs. Their study reveals that brand image factor, though cannot be easily captured by computable performance measures, influences the investor‟s perception and hence his fund/scheme selection.

Thomas A Feuerborn (2001) argued that the individual investor will continue to be misled by mutual fund companies that market new funds. There no one is taking the completely honest approach that consumers can trust.

Rajarajan V (2000), “Investors life styles and investment character”, unpublished thesis. Anjan Chakrabarti and Harsh Rungta (2000), “Mutual Funds Industry in India: An indepth look into the problems of credibility, Risk and Brand”, The ICFAIJournal of Applied Finance, Vol.6, No.2, April, 27-45. Thomas A Feuerborn (2001), Misplaced Marketing, Journal of consumer Marketing, Vol 18, Issue 1,pp. 7-9.

Droms and Walker (2001) studying 151 mutual funds over a 20-year period found no long-term persistence in returns, expenses, or turnover rates. They examine a longer time period than this study, but a smaller sample of investment companies. Theirfindingscouldsupportvariousexplanations.Changesinreturns,expenses,and turnover rate could be due to changes in fund management or management philosophy .The findings are also consistent the possibility that the quality of oversight from the independent trustees varies over time.

Rajeswari T.R and Ramamoorthy V.E (2001) have conducted a study to understand the factors influencing the fund selection behaviour of 350 MF investors in order to provide some meaningful inferences for Asset Management Companies (AMC) to innovatively design the products. The analysis was done on the basis of product qualities, fund sponsor qualities and investor services using questions framed on a five point Likert scale.

Rajeshwari T.R and Ramamoorthy V.E (2002) studied the financial behaviour and factors influencing fund/scheme selection of retail investors by conducting Factor Analysis using Principal Component Analysis, to identify the investor‟ s underlying fund / scheme selection criteria, so as to group them into specific market segment for designing of the appropriate marketing strategy.

Droms, W., & Walker, D. A. (2001), Persistence of mutual fund operating characteristics: Returns, turnover rates, and expense ratios. Applied Financial Economics, 11, 457– 466. 29Rajeswari, T.R., and Ramamoorthy V.E. (2001), “An Empirical Study on Factors Influencing the Mutual Fund/Scheme Selection by S mall Investors”. Retrieved from: http://www.utiicm .com /Cmc/PDFs/ 2001/rajeswari.pdf. (accessed on 12th May 2009).

Rajeshwari T.R and RamaMoorthy V.E (2002), Performance Evaluation Of selected Mutual Funds and Investor Behaviour, PhD Thesis, Sri Sathya Sai Institute of Higher Learning, Prasanthinilayam, 2002.

Singh and Vanita (2002) have examined the investors' preferences and perception towards MF investments by conducted a survey of 150 respondents in the city of Delhi. The findings of the study were that the investors' preferred to invest in public sector MFs with an investment objective of getting tax exemptions and stayed invested for a period of 3-5 years and the investors evaluated past performance. The study further concludes by stating that majority of the investors were dissatisfied with the performance of their MFs and belonged to the category who held growth schemes.

King (2002) has highlighted the emergence of products like exchange traded funds, hedge funds, managed accounts etc. which offer competition to MFs.

Wilcox (2002) conducted a research on investor‟s preferences for stock mutual funds in which they conducted a conjoint study on 50 investors. Analysis showed that investors weighted past performance more than fee structure. The wealthier and the knowledgeable investors are more biased towards load while selecting the mutual funds. But the authors are of the point of view that past performance is not only the guarantee of future return. There are other factors that affects on decision making, but investors make cognitive errors while selecting funds.

Singh, Y.P., and Vanita (2002), “Mutual Fund Investors' Perceptions and Preferences-A Survey”, The Indian Journal of Commerce, Vol. 55, No. 3, 8-20.

King, J.S. (2002), “Mutual Funds: Investment of Choice for Individual Investors?” Review of Business, Vol.23, No.3, 35-39.

Wilcox (2002), Bargain Hunting or Star Gazing? Investor‟s Preferences for Stock Mutual Funds, The Journal of Business, Vol. 76, Issue 4. pp.645-663.

Ranganayaki N (2003) has concluded a study on the title of “investor‟s perception towards investment with special to women investors.” A sample of 100 respondents in Sulur and adjoining areas was taken. It is concluded that recurring deposit and post office savings are most preferable investment avenues in the banking sector. It may be due to safety, liquidity and also for the benefits. Whenever, one thinks of women and investment the first thing that comes to mind is gold and Jewellery. But now-a-day‟s women are disproving the above said belief.

Ronald T. Wilcox (2003) examined how investors choose a mutual fund and found that investors pay a great attention to past performance and also indicated that the educated investors demonstrated greater knowledge of basic finance made poorer, not better, decisions than their less financially savvy.

Lenard et. al. (2003) empirically investigated investor‟s attitudes toward mutual funds. The results indicate that the decision to switch funds within a fund family is affected by investor‟s attitude towards risk, current asset allocation, investment losses, investment mix, capital base of the fund age, initial fund performance, investment mix, fund and portfolio diversification. The study reported that these factors are crucial to be considered before switching funds regardless of whether they invest in non-employer plans or in both employer and non-employer plans.

Ranganayaki N (2003), Investors perception towards investment with special reference to women investors, Unpublished thesis.

Ronald T. Wilcox (2003), Bargain Hunting or Star Gazing? Investors‟ Preferences for stock Mutual Funds, Journal of Business, Vol. 70, Issue 4, pp. 645-663.

Lenard, M. J., Akhter, S.H., and Alamc, P. (2003), “Mapping Mutual Fund Investor Characteristics And Modelling Switching Behaviour”, Financial Services Review, Vol. 12, No. 1, pp. 39-59, accessed on 10, August, 2012,

Susan Coleman (2003) examined and compared the attitude towards risk and holding of risky assets of black, white and Hispanic households using data from the 1998 survey of Consumer Finances. The result shows that Hispanic heads of household were more risk averse and they are unwilling to take any risk in exchange for investment returns. Black and white households are not more risk averse even though there is different asset mix. The study has also found that women and older heads of household express a higher degree of risk aversion and hold a lower percentage of risky assets. Similarly, it found that more highly educated individuals and wealthier heads of households express a lower degree of risk aversion and hold a higher percentage of risky assets.

Santi Swarup K (2003) in her research article “Measures for improving common investor confidence in Indian primary market a survey”, concentrates on the decisions taken by the investors while investing in primary markets, the study indicates that the sample investors give importance to their own analysis as compared to broker‟s advice. They also consider market price as a better indicator than analyst recommendations. The study also identifies factors that are affecting primary market situation in India. Issue price, information availability, market price after listing and liquidity emerge as important factors. This study suggests that investors need to be assured of some return and current level of risk associated with investment in the market is very high. They have had bad experience in terms of lower market price after listing and high issue price. Accordingly number of measures in terms of Susan Coleman (2003), “Risk Tolerance and the Investment Behavior of Black and Hispanic Heads of Household”, Association for Financial Counseling and Planning Education, p. 43-51.

