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Business Research Methodology
Proposal-
Comparative Study of Investing Patterns of Different
Age Groups
Under the Guidance of –
Dr. VSR VIJAYAKUMAR
Submitted by-
Group 4 Section-B
Members-
Drishya Krishnan (2014090)
Garrima Parekh(2014091) Gaurav Agarwal(2014092) Gaurav Garewal(2014093)
Gaurav Mukim(2014094) Gaurav Vij(2014095)
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Acknowledgement
We take this opportunity to thank Institute of Management Technology, Nagpur for giving us
an opportunity to take this course and learn. We express our appreciation to our Professor Dr.
VSR VIJAYAKUMAR for his immense support and his invaluable guidance throughout this
Research proposal. It would not be possible for any student to accomplish this proposal without
Dr. Vijayakumar’s support. We even wish to appreciate all the effort put in by our fellow
students of Institute of Management Technology and others who helped us in filling the survey
and supporting us with the completion of the proposal.
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Table of Content
Content Pg.
No. Acknowledgement 2
Abstract 4
Research Proposal 5
Literature Review 6
Research Objectives 8
Methodology 8
Time Scale 8
Hypothesis 9
Variables 10
Results & Findings 11
Appendix 18
Questionnaire 19
Questionnaire Mapping 20
Cross-Tabulations 21
Primary Data 24
Bibliography 26
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Abstract This paper examines the investment decisions of different age groups investors and investment
patterns with different income level. We find that older and experienced investors are more
likely to follow rules of thumb that reflect greater investment knowledge while young age
group tends to make risky investments However, older investors are less effective in applying
their investment knowledge and exhibit worse investment skill, especially if they are less
educated, earn lower income, and belong to minority racial/ethnic groups. The youth being
more enthusiastic and have an urge to learn invest in a more systematic manner Overall, the
adverse effects of aging dominate the positive effects of experience. These results indicate that
older investors' portfolio decisions reflect greater knowledge about investing, but investment
skill deteriorates with age due to the adverse effects of cognitive aging.
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Introduction
We have taken up financial investing preferences among different age groups as our topic and
over this research period we will try to understand how investing patterns and risk taking ability
of people change among different age groups.
TITLE
Comparative Study of Investing Patterns of Different Age Groups
BACKGROUND
The process of reforms as part of liberalization has resulted in greater investment in Indian
market. In today’s economy of less income growth and highly increasing cost of living, one
has to know how to use his/her savings to generate higher returns. Availability of too many
options and no clear idea about these choices is creating a hostile situation for the investor to
choose the best among the available alternatives.
An investor has several investment alternatives (such as stocks, bonds, precious metals, etc.)
to choose from, depending on his risk profile and expectation of returns. Different investment
substitutes represent a different risk-reward trade off. Low risk investments are those that offer
assured, but lower returns, while high risk investments provide the potential to earn greater
returns. Hence, an investor can choose the most suitable investment on the basis of his/her risk
tolerance.
Although we are exposed to various forms of investments, we need to understand a right mix
of saving patterns. There are different perceptions of the young generation and the older ones
while investing so we need to undertake a comparative study between each of them.
Organisations spend lot of money in devising investing plans for all age groups. Thus, we are
going to conduct a research on the same.
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Literature Review
An investor has various investment avenues while
investing his money. However these investment
decisions are affected by a number of other factors
such as his age, his income, his savings etc. All these
factors contribute towards selecting of an investment
avenue.
In our Research Project, we study how different factors such as age, gender, income, savings
etc. affect the investment decisions of people. Such researches are made by various agencies
such as Mutual Funds, Investment Planning Managers to make their decisions as to which
investment to offer to which investor.
INVESTMENT AVENUES
1. Equity:
Equity investment refers to investment in equity shares or stocks of companies. This is a
sector where most of the speculation takes place. Investors get return on their equity
investment. There are various risks associated with equity investment.
2. Bonds:
Bonds are basically debt instruments that are issued by government sector companies to the
public to raise money from them for financing purposes.
3. Corporate Debenture:
When debt instruments are issued by corporates, they are termed as corporate debentures.