Santi Swarup, K (2003), Measures For Improving Common Investor Confidence In Indian Primary Market A Survey, [Online], National Stock Exchange India Limited, Available from http://www.nseindia.com/content/research/Paper64.pdf regulatory, policy level and market oriented were suggested to improve the investor confidence in equity primary markets. However, this paper does not highlight the measures for improving investor confidence in secondary market.

Paula A. Tkac (2004)found that investors are irrational or in some other sense cannot look out for their own best interests. Mutual fund industry provides a variety of products and price structures to heterogeneous consumer preferences and budgets. Consumer who prefer more style, features or power willingly pay higher prices and the investor rely on and pay to the financial advisors or brokers for processing and formulating guidance regarding fund allocation. They are facing risk because of misconduct by advisory firms. They are not demanding any disclosures of their fund. The risks reduced to zero if investors are willing to pay with their own time and energy to monitor their fund position.

K. D. Mehru (2004) documented that the ignorance of the investors about mutual funds coupled with aggressive selling by promising higher returns of the investors have resulted in loss of investors‟ confidence due to inability to provide higher return. The agents or distributors of mutual funds are more governed by the commissions and incentives they get for selling the schemes and not by the requirements of the investors and quality of the products. They do not explain the risk factors to the investors.

Paula A Tkac (2004), Mutual Funds: Temporary Problem or Permanent Morass?, Financial Markets Conference, 2004.

Mehru K.D (2004), Problems of Mutual Funds in India, Finance India, Vol.18, Issue 1, pp. 220- 224.

Krishnamurthy Suresh, (2004) in an analysis of popular perceptions said that retail investors, swarmed back to the stock markets in the year2003-2004. The investments of households in shares and debentures rolled by 8.6% to Rs. 5,847 crore in 2003-2004. Households had deposited Rs. 1, 69,000 crore in bank deposits while investment in small savings nearly 19%. The data suggests that that in 2003-2004, the household investors had turned extremely conservative.

Sankaran (2004) proposes the future direction for investors will be to invest in pension funds, as government is envisaging a policy to cover all kinds of investors. He further opined that MF industry will continue to grow in spite of competition and will be propelled in the right direction because of the investor friendly financial markets.

Singh (2004) has established that middle class salaried investors and professionals perfected to have disclosure of net asset value on a day today basis and wanted to invest in MFs in order to get higher tax rebates. Further, it is evidenced that small investors perceived MFs to be better investment alternative and public sector investments to be less risky.

Krishnamurthy Suresh, (2004), “Household turn conservative”, Business Line, September 27, 2004, pp.3.

Sankaran, S. (2004), “Mutual Funds: can you afford to ignore them?” Portfolio organizer special issue, Vol. June, No.2, 23-37.

Singh, Chander (2004), “Performance of Mutual Funds in India: An Empirical Evidence”, The ICFAI Journal of Applied Finance, Vol. I, No.4 December, 81-98.

Kiran D. and Rao U.S. (2004) identified investor group segments using the demographic and psychographic characteristics of investors using two statistical techniques, namely – Multinomial Logistic Regression (MLR) and Factor Analysis.

Gupta and Gupta (2004) in the paper "Performance Evaluation of Select Indian Mutual Fund Schemes: An Empirical Study", have studied the performance of growth schemes using the Net Asset Values for the period April 1999 to March 2003. The paper used performance evaluation measures of Sharpe, Jensen, They are not and Fama to arrive at the finding that some funds performed better than the market because only few managers had the stock selection skills and as a result the funds were exposed to large diversifiable risk.

Manjesh (2005) in article titled "Money Market Mutual Funds (MMMFs): A Macro Perspective" has elucidated the origin, features and advantages of MMMFs as to being a very viable option for investment for the retail investor as Money Markets offer superior returns in comparison with bank deposits, are highly liquid at relatively lower risk for short term funds. The paper focuses on the advantages of MMMF investment for a retail investor and discusses the problems in penetration of MMMFs for the retail investor in India as it is obstructed by perceived conflict of interest by the regulators (RBI and SEBI) in the matter of control of MMMFs, lack of

Kiran D. and Rao U.S. (2004), “Identifying Investor Group Segments Based on Demographic and Psychographic Characteristics”, MBA Project Report, Sri Sathya Sai Institute of Higher Learning, 2004.

Gupta, P., and A. Gupta (2004), Performance Evaluation of Select Indian Mutual Fund Schemes: An Empirical Study. The ICFAI Journal of Applied Finance, December: 81-98.

Manjesh, S (2005), Money Market Mutual Funds (MMMFs): A Macro Perspective. Portfolio Organizer, August: 41-56. Mutual Funds points of contact across the country, the reliance of Mutual Fund industry on corporate investment and structural constraints.

Panda and Tripathy (2005)found the evidence of prevalence of such a psychological state among MF investors in India. For instance, UTI, which is synonymous to mutual funds in India, had a glorious past and perceived as a safe, high yield investment vehicle with the added tax benefit. Many UTI account holders have justified their beliefs by staying invested in UTI schemes even after the 1999 bail out and the July 2001 episode of repurchase freeze on US 64 for 6 months. “People are more likely to believe that something they own is better than something they do not own”. Further, they found evidence of this effect also among Indian MF investors due to the continued existence of many poor performing funds with investors staying invested with them.

Ramamurthy and Reddy S (2005) conducted a study to analyze recent trends in the MF industry and draw a conclusion that the main benefits for small investors‟ due to efficient management, diversification of investment, easy administration, nice return potential, liquidity, transparency, flexibility, affordability, wide range of choices and a proper regulation governed by SEBI.

Panda and Tripathy (2001), Customer Orientation in designing Mutual Fund products. ICFAI journal of Applied Finance, Vol 7, No. V.

Ramamurthy and Reddy S (2005) , “Recent Trends in Mutual Fund Industry”, SCMS Journal of Indian Management, Vol. 2, No. 3, 69-76.

Athanasious G. Noulas, John A. Papanastasiou and John Lazaridis (2005) evaluated the performance of 23 equity funds during the period 1997-2000 in Greece. The performance evaluation was based on measuring risk and return of the selected funds and the study proves that the investor needs to know the long term behavior of Mutual funds in order to make the right investment decision.

Balaji K (2005) conducted a study entitled „A survey on investment pattern in debt scheme of mutual fund investments‟ in Chennai with special reference to Karvy Consultants Limited. This study was undertaken to know the Investment pattern of investors in the debt scheme of mutual funds. In the survey, they studied the investment pattern, awareness about mutual fund and performance of the investor in various ways of investment avenues. In Mutual Funds, the debt scheme is the one, which provides good returns with reasonable risk. In recent days, debt schemes are gaining momentum among investors and through this project this fact has been proved. The choice of Investment Avenue of individual investors mainly depends on annual income and the percentage of income allotted for savings. The survey on investment pattern in debt scheme of mutual funds gives an idea of the investor‟s choice based on returns, rating of Mutual funds etc., particularly relating to city.

Shanmugaraj R K (2005) stated that every human saves one part of his income for some future needs. For this purpose, people are interested to save their Athanasious G. Noulas, John A. Papanastasiou, John Lazaridis (2005), Performance of Mutual Funds, Managerial Finance Vol. 31, Issue 2, pp. 100112.

Balaji K (2005), A survey on investment pattern in debt scheme of mutual fund investments in Chennai with special reference to Karvy Consultants Limited.

Shanmugaraj R K (2005), A study of investment patterns and customer perception towards mutual funds in Chennai city. income through bank saving, post office saving, chit funds, share market, mutual funds, insurance. The study has concluded that „Tax Benefits‟ are the motto of the salaried and retired people and „Higher Returns‟ are the motto of the business people. 5-10% of the income is the amount invested. Many do not perceive mutual funds as a diversification of risk or consistency of returns when mutual funds provide such benefits. This needs to be given a closer look. The feeling that mutual funds have a high degree of risk associated with it should be eradicated. The popularity of mutual funds investments would be enhanced if all these factors are taken into account.

Veena S (2005) undertook a study for Way2wealth Securities Private Limited for studying the perception of an investor, on the potential of insurance as an investment option and preference of investors investing in private Life insurance companies. It has been found that the salaried person is more interested in having insurance as an investment avenue for various reasons. LIC and money back are the well known company and scheme. The private insurance companies are accepted to certain extent only and it has to be tapped to greater extent. It has also be found that insurance advisor is the one, who are the main source of information on schemes and advantages of private insurance companies, to the investor which is an indicator of the bright future of Way2wealth Securities Pvt. Ltd.

Kanchana R (2005) revealed that each and every individual saves a part of his income to meet his future needs. The percentage of income saved mainly depends on the income level, purpose of saving and objective of investments. In the same Veena S (2005), “A study on Investment Options and Investors attitude towards Investment in private insurance companies” in Coimbatore City.

Kanchana R (2005), A survey on the preference of salaried class on various investment options available to them. way, the choice of investment he adopts also depends on the return expected, percentage of income allotted for savings and the purpose of savings. 36.1% of salaried class people save 10-20%of their income whereas only 13.6% of salaried class people save more than 40% of their income. 34.7% of salaried class people have chosen bank deposits as the most preferable investment option. This is due to the reason, that the salaried class people‟s main investment objective is safety and regular income. This is being the reason, 36.8% of salaried class people have chosen safety as their investment objective. Thus the most preferable investment option of the salaried class people at Chennai is the Bank deposit since it is the investment avenue which provides safety to their investment with a regular return.

Prakash S (2005) identified the various factors in the study to provide some valuable input regarding the investor‟s pattern, their preference and Priorities will guide the organization in designing financial products for the various segments of investors. The buying intent of mutual fund product by a small investor can be due to multiple reasons depending upon the risk return trade off. Due to the reduction in the bank interest rates and high degree of volatility in Indian Stock market, investors are looking at an alternative for their investments, which will provide them higher, returns and also safety to their investments. It was found the mutual fund enjoys a good popularity and most of them preferred equity type of the mutual fund. Most of them consider better dividends and capital appreciation as the main criteria for the investment. In general, most of them opt for moderate risk portfolio when considering the factors involved in the choice of investment. Safety and tax benefits were the main

Prakash S (2005), A study on investment pattern and preference of retail investors in Chennai city with special reference to mutual funds, KARVY Consultants Limited, Chennai. objectives. It was also found from the study that majority of them are satisfied with various services provided by agents.

Shylajan C. S. and Sushama Marathe (2006) in their research article “A study of attitudes and trading behaviour of stock market investors”, identify the major factors responsible for determining the attitudes and trading behavior of stock market investors. Based on their shared investing attitude and behaviour, the stock market investors are classified into two categories i.e. aggressive investors and non aggressive investors.

John Graham and Alok Kumar (2006) in their study “Do dividend clienteles exist? evidence on dividend preferences of retail investors” evaluates portfolio holdings of retail investors of older and low income category, this study suggests that these investors prefer dividend paying stocks, the study also highlights the trading behaviour of retail investors and indicates that the investor trades around dividend events are consistent with clientele behaviour. Further, it also points out that old and low income investor exhibits abnormal buying behaviour following dividend announcements.

Rasathi D (2006) in her study dealt with the investment pattern of women employees. This study concludes that “Future is uncertain”. So, the women employees Shylajan C. S. and Marathe Sushama (2006), A Study of Attitudes and Trading Behaviour of Stock Market Investors, The ICFAI Journal of Financial Economics, Vol. 4, Issue 3, pp. 54-68.

John Graham and Alok Kumar (2006), Do Dividend Clienteles Exist? Evidence on Dividend Preferences of Retail Investors, [Online], Social Science Research Network, Available from http://papers.ssrn.com/sol3/papers.cfm?abstract_id=482563.

Rasathi D (2006), A study on the investment pattern of salaried women employees with special reference to Namakkal, Unpublished M.Phil dissertation submitted to Kandhasamy Kandar College. should increase their savings and invest their money in a profitable way through proper planning.

Kavitha M (2006) discussed that investors in Coimbatore city are aware of the various investment opportunities. They are also aware that no investment can be made without risk. Each and every investment has its own risk, even the more Secured investment like bank deposits, land, gold, and silver etc. Investments made in land and buildings, gold etc, has comparative value in long run. The private sector investments consists of equity shares and preference shares , debentures and public deposits with companies, the predominance of Govt. sector serves the purpose of bringing about confidence to the individual investors.

Jayanthi B (2006) conducted a study entitled “A study on customer perception towards UTI mutual fund” Coonoor with special reference to Karvy Stock Broking Limited, Coonoor. The study was undertaken to know the perception of the customers towards UTI mutual fund and thereby improve the efficiency of UTI. The study revealed that the investors have greatest preference for capital appreciation. The level of awareness about UTI mutual fund schemes can be enhanced through the efforts of the company. Since many investors are not sure of investing again in UTI mutual fund, the company should take efforts to make them invest again. The statistical analysis of data has given insight into investor demographics and their investment preference.UTI mutual fund has its own brand name and thereby it must improve its operations through its performance and service.

Kavitha M ( 2006), A study on investment opportunities and investors preference in Coimbatore city, Unpublished M.Phil dissertation submitted to Salem Sowdeshwari College, Salem.

Jayanthi B (2006), A Study on Customer Perception towards UTI Mutual fund for Karvy Stock Broking Limited, Coonoor, Master of Business Administration.

Geethanjali (2006) conducted a study entitled “Investors awareness towards commodity market” in Erode with special reference to Karvy Stock Broking Limited. The study is made to find out the investors knowledge towards commodity market. The expectations of the investors are quite high. Many expect high rate of return for further investment through commodity market. The study also examines the phenomenal growth in commodity market which is ten times greater than the share market. The study reveals that commodity market is in a nascent stage in Erode. The investment avenues of individual investors depend mainly on annual income and risk taking capacity .The investors in Erode are not much aware of commodity market so proper awareness program should be conducted to improve the awareness level of investors.

Babitha B (2006) conducted a study entitled “A Study on Investment Patterns of investors in ING Vysya mutual funds at Coimbatore city” for ING Vysya Mutual funds, Coimbatore. The study showed that most of the investors are investing nearly 20% of their income in ING Vysya mutual funds. The equity scheme of ING Vysya mutual funds was preferred by majority of the investors and people invest in nmutual funds mainly in order to cater to their future needs. The satisfaction level regarding the performance of ING Vysya mutual funds was moderate amongst the investors. People are interested to save their income through fixed deposits, post office schemes, bonds /debentures, share market, mutual funds, insurance etc. The study has concluded that ING Vysya mutual funds have to concentrate more on its performance and services so as to survive in the competitive mutual fund industry.