Corporates issue debentures to raise money for specific purposes of projects etc.
4. Bank Fixed Deposits:
Bank Fixed Deposits are considered the
safest mode for investment. Banks collect
money from depositors in the form of Fixed
Deposits and provide them with a regular
return up to 9% on their investments.
5. PPF:
Public Provident Fund is a fund where
investors contribute a certain amount of their income every year towards the fund and they
are given returns on it. PPF is considered as one of the safest investment.
6. Life Insurance:
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Life Insurance is also considered as a safe mode of investment. It’s an investment where
people park in their money and contribute a certain premium regularly. The benefits of a
Life Insurance Policy can be reaped on maturity of the policy.
7. Post Office-NSC:
Post Office Saving Deposits or National Savings Certificates are investment options that
accept deposits in small amounts and provide returns. However the returns are less but the
returns are assured and there is minimal risk associated with them,
8. Gold/Silver:
Gold and Silver have been one of the most famous investment options since ages. People
having been investing money in them by buying gold and silver biscuits, cars, ETF’s etc.
hoping for the prices to appreciate continuously.
9. Real Estate:
Real Estate is one sector when the returns are tremendously high. People take loans to
invest in houses and their prices multiply in years and then they sell it to gain money.
10. Mutual Fund:
A Mutual Fund is a financial instrument that pools money from various investors and then
invests that money into various financial instruments spread across different sectors.
Mutual Funds are managed by Fund Managers.
FACTORS THAT AFFECT INVESTMENT DECISIONS:
1. Risk Tolerance:
Risk refers to the deviation that a person can undertake with his returns. Each person has
a different risk taking capacity and depending on that they make investments.
2. Return Needs:
More the risk a person undertakes, the higher is the return he will expect.
3. Investment Horizon:
The investment horizon refers to the time horizon for which the person keeps his money
invested.
4. Tax Exposure:
Tax Exposure means the extent to which the investor is ready to bear the tax burden. If
he’s tax averse, he will invest in safe investments like Fixed Deposits.
5. Investment Needs:
Investment needs refer to the amount of returns that the investor is expecting on his
investment.
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Research Objective To analyze the investing patterns among different age groups
To compare the investing preferences among different age groups
Methodology We would be adopting the descriptive type of business research because we would be collecting
the data and then summarizing it. We would be using qualitative and quantitative research
approaches.
Under Positivistic approach we would be doing surveys and cross sectional approaches.
For our field-work we would be dispensing questionnaire to the desired participants.
Two sets of questionnaire will made for different demographics. The each questionnaire would
be a combination of qualitative and quantitative. We would be using sites like, google doc,
survey monkey to make the questionnaire and send it to our focus group through mails, social
networking sites as well as direct approach.
Since we limited by time and resources, the survey would be cross-sectional in nature.
We would also refer internet and interviews for secondary data collection.
statistical tools like ANOVA and Regression Analysis through software’s like SPSS.
Time Scale 6.2.2014 - Framing of the title and objectives of the study. Drafting a research proposal
17.2.2014 - Making of questionnaire in accordance with the objectives of the research
27.2.2014 - Pilot testing of the survey questionnaire
3.3.2014 - Survey
15.3.2014 - Analysis of the data collected
19.3.2014 – Final writing of the report
Resources
24*7 Internet Supply
Access to EBESCO Database
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Hypothesis
Setting up and testing hypotheses is an essential part of statistical inference. In order to
formulate such a test, usually some theory has been put forward, either because it is believed
to be true or because it is to be used as a basis for argument, but has not been proved, for
example, claiming that a new drug is better than the current drug for treatment of the same
symptoms.
In each problem considered, the question of interest is simplified into two competing claims /
hypotheses between which we have a choice; the null hypothesis, denoted H0, against the
alternative hypothesis, denoted H1. These two competing claims / hypotheses are not however
treated on an equal basis: special consideration is given to the null hypothesis.