Geethanjali (2006), “Investors awareness towards commodity market” in Erode with special reference to Karvy Stock Broking Limited.

Babitha B (2006), A Study on Investment Patterns of investors in ING Vysya mutual funds at Coimbatore city.

Deepak B (2006) aimed to find out the investors preference towards various investment avenues like fixed deposits, post-office schemes, bonds / debentures, share market, mutual funds and insurance. The study revealed that mutual fund ranks as the most popular avenue for investment followed by life insurance and fixed deposits with regard to the risk appetite of the investors; it is found that the investors perceive that investments in mutual funds carry moderate risk. The study also reveals that better and steady returns are the main reason for investment in mutual fund. The study in dictated that the majorities of the investors are satisfied with their investments in mutual fund. Investments in insurance and housing are found to be the popular navenues for saving tax in addition to mutual funds

suggestions have been made to improve investments in mutual funds particular low risk schemes such as debt funds & get funds and also by highlighting the tax advantages in investors in mutual funds.

Devasena S (2006) made an attempt to find out “Risk perception and portfolio management of equity investors”. The study reveals that the investors in Tirupur Karvy are not aware of portfolio which would minimize risk and maximize the return. And also it is clear that the investors in Tirupur Karvy have low level of understanding about risk and the importance of portfolio management as they are not aware of the portfolio management proper steps to be taken in order to improve the awareness level in the minds of the investors.

Deepak B (2006), An analysis of various investment avenues with special reference to Erode.

Devasena S (2006), Risk Perception and Portfolio Management of Equity Investors in KARVY Stock Broking Limited, Tirupur

Desigan et al. (2006) conducted a study on women investor‟s perception towards investment and found that women investor‟s basically are indecisive in investing in MFs due to various reasons like lack of knowledge about the investment protection and their various investment procedures, market fluctuations, various risks associated with investment, assessment of investment and redressal of grievances regarding their various investment related problems.

James and Karceski (2006) observed that investors in institutional funds are less reactive to raw performance but more reactive to risk-adjusted performance than are investors in retail funds.

Donnor and Oxenstierna (2007) in their thesis conducted on “the factor that investor value while choose mutual fund” on Swedish market. It is founded that company related factors i.e. reputation and availability is more valued by inexperienced investors because they lack necessary knowledge about complex financial products. But experienced investors value fund specific attributes and demands good presence of company in market in order to recognize it.

Bollen (2007) studied the dynamics of investor fund flows in a sample of socially screened equity mutual funds and compared the relation between annual fund

Desigan et al. (2006), “Women Investor‟s Perception towards Investment: An empirical Study”, Indian Journal of Marketing. Retrieved from: http://www. google.com. (accessed on 22nd May 2010). 65 James and Karceski (2006), Investor monitoring and difference in mutual fund performance, Journal of Banking and Finance 30, 2787-2808.

Donnor and Oxenstierna (2007), The Factors that Investors Value when Choosing Mutual Funds:Implications from a Market Dominated by Four Banks.

Bollen N.P.B (2007), “Mutual Fund Attributes and Investor Behaviour”, forthcoming, Journal of Financial and Quantitative Analysis, pp 1-40, accessed as on July 12, 2012, flows & lagged performance in SR funds to the same relation in a matched sample of conventional funds. The result revealed that the extra-financial SR attribute serves to dampen the rate at which SR investors trade mutual funds. The study noted that the differences between SR funds and their conventional counterparts are robust over time and persist as funds age. The study found that the preferences of SR investors may be represented by conditional multi-attribute utility function (especially when SR funds deliver positive returns). The study remarked that mutual fund companies can expect SR investors to be more loyal than investors in ordinary funds.

Viviane Y. Naimy (2008)compared the return of eight different US equity funds with the NYSE composite Index for the period of 2000-2007 and found that both the returns are relatively moving together. The article also criticized that investors need to be aware of problems and issues of mutual funds and have to reconsider other investment alternatives for better returns.

Onur Arugaslam, Ed Edwards and Ajay Samant (2008) noted that better investment strategy enables investors to earn superior return for an average level of risk. An investor, who is comfortable with high level risk, could have attained higher returns. http://www2.owen.vanderbilt.edu/nick.bollen/research/sri.pdf. Business Management Dynamics Vol.2, No.2, Aug 2012, pp.01-09.

Viviane Y. Naimy (2008), Equity Mutual Funds versus Market Performance: Illusion or Reality? The Business Review, Vol 11, Issue 1, pp. 71-75.

Onur Arugaslan, Ed Edwards, Ajay Samant (2008), Risk-adjusted performance of international mutual funds, Managerial Finance, Vol. 34, Issue1, pp. 5-22.

Ravi Kiran (2009)highlighted that volatility influencing stock market movements. The article revealed that mutual funds are most preferred financial avenue but needs some innovation and added quality dimensions in existing services.

Parihar B.B.S., Rajeev Sharma and Deepika Singh Parihar (2009) revealed that majority of investors have still not formed any attitude towards mutual fund investments.

Ayyappan S (2009) made an attempt to analyze investor‟s satisfaction and their awareness. On the basis of the results of the study, the he has made some definite suggestions like taking good decision while investment, carefully selecting proper avenues, to compare the performance of return and investors could easily receive updated information for the further development of investment. It hopes that, the awareness of investors will be raised to a considerable extent if all the suggestions are implemented.

Walia and Kiran (2009) conducted a research on investors‟ risk perception towards the mutual fund services. In this study they identified investor‟s expectations and parameters that caused dissatisfaction. In this study innovation of mutual funds portfolio are also highlighted that these innovations should be according to investors

Ravi Kiran (2009), An analysis of investor‟s risk Perception towards Mutual Funds Services, International Journal of business and Management, Vol. 4, Issue 5, pp. 106-120.

Parihar B.B.S., Rajeev Sharma, Deepika Singh Parihar (2009), Analyzing Investors‟ Attitude towards Mutual Funds as an Investment Option, The IUP journal of Management Research, Vol. 8, Issue 7, pp. 56-64.

Ayyappan S (2009), Mutual fund investor‟s awareness –A study with special reference to Coimbatore Dist. Unpublished Ph.D. Thesis.

Walia,N and Kiran R (2009), “An analysis of investor‟s risk perception towards Mutual Funds services”. International Journal of Business and Management", Vol. 4, Issue 5, pp. 106. expectations. Major finding of this study is that investors wants innovative products and wants to add quality in existing services.