HYPOTHESIS 1 Youth does not tend to make risky investments
HYPOTHESIS 2 Gold investments are not higher during festive season
HYPOTHESIS 3 Mutual funds and debentures are preferred for long term investments
HYPOTHESIS 4 Investments in different sectors depends on time of the year
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Variables
Variable Metric Or Non Metric Measurement
Age Metric Scale
Gender Non Metric Nominal
Investment Metric Nominal
Reason for Investment Non Metric Nominal
Type of Investor Non Metric Ordinal
Frequency of Investment Metric Ordinal
% of Salary Invested Metric Ordinal
Preferred Investment
Avenue
Non Metric Nominal
Risk Profile Non Metric Nominal
Type of Industry Non Metric Nominal
Investment Horizon Non Metric Scale
Time of the Year Non Metric Nominal
Reference Groups Non Metric Nominal
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RESULTS
&
Findings
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Hypothesis 1 Youth does not tend to make risky investments
Variables Independent Dependent
Age
Investment in Equity Shares
Risk
Univariate OR Multivariate
It is a multivariate hypothesis and number of dependent are more than one.
Test for Normality
Tests of Normality
Age of the
respondent
Kolmogorov-Smirnova Shapiro-Wilk
Statistic df Sig. Statistic df Sig.
How would you rate
yourself in terms of taking
risks
dimension1
20-30 .236 28 .000 .809 28 .000
30-40 .285 17 .001 .792 17 .002
40-50 .363 19 .000 .740 19 .000
50-60 .286 14 .003 .810 14 .007
Above 60 .374 12 .000 .640 12 .000
Financial instruments do
you prefer
(Equity Shares)
dimension1
20-30 .392 28 .000 .622 28 .000
30-40 .380 17 .000 .632 17 .000
40-50 .376 19 .000 .633 19 .000
50-60 .478 14 .000 .516 14 .000
Above 60 .417 12 .000 .608 12 .000
Since the value of the independent groups, using ‘Shapiro-Wilk test’ is less than .05, therefore
the data is normal.
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Test to be Used
Since, the distribution is normal, therefore we will use parametric test. We will use ANOVA
as there are more than three independent group.
Test of Homogeneity of Variances
Levene Statistic df1 df2 Sig.
How would you rate yourself
in terms of taking risks
.805 4 85 .526
Financial instruments do you
prefer
(Equity Shares)
3.228 4 85 .016
ANOVA
Sum of Squares df Mean Square F Sig.
How would you rate yourself
in terms of taking risks
Between Groups 3.156 4 .789 1.841 .129
Within Groups 36.444 85 .429
Total 39.600 89
Financial instruments do
you prefer
(Equity Shares)
Between Groups 1.871 4 .468 1.944 .111
Within Groups 20.452 85 .241
Total 22.322 89
Analysis
Since the p value is greater than .05, therefore we will reject the hypothesis and conclude that
youth tends to make risky investment.
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Hypothesis 2 Gold investments are not higher during festive seasons
Variables Independent Dependent
Time of investments
Investment in Gold
Univariate or Multivariate It is a univariate hypothesis and number of dependent is one.
Test for Normality
Tests of Normality
When do you prefer to
invest
Kolmogorov-Smirnova Shapiro-Wilk
Statistic df Sig. Statistic df Sig.
Financial
instruments do you
prefer
(Gold)
Starting of the financial year .390 40 .000 .623 40 .000
End of the financial year .336 22 .000 .640 22 .000
Festival seasons .440 17 .000 .579 17 .000
Others .401 11 .000 .625 11 .000
a. Lilliefors Significance Correction
Since the value of the independent groups, using ‘Shapiro-Wilk test’ is less than .05, therefore
the data is normal.
Test to be used Since, the distribution is normal, therefore we will use parametric test. We will use ANOVA
as there are more than three independent group.
ANOVA
Financial instruments do you prefer
(Gold)
Sum of Squares df Mean Square F Sig.
Between Groups 1.281 3 .427 1.734 .166
Within Groups 21.175 86 .246
Total 22.456 89
Analysis Since the p value is greater than .05, therefore we will reject the hypothesis and conclude that
Gold investments are higher during festive seasons.
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Hypothesis 3 Mutual funds and debentures are preferred for long term investments
Variables Independent Dependent
Time Horizon
Investment in Debentures
Investments in Mutual Funds
UNIVARIATE OR MULTIVARIATE It is a multi-variant hypothesis as number of dependent variables are more than one.
Normality Test
Tests of Normality
For how long do keep
your money invested /
Time Horizon
Kolmogorov-Smirnova Shapiro-Wilk
Statistic df Sig. Statistic df Sig.
Financial instruments do
you prefer
(Mutual Funds) dimension1
Less than a year .538 20 .000 .236 20 .000
1yr - 3yrs .419 15 .000 .603 15 .000
3yrs - 5yrs .401 11 .000 .625 11 .000
5yrs - 10yrs .446 21 .000 .570 21 .000
Above 10yrs .459 23 .000 .551 23 .000
Financial instruments do
you prefer
(Bonds/Debentures) dimension1
Less than a year .487 20 .000 .495 20 .000
1yr - 3yrs .453 15 .000 .561 15 .000
3yrs - 5yrs .401 11 .000 .625 11 .000
5yrs - 10yrs .372 21 .000 .633 21 .000
Above 10yrs .392 23 .000 .622 23 .000
a. Lilliefors Significance Correction
Since the value of the independent groups, using ‘Shapiro-Wilk test’ is less than .05, therefore
the data is normal.
ANOVA
Sum of Squares df Mean Square F Sig.
Financial instruments do
you prefer
(Mutual Funds)
Between Groups 1.073 4 .268 1.466 .220
Within Groups 15.549 85 .183
Total 16.622 89
Financial instruments do
you prefer
(Bonds/Debentures)
Between Groups 1.600 4 .400 1.762 .144
Within Groups 19.300 85 .227
Total 20.900 89
ANALYSIS Since the p value is greater than .05, therefore we will reject the hypothesis and conclude that
mutual funds and debentures are not preferred for long term investments
Hypothesis 4 Investments in different sectors depends on time of the year
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Variables Independent Dependent
Time of the Year
Investments in Different Sectors
Univariate OR Multivariate It is a univariate hypothesis and number of dependent is one.
Normality Test
Tests of Normalityb
When do you prefer to
invest
Kolmogorov-Smirnova Shapiro-Wilk
Statistic df Sig. Statistic df Sig.
Which industry do you
prefer to invest
(Infrastructure)
Starting of the financial year .364 40 .000 .634 40 .000
End of the financial year .336 22 .000 .640 22 .000
Festival seasons .380 17 .000 .632 17 .000
Others .448 11 .000 .572 11 .000
Which industry do you
prefer to invest (Energy &
Power)
Starting of the financial year .377 40 .000 .629 40 .000
End of the financial year .359 22 .000 .637 22 .000
Festival seasons .410 17 .000 .611 17 .000
Others .401 11 .000 .625 11 .000
Which industry do you
prefer to invest (Banking &
Finance)
Starting of the financial year .453 40 .000 .559 40 .000
End of the financial year .496 22 .000 .474 22 .000
Festival seasons .410 17 .000 .611 17 .000
Others .448 11 .000 .572 11 .000
Which industry do you
prefer to invest
(Agriculture)
Starting of the financial year .536 40 .000 .292 40 .000
End of the financial year .430 22 .000 .590 22 .000
Festival seasons .521 17 .000 .385 17 .000
Which industry do you
prefer to invest (Industry &
Services (Textile, Services,
Retail, Tourism, Mining))
Starting of the financial year .428 40 .000 .591 40 .000
End of the financial year .406 22 .000 .613 22 .000
Festival seasons .440 17 .000 .579 17 .000
Others .401 11 .000 .625 11 .000
a. Lilliefors Significance Correction
b. Which industry do you prefer to invest
(Agriculture) is constant when When do you prefer to invest = Others. It has been omitted.
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Analysis
ANOVA
Sum of Squares df Mean Square F Sig.