Sanjay Das (2010) MFs have emerged as an important segment of financial markets and so far have delivered value to the investors. The study reveals that the investors‟ perception is dependent on the demographic profile and assesses that the investor‟s age, marital status and occupation has direct impact on the investors‟ choice of investment. The study further reveals that female segment is not fully tapped and even there is low target on higher income group people. Hence, fund managers should take steps to tap the female segment and higher income group segment to enhance more investment in MF Investment Avenue which would really help the industry to flourish. Further, the findings of the research were on the factors influencing investor‟s perception on public private MF‟s. It reveals that liquidity, flexibility, tax savings, service quality and transparency etc. are the factors which have a higher impact on perception of investors. These factors give them the required boosting in the investment process. Therefore, it becomes imperative on part of the fund managers to enhance these features for attracting more investors and also to retain the trust, the investors have in them.

Kaboor A (2010) examined the individual investor‟s Financial Literacy of the investment options. The results of the study have brought out the investors attributes that determine investor financial literacy. The expanding and examining investor financial literacy would enable a researcher to understand the spread of Sanjay Das (2010), Small investor‟s perceptions on mutual funds in Assam: An Empirical Analysis, Abhinav Journal of Research in Commerce & Management, Vol. 1, Issue 8, pp.11-27. Kaboor A (2010), Determinants of investor‟s Financial Literacy, Unpublished Ph. D. Thesis. financial literacy among investors of different cities. Inter regional disparities in financial literacy could be discerned and methods could be suggested to attain equal distribution of financial literacy among investors. Further grievance redressal mechanism operating at different levels may be studied for it efficiency.

Ranjani Komal Srinivasan, Anjali Vivek Chopra (2011) concluded that the respondents showed significant awareness in matters concerning investment and personal financial planning. Contrary to popular perception, the sample population showed awareness about financial planning and willingness to take investment decisions relating to personal finance. However, in the area of retirement planning, majority of the respondents felt that they had not adequately planned for their retirement.

Lakshmana Rao (2011) stated in his study on „Analysis of investors‟ perceptions towards mutual fund schemes (with reference to awareness and adoption of personal and family considerations)‟ that Investors between 31 to 40 years of age have highest awareness and adoption of different mutual fund schemes. It is also concluded that there is an association between respondents‟ residential status and awareness of balanced fund and debt fund schemes.

Ranjani Komal Srinivasan, Anjali Vivek Chopra (2011), An Empirical study on Financial Awareness of Working women in India, Research Journal of Social Science & Management, Vol. 1, Issue 6, pp.268-280.

Lakshmana Rao (2011), Analysis of investors‟ perceptions towards mutual fund schemes (with reference to awareness and adoption of personal and family considerations), International Journal of Multidisciplinary Research, Vol.1, Issue 8, pp.175-192.

Rao (2011)conducted study on “Analysis of individual investor behaviour towards Mutual Fund Scheme”. In this study author presents mutual fund investor awareness and adoption of different schemes with educational level. The research findings showed that with increased level of education is linked with greater risk tolerance. This tends to support the hypothesis developed in previous researches i.e. positive relationship exists between educational attainment and financial risk tolerance.

Hossein Panahian et al (2011) showed that investors' attitude towards transparency and disclosure of financial information, Board structure and performance, corporate issues and surveillance measures in stock market and, finally, the ownership structure had the greatest influence in explaining investors' behavior in Tehran Stock Exchange. Consequently, paying attention to different aspects of such cases as providing information on time, accessibility and reliability of information provided for investors

considering the preference of content over form as well as providing appropriate information about Board structure and performance, corporate issues and ownership structure can be a good strategy to attract investors and encourage them to attend more actively in stock market.

Rao (2011), Analysis of Individual Investors‟ Behaviour Towards Mutual Fund Schemes (A Study on Awareness And Adoption of Educational Levels - Journal Of Banking Financial Services & Insurance Research, Vol. 1, Issue 7.

Hossein Panahian, Mojgan, Safa, Mohammd Reza Panahian (2011), Study of the Investors Attitude towards Financial Information Transparency on Explaining the Investment behavior in Tehran Stock Exchange, American Journal of Scientific Research, Issue 8.pp.87-99.

Saini et., al. (2011) analyzed investor‟s behavior, investors‟ opinion and perception relating to various issues like type of mutual fund scheme, its objective, role of financial advisors / brokers, sources of information, deficiencies in the provision of services, investors‟ opinion relating to factors that attract them to invest in mutual and challenges before the Indian mutual fund industry etc. The study found that investors seek for liquidity, simplicity in offer documents, online trading, regular updates through SMS and stringent follow up of provisions laid by AMFI.

Kousalya P R and Gurusamy P (2012) observed in their study on „Women Investors‟ Perception towards Investments‟ that there is no significant relationship between age of the women investors and level of awareness on investment. They have also concluded that the educational level of women investors does not influence the level of awareness.

Binod Kumar Singh (2012) in his study observed that most of respondents are still confused about the mutual funds and have not formed any attitude towards the mutual fund for investment purpose. It has been observed that most of the respondents having lack of awareness about the various function of mutual funds. Moreover, as far as the demographic factors are concerned, gender, income and level of education have significantly influence the investors‟ attitude towards mutual funds.

Saini S, Anjum B, and Saini R (2011), “Investors‟ Awareness And Perception About Mutual Funds”, International Journal Of Multidisciplinary Research, Vol. 1 No. 1, pp. 14-29, accessed on 30, June 2012.

Kousalya P R and Gurusamy P (2012), Women Investors‟ Perception towards Investments, International Journal of Scientific Research, Vol. 1, Issue 6, pp. 80-81.

Binod Kumar Singh (2012), A study on investors‟ attitude towards mutual funds as an investment option, International Journal of Research in Management, Vol. 2, Issue2, pp. 61-70. the other two demographic factors like age and occupation have not been found influencing the attitude of investors‟ towards mutual funds.

Meenakshi Chaturvedi, Shruti Khare (2012) proclaimed that the age of investor cannot be taken to influence their level of awareness and it is very clear from the results that the gender of the investor has no effect or influence on his or level of awareness about any investment channel.

Singh (2012) conducted an empirical study of Indian investors and observed that most of the respondents do not have much awareness about the various function of mutual funds and they are bit confused regarding investment in mutual funds. The study found that some demographic factors like gender, income and level of education have their significant impact over the attitude towards mutual funds. On the contrary age and occupation have not been found influencing the investor‟s attitude. The study noticed that return potential and liquidity have been perceived to be most lucrative benefits of investment in mutual funds and the same are followed by flexibility, transparency and affordability.

Jothi Baskara Mohan, Ramji P.R. (2013)conducted a study on „Women Investors Recital at Rajapalayam City - A Study‟. The results of the study shows that Meenakshi Chaturvedi, Shruti Khare (2012), Study of saving pattern and investment preferences of individual household in India, International Journal of Research in Commerce & Management, Vol. 3, Issue 5, pp. 115-120.

Singh B.K (2012), “A study on investors‟ attitude towards mutual funds as an investment option”, International Journal of Research in Management, Vol. 2, No. 2, pp. 61-70, accessed as on 12 August 12, 2012, http://rspublication.com/ijrm/march%2012/6.pdf.

Jothi Baskara Mohan, Ramji P.R. (2013), Women Investors Recital at Rajapalayam City – A Study, IOSR Journal of Business and Management, Vol. 8, Issue 3, pp 14-18. 92 per cent of respondents are aware of Investment and remaining 8 per cent unaware of Investment avenues.

SUCCESS IN INVESTMENT:Success in most things is relative, and not less so in the field of investment. Success in investment means earning the highest possible return with the constraints imposed by the investor’s personal circumstances-age, family needs, liquidity requirements, tax position and acceptability of risk. If possible, performance should be measured against alternative investment, or combination of investment, available to the investor within those constraints. Genuine success also means winning the battle against inflation, against the fall in the real value of savings and capital. To be successful investor, one should strive to achieve no less than the rate of return consistent with the risk assumed. But is this success? If markets are efficient, abnormal returns ere not likely to be achieved, and so the best one can hope for return consistent with the level of risk assumed. The trick is to assess the level of risk we wish to assume and make certain that the collection of assets we buy fulfills our risk expectations. As a reward for assuming this level of risk, we will receive the returns that are consistent with it. If however, we believe that we do better than the level of return warranted by the level of risk assumed, then success must be measured in these terms. But care must be exercised here. Merely realizing higher returns. Investment pattern of investors on different products not indicate success in this sense. We are really talking about outperforming the average of the participant in the market for assets. And if we realize higher return we must be certain that we are not assuming higher risks consistent with those returns in order to measure our success. Thus we are left with two definitions of success. (i)

Success is achieving the rate of return warranted by the level of risk assumed. Investors expect returns proportional to the risk assumed.

(ii)

Success is achieving a rate of return in excess or warranted by the level of risk assumed. Investors expect abnormal returns for the risk assumed.

To be successful under the first definition, an investor must have a rational approach to portfolio construction and management. Reasonably efficient diversification is the key. To be successful under the second definition, an investor must have at least one of the following: Superior Analytical Skill, Superior Forecasting Ability, Inside Information, Dumb Luck Whether and to what extent anyone is likely to possess these characteristics and consistently be able to outperform the market by the level of risk assumed is critical issue. The investor should be aware of, but not denoted by, the fact that professional investors in particular, largely dominate investment markets, the stock market. As a consequence, grossly under-valued investments are rarely easy to come by. Moreover, he should beware of books subtitled. How I made a Million in the Stock Market, Get Rich Quick and statements such as ‘You can have a high return with no risk’. In reasonably efficient markets risk and return go together like bread and butter; in the words of Milton Friedman, there is no such thing as a free lunch. Success involves planning—clearly establishing one’s objectives and constraints. Investments should

be looked at in terms of what they contribute to the overall portfolio, rather than their merits in isolation. Institutional investment will probably play some part, and performance tables are available to give some guidance. But personal direct investment should not be overlooked, particularly in the obvious area of Turk ownership, and one’s own knowledge, skills, hobbies and acquaintances can also be put to advantage. Remember Francis Bacon’s words: If a man look sharply and attentively, he shall see fortune; for though she be blamed, yet she is not so invisible. More money has been lost in the stock market, then one can imagine simply because of the failure of investors to clearly define their objectives and assess their financial temperaments. In analyzing the portfolios of individual investors, the most common errors observed are: Firstly, portfolio is over diversified, containing so many issues that the investors cannot follow closely the development in those companies. Secondly, many portfolios suffer from overconcentration in one or two issues. Thirdly, all too often, the quality of these securities is not consistent with the stated investment goal and usually a portfolio contains too many speculative securities. Fourthly, many individual investors are afraid to take losses; they want to wait for their stock to come back to the price they paid. Fifthly, most investors, without realizing it, do not have a plan. They are buying and selling and believe is going where the action is instead of sticking to an investment goal. Finally, most serious of all some investors consider only profit potential never the risk factor. They try to wait for the bottoms to buy and tops to sell, they don’t learn from their mistakes and sight of their financial goals for the timeframe of the investment objectives under pressure of hope, fear, or greed.

Should investors play a winner’s game or a loser’s game while buying securities? To answer this question, probably the best way to explain it is to use a sport as an illustration. Let us take tennis. To professionals like Williams sisters, tennis is a winner game. To win, they must deliver the ball to a place where the opponent will find it difficult to return or play at a speed that the opponent cannot keep up with. They win the game by delivering winning shots. According to sports writers, on the one hand, tennis to amateurs is actually a loser’s game. They do not have the strikes that in any way resemble those of Williams sisters and other professionals. The best strategy to win a game, they, is to keep the ball in play and let the opponent defeat himself by hitting the ball into the net or outside the court. They win game by loosing less than their opponent. The above analogy clears the distinction between winner and loser’s game. Probably now the investors can guess whether buying securities is a winner’s game or a loser’s game. Recently, buying securities has become a loser’s game even for professionals engaged in institutional investing. For those who determine to win the loser’s game, it is required:

1) Play your own game. Know your policies very well and play according to them all the time. 2) Do the things do best? Make ‘fewer’ but ‘better’ investment decisions. 3) Concentrate on your defences. Most investors spend too little time on sell-decisions. Sell decisions are as important as buy-decisions. Investors should spend at least equal time in making sell-decision.

The crucial point of loser’s game is to put the balance sheet and the income statement through a fine screen. This is the first step in making sure to avoid a mistake and will help the investor to keep away from letting the excitement make him move too quickly. Remember the old saying. A fool and his money are quickly parted. THREE APPROACHES TO SUCCEED AS AN INVESTOR As Charles Ellis argued, it appears that there are three different ways of earning superior risk- adjusted returns on stock market. The first one is physically difficult, the second one is intellectually difficult, and the third one is psychologically difficult. Physically Difficult Approach Many investors seem to follow this approach, wittingly or unwittingly. They look at the newspapers and financial periodicals to learn about new issues, they visit the offices of brokers to get advice and application forms, and they apply regularly in the primary market. They follow the budget announcements intently, they read CMIE reports to learn about the developments in economy and various industrial sectors, they read investment columns written by the so called ‘experts’, they follow developments in the companies, they solicit information from company executives, they read the columns in technical analysis, and they attend seminars and conferences. In a nutshell, they apply themselves assiduously, diligently, and even doggedly. They operate on the premise that if they can be a step ahead of others, they will outperform the market. The physically difficult approach seems to have worked reasonably well for most of the investors in India since the late 1970s to the early 1990s, for three principal reasons: 1. Typically, issues in the primary market have been priced very attractively. 2. The secondary market, thanks to limited competition till almost 1991, was characterized by numerous inefficiencies that provided rewarding opportunities to the diligent investor. 3. An advancing price- earnings multiple, in general, bailed out even inept investors. Things, however, have changed from mid- 1995. The opportunities for subscribing issues in the primary market have substantially dried up as companies, quite understandably, are placing securities with institutional investors at prices that are fairly close to the prevailing market prices. Likewise, the scope for earning superior returns in the secondary market has diminished as the degree of competition and efficiency is increasing, thanks to the emergence of hundreds of new. Institutional players (mutual funds, foreign institutional investors, merchant banking organisations, corporate bodies) and millions of new individual investors. Finally, the prospects of a fluctuating price-earnings multiple seem to be a greater than the prospects of a rise in the priceearnings multiple. Intellectually Difficult Approach The Intellectually Difficult Approach to successful investing calls for developing profound understandings of the nature of investments and hammering out a strategy based on superior insights. This approach has been followed mainly by the highly