Which industry do you
prefer to invest
(Infrastructure)
Between Groups .756 3 .252 .999 .397
Within Groups 21.699 86 .252
Total 22.456 89
Which industry do you
prefer to invest (Energy &
Power)
Between Groups .443 3 .148 .586 .626
Within Groups 21.657 86 .252
Total 22.100 89
Which industry do you
prefer to invest (Banking &
Finance)
Between Groups .288 3 .096 .477 .699
Within Groups 17.312 86 .201
Total 17.600 89
Which industry do you
prefer to invest
(Agriculture)
Between Groups 1.088 3 .363 3.348 .023
Within Groups 9.312 86 .108
Total 10.400 89
Which industry do you
prefer to invest (Industry &
Services (Textile, Services,
Retail, Tourism, Mining))
Between Groups .059 3 .020 .085 .968
Within Groups 19.941 86 .232
Total 20.000 89
As the value in agriculture is less than .05 therefore we can say that investment in agriculture
depends on the time the year while investment in other sectors doesn’t as for all of them, p
value is greater than .05.
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Appendix
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Questionnaire
1) Name: ______________________
2) Age –
18-25 25- 35 35- 50 Above 50
3) Gender –
Male Female
4) Do you invest?
Yes No
5) What percentage of salary do you invest?
0 – 20 20- 40 40 – 60 60 - 80
80- 100
6) Since when are you investing –
Less than 1 year 1 year – 5 years
5 years– 7 years more than 7 years
7) Reason for Investment (tick at least one) –
Quick Money General Savings Future provisions
8) Financial instrument do you prefer?
Equity Shares Preferential Share
Bonds/Debentures Real estate
Gold Commodity
9) How do you rate yourself in terms of taking risk?
Low Moderate High
10) Which industry do you prefer to invest?
Infrastructure Energy & Power Banking & Finance
Agriculture
Industry & Services (Textile, Services, Retail, Tourism, Mining)
11) For how long do keep your money invested / Time Horizon –
Less than a Year 1 year – 3 years 3 years – 5 years
5 years – 10 years above 10 years
12) When do you prefer to invest?
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Starting of the financial year
Ending of the financial year
Festive season
Others, mention______________________
13) From where do seek your investment advice –
Broker Friends Financial Websites
Others, ______________________
Questionnaire Mapping
1. Objective 1
2. Objective 3
3. Objective 3
4. Objective 3
5. Objective 3
6. Objective 1
7. Objective 3
8. Objective 3
9. Objective 2
10. Objective 1
11. Objective 2
12. Objective 2
13. Objective 1
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Cross-Tabulation
On cross-tabulating ‘age’
against ‘Reason for investing
as quick money’, we find a
declining trend. The age
group of ‘20-30’ shows a
higher intent on investing for
quick money while as the age
progresses lesser number of
people tend to invest for quick
money.
Here we see that there is
a very high number
responses between the
ages ‘20-30’ who said
‘No’ to ‘investment for
future provisions’. There
is a parity between age
group of ’40-above 60’
who prefers to invest for
‘Future provisions’
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In our 1st hypothesis we
proved that the youth are
risk taking. Here we clearly
see, greater number of
respondents opting for
‘equity shares’ are between
the age group of ‘20-30’.
There is lower but equal
distribution among the
respondents for equity
shares.
Investment in real
estate market are
usually made by the age
group of ‘40-50’. This
could be because the
investments in this
instrument in very high
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We see that all age groups
take their financial advice
from a broker. But it the
youth i.e. age group ‘20-30’
and the immediate next age
group also looks for online
financial advice and analysis.
This shows how the youth are
well aware of IT technology
(internet) and how it can help
them in every aspects of life.
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Primary Data
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BIBLIOGRAPHY
1. http://investmentopportunitiesinindia.wordpress.com/2012/07/23/investment-
scenario-in-indian-market/
2. Zikmund G. Willaim – Business Research Methods – Thomas Southwestern
Publications – 7th Edition, Page number: 20-40
3. http://www.indianresearchjournals.com/pdf/IJSSIR/2012/May/7_IJS_MAY2012.pdf
4. Research article from: http://www.chimc.in/volume3No2/RESEARCH%20PAPER-
2.pdf
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