talented investors who have an exceptional ability, a rare perceptiveness, an unusual skill, or a touch of clairvoyance. Such a gift has been displayed by investors like Benjamin Graham, John Maynard Keynes, John Templeton, George Soros, Warren Buffet, Phil Fisher, Peter Lynch, and others. Benjamin Graham, widely acclaimed as the father of modern security analysis, was an exceptionally gifted quantitative navigator who relied on hard financial facts and religiously applied the ‘margin of safety’ principle. John Maynard Keynes, arguably the most influential economist of the 20th Century, achieved considerable investment success on the basis of his sharp insights into market psychology. John Templeton had an unusual feel for bargain stocks and achieved remarkable success with the help of bargain stock investing. Warren Buffett, the most successful stock market investor of our times, is the quintessential long-term value investor. George Soros, a phenomenally successful speculator, developed and applied a special insight which he labels as the ‘reflexivity’ principle. Growth Phil Fisher, a prominent growth stock advocate, displayed a rare ability with regard to invest in growth stocks. Peter Lynch, perhaps the most widely read investment guru in recent years, has performed exceptionally well, thanks to a rare degree of openness and flexibility in his approach. The intellectually difficult approach calls for a special talent that is diligently honed and nurtured over time. Obviously, it can be practiced only by a select few and you should have the objectivity to discern whether you can join this elite club. Remember that many investors unrealistically believe that they have a rare gift because the stock market provides an exceptionally fertile environment for selfdeception. Participants in the stock market can easily live in a world of make belief by accepting confirming evidence and rejecting contradictory evidence. As David Dreman says: “Under conditions of anxiety and uncertainty, with vast interacting information grid, the market can become a giant Rorschach test, allowing the invest wishes....experts cannot only analyse information incorrectly, they can also find relationships that aren’t there- a phenomenon called illusory correlation.” Psychologically Difficult Approach The stock market is periodically swayed by two basic human emotions, viz. Greed and fear. When greed and euphoria sweep the market prices rise to dizzy heights. On the other hand, when fear and despair envelop the market, prices fall to abysmally low levels. If you can surmount these emotions which can wrap your judgment, create distortions in your thinking, and induce you to commit follies, you are likely to achieve superior investment results. The psychologically difficult approach essentially calls for finding ways and means of substantially overcoming fear and greed. Its operational guidelines are as follows: 1. Develop an investment policy and adhere to it consistently 2. Do not try to forecast stock prices 3. Rely more on hard numbers and less on judgment 4. Maintain a certain distance from the market place 5. Face uncertainty with equanimity These guidelines look simple, but they are psychologically difficult to follow. Yet, for the bulk of the investors this appears to be only sensible approach to improve the odds of their investment performance.

INVESTMENT AND SPECULATION Traditionally, investment is distinguished from speculation in three ways, which are based on the factors of: 1. Capital gains. 2. Time period. 3. Risk

The distinction between investments and speculations is given in the below: Investment Speculation Time Horizon Long-term time Short-term planning framework beyond 12 holding assets even months. for one day with the objective. Risk It has limited risk. There are high profits and gains. Return It is consistent and High returns, though moderate over a long risk of loss is high. period. Use of funds Own funds through Own and borrowed savings funds. Decisions Safely, liquidity, Market behaviour profitability and information, stability, judgements on considerations and movement in the performance of stock market. companies. Hunches and beliefs. 1. Capital Gain The distinction between investment and speculation emphasizes that if the motive is primarily to achieve profits through price changes, it is speculation. If purchase of securities is preceded by proper investigation and analysis and review to receive a stable return over a period of time, it is termed as investment. Thus, buying low and selling high, making large capital gain is associated with speculation. 2.

The second difference is the consideration of the time period. A longer-term fund allocation is termed as investment. A short-term holding is associated with trading for the ‘quick turn’ and is called speculation. The distinction between investment and speculation is helped to identify the role of the investor and speculator. The investor constantly evaluates the worth of a security through fundamental analysis, whereas the speculator is interested in market action and price movement. These distinctions also draw out the fact that there is a very fine line of division between investment and speculation. There are no established rules and loss, which identify securities, which are permanent for investment. There has to be a constant review of securities to find out whether it is a suitable investment. To conclude, it will be appropriate to state that some financial experts have called investment ‘a well grounded and carefully planned speculation’, or good investment is a successful speculation. Therefore, investment and speculation are a planning of existing risks. If artificial and unnecessary risks are created for increased expected returns, it becomes gambling.

3.

Risk The word ‘risk’ has a definite financial meaning. It refers to possibility of incurring a loss in a financial transaction. In a broad sense, investment is considered to involve limited risk and is confined to those avenues where the principal is safe. ‘Speculation’ is considered as an involvement of funds of high risk. An example may be cited of stock brokers’ lists of securities which labels and recommends securities separately for investments and speculation purposes. Risk, however, is a matter of degree and no clear-cut lines of demarcation can be drawn between high risk and low risk and sometimes these distinctions are purely arbitrary. No investments are completely risk-free. Even if it safety of principal and interest are considered, there are certain non manageable risks which are beyond the scope of personal power. These are (a) the purchasing power risk – In other words, it is the fall in real value of the interest and the principal and (b) the money rate risk or the fall in market value when interest rate rises.

These risks affect both the speculator and the investor. High risk and low risk are, therefore, general indicators to help and understanding between the terms investments and speculation. The risks are caused by the following factors: 1) Wrong decision of what to invest in. 2) Wrong timing of investment. 3) Nature of the instrument invested say, the category of assets like corporate shares or bonds, Chit funds, Nidhis, Benefit funds etc. are highly risky, as they are in the unorganized sector. Some instruments as bank deposits or P.O Certificates are less risky, due to their certainty of payment of principal and interest. 4) Creditworthiness of the issuer: The securities of Government end semi-Government bodies are more credit worthy than those issued by the corporate sector and much less secure are those in the unorganized sector like indigenous bankers, shroffs, chit funds etc. private limited companies share and shares of unlisted companies are more risky. 5) Maturity period are length of investment: The longer the period, the more risky is the investment normally. 6) Amount of investment: The higher the amount invested in any security the larger is the risk, while a judicious mix of investments in small quantities may be less risky. 7) Method of investment, namely, secured by collateral or not. 8) Terms of lending such as periodicity of servicing, redemption periods etc. 9) Nature of the industry or business in which the company is operating. 10) National and international factors, acts of god etc.

Reference was made to two types of Risk of investor: • Systematic Risks- • Unsystematic Risks1. Systematic Risks- Systematic Risks are out of external and uncontrollable factors, arising out of the market, nature of the industry and state of the economy and a host of other factors. In other words systematic risk refers to that portion of the total variability of the return caused by common factor affecting the prices of all securities alike through economic, political and social factors.

2. Unsystematic Risks- Unsystematic Risks emerge out of the known and controllable factors, internal to the issuer of the securities or companies. In other words unsystematic risk refers to that portion of the total variability of the return caused due to unique factors, relating that firm or industry, through such factors as management failure, labour strikes, raw material scarcity etc. While the systematic risk is common to all companies and has to be borne by the investor and compensated by the Risk Premium, The unsystematic risk can be reduced by the investor through proper diversification and planning a proper investment strategy for the purpose.

Examples of Systematic Risks Market Risk: This arises out of changes in Demand and Supply pressures in the markets, following the changing flow of the information or expectations. The totality of the investor perception and subjective factors influence the events in the market which are unpredictable and give rise to risk, which is not controllable. Interest Rate Risk: The return on an investment depends on the interest rate promised on it and changes in market rates of interest from time to time. The costs of funds barrowed by companies or stockbrokers depend on interest rates. The market activity and investor perceptions change with the changes in interest rates. These interest rates depend on nature of instruments, stocks, bonds, loans etc maturity of the periods and the creditworthiness of the issuer of securities. But basically the monetary and credit policy, which is not controllable by the investor, affects the riskiness of investments due their effects on returns, expectations, and the total principal due to be refunded Purchasing Power Risk.

Inflation or rise in prices lead to rise in costs of production, lower margins, wage rises and profit sqeezing etc. The return expected by the investors will change due to change in real value of returns. Cost pushed inflation is caused by rise in the costs, due to wage rise or rise in input prices. Demand-pull forces operate to increase prices due to inadequate supplies and rising demand. The increase in demand may be caused by changing expectation of future interest rates and inflation or due to increase in money supply or creation of currency to finance the deficits of the government. This element of purchasing power risk is inherent in all investments and cannot be controlled by him.

Examples of Unsystematic Risks Business Risk: This relates to variability of business, sales income, profits etc., which in turn depend on the market conditions for the product mix, input supplies, strength of competitors etc. This business risk is sometimes external to the company due to changes in government policy or strategy of competitors or unforeseen market conditions. They may be internal due to fall in production, labour problem, raw materials problem or inadequate supply of electricity etc. The internal business risk leads to fall in revenues and in profit of the company, but can be corrected by certain changes in the company’s policies. Financial Risk: This relates to the method of financing, adopted by the company, high leverage leading to larger debt servicing problems or short term liquidity problems due to bad debts, delayed receivables and fall in current assets or rise in current liabilities. These problems could no doubt to be solved, but they may lead to fluctuations in earnings, profits and dividends to share holders. Sometimes, if the company runs in to losses or reduced profits, these may lead to fall in returns to investors or negative returns. Proper financial planning and other financial adjustments can be used to correct this risk and as such it is controllable. Default Insolvency Risk: The barrower or issuer of securities may become insolvent or may default, or delay the payments due, such as interest installments or principal repayments. The barrower’s credit rating might have fallen suddenly he became default prone. Insolvency or bankruptcies. In such cases the investor may get no return or negative returns. An investment in a healthy company’s share might turn out to be a waste paper, if within a short span, by the deliberate mistakes of management or acts of God, the company became sick and its share price tumbled below its face value.

Other Risks In addition to the above major risks both in controllable and uncontrollable categories, there are many more risks, which can be listed, but in actual practice, they may vary in form, size and effect. Some of such identifiable risks are: Political Risks: Political risks, fallowing the changes in the government, or its policy shown in fiscal or budgetary aspects etc., through changes in tax rates, imposition of controls or administrative regulations etc.

Management Risks: Management Risks, due to errors or inefficiencies of management, causing losses to the company. Marketability Risks: Marketability Risks, involving loss of liquidity or loss of value in conversions from one asset to another say, from stocks to bonds, or vice versa. Such risks may arise due to some features of securities, such as capability; or lack of sinking fund or Debenture Redemption Reserve fund, for repayment of principal or due to conversion terms, attached to the security, which may go adverse to the investor. All the above types of risks are of varying degrees, resulting in uncertainty or variability of return, loss of income and capital losses, or erosion of real value of income and wealth of the investor. Normally the higher the risk taken, the higher is the return. But sometimes the risk is caused by acts of God and there may be no return at all.

Investment and Gambling The difference between investment and gambling is very clear. From theabove discussion, it is established that investment is an attempt to carefully plan, evaluate and allocate funds in various investment outlets which offers safety of principal, moderate and continuous returns and long-term commitment. Gambling is quite the opposite of investment. It connotes high risk and the expectation of high returns. It consists of uncertainty and high stakes for thrill and excitement. Typical examples of gambling are horse racing, game of cards, lottery etc. Gambling is based on tips, rumours and hunches, it is unplanned, non- scientific and without knowledge of the exact nature of risk. These distinctions between investment, speculation and gambling give us a basic idea of their nature, purpose and role.

DATA ANALYSIS, INTERPRETATION AND PRESENTATION The following data is collected with the help of Questionnaires Method and from the individual person. It is restricted to 52 individual only.

CONCLUSION AND SUGGESTION

CONCLUSION:-

The investors decisions are driven by the economic indicators such as GDP, inflation rate, unemployment rate, NNP, GNP, Monsoon, Government Policies, etc. The study shows how different factors and instruments have different risk, returns and tax consideration while taking investment decisions and are of diverse natures. It is very difficult to come to any definite conclusions that how a particular market instrument is doing and how they will perform in the future, but still the study concludes to an extent that the particular instrument or product like shares or government security has performed well in the past, and supposed with strong demands will perform well in the future. The economy has done immensely well and so is the performance of the share market, which has given a very high returns to the investors. Thus share market is presently very booming and expected even more in the future. The study takes random sample of fifty two individual person that denotes the whole population of investing community, which is limited to the extent of accurate results. The population for the future of the investing community is that it will give very high returns for the securities that are fundamentally strong and not by any others means. The study also draws and important conclusion from the study that the investors are a keen to invest in long term and less risk products, much interested to earn the good return on their investments . Investors are aware about the factors affecting their short term as well as long term investment plans and they do take advise from different experts, self- analysis by investors themselves. This intensive study will somehow help investors in deciding the correct investment for their savings.

SUGGESTIONS: Better analysis tools should be used to make predictions.  It is recommended that investors decision should be based on their broker advice.  Risk and returns should be evaluated before making an investment decision.  There should be a regular sms updates to the investors regarding their investment.  Those investors who want to avoid risk should invest in treasury notes or high-rated municipal bonds and debenture etc.  Client awareness program has to be conducted by Since the intent and web based communication is getting popular.  As investors investment decision is based on the study of different sources, therefore proper advertisement in business newspaper and in business magazine.  Most of the investors portfolio is diversified so there is huge scope in various new services like mutual funds etc.

BIBLIOGRAPHY: Preeti Singh, “Investment Management” (security analysis and portfolio management). 17th Revised Edition: 2009, Himalaya Publishing House, New Delhi, page no: 2,3,4,5,6,7,8,11,12,13.  V.K. Bhalla, “Investment Management” ( security analysis and portfolio management), 16th Revised Edition, S. Chand & Company Limited, New Delhi, page no: 27, 31 32, 33.  Prasanna Chandra, “Investment Analysis and Portfolio Management”, 2nd Edition, Tata mcgraw Hill Publication Company Limited, New Delhi, Page no: 27, 31, 32,33.  V.A Avadhani, “Securities Analysis and portfolio management” 9th Revised Edition, Himalaya Publishing House, New Delhi, page no: 14, 15 49, 50.

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