Perception of Stock Market investment with reference to

Perception of Stock Market investment with reference to Students

Studying in Karnataka.

Dr. Sharan Kumar Shetty

Associate Professor & Governing Body Member

Manel Srinivas Nayak Institute of Management, Mangaluru

ABSTRACT

Stock market is known as a pulse of developing economy, which reflects the economic conditions

of a country. The stock market is growing day by day and opportunities in the stock market are

also increasing rapidly. Investing in stock market is also contribution for economic growth of the

country. Few youngsters believe that, a career in the stock market is only for people with stable

finance or business background. People from all the educational backgrounds like science,

commerce or arts can also start their career in the stock markets. One of the surveys tells that

youngsters do not invest more in stock market. There might be students who are not still aware of

stock market. Even if they know about stock market, few students are still unaware to invest in

stock market. There might be several reasons for student for not knowing or not investing in stock

market. The most common reason is stock market has more risk and lots of investment, which is

not true. To find out the attitude of students towards the stock market, reasons for students not

investing in stock market and also to measure the level of student’s satisfaction in the investment

in shares. The research was done on the topic “Stock Market Perception of Students in the

Mangaluru District”

Key words – Stock market, Investment, Securities, Risk, Stock market awareness.

Science, Technology and Development

Volume X Issue III MARCH 2021

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INTRODUCTION

Stock is a term used to symbolize an investor’s ownership in a company. Those who own stock

are commonly called stockholders or shareholders. As a shareholder, an investor theoretically

owns a percentage of everything the company owns or owes. The company’s profitability or lack

thereof, determines whether its stock is traded at a higher or lower price. While trading of debt and

commodities has its origins in middle ages, the modern concepts of a stock market began in the

late 16th

century.

Stock market is the place where shares of public listed companies are traded. The primary market

is where companies float shares to the general public in an initial public offering (IPO) to raise

capital. Once new securities have been sold in the primary market, they are traded in the secondary

market, where one investor at the prevailing market price or at whatever prices both the buyer and

seller agree upon. The secondary market or the stock exchanges are regulated by the regulatory

authority. In India the secondary and primary markets are governed by the Security and Exchange

Board of India (SEBI). A stock exchange facilitates stock brokers to trade company stocks and

other securities. A stock may be bought or sold only if it is listed on an exchange. Thus, it is the

meeting place of the stock buyers and sellers. India’s premier stock exchange is the Bombay stock

exchange and the National stock exchange. Stock markets are the platforms where buyers and

sellers of shares meet and decide on s price to trade and earn great profit by investing wisely in the

company .By investing in company one can make money . According to these sayings “Youth of

today is the leader of tomorrow” we are mainly focusing on student’s attitude and behaviors

towards stock market.

OBJECTIVES OF THE STUDY

• To study the extent of stock market perception of the students.

• To measure the level of student’s satisfaction in the investment in shares.

• To find the reasons for students not investing in stock market.

PROBLEM STATEMENT

This study was conducted among the students from the age of 18years to 24 years throughout

different colleges and places. This research was conducted to know the various factors affecting



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students for not having proper awareness about stock market, reasons for students not investing in

stock market and also to find the attitude of student towards stock market by considering various

factors and using methodologies. To find the various reasons behind students for not investing in

stock market.

REVIEW OF LITERATURE

Review of literature benefits a researcher to get familiarized with our selected research problem

and also may provide some guidelines in selecting a proper research methodology. Moreover, it

helps in finding out the research gaps in the existing literature. This will help the researcher in

fine-tuning their research problem and methodology. Another benefit of reviewing the existing

literature is that in cases where the research problems are similar, the conclusions and findings

may be easily compared. It will help the researcher to determine if their findings are practically

capable of working successfully or not.

Seth et al. (2010) conducted a study examining the awareness about financial instruments and

reported that around 96 per cent of Indian investors have savings account in the banks, but only

around 30 per cent had knowledge about National Savings Certificate & Public Provident Fund

Korea (2013)6 in their article titled “An Analytical Study: Relevance of Financial Inclusion for

Developing Nations” The study focused to analyze the current status of financial inclusion in

Indian economy and to explore the significance of financial inclusion for social development of

society. The study stated that, to achieve inclusive growth, India has to look upon the financial

inclusion aspects.

. Bind (2013)5 the Ph.D thesis titled “Financial Literacy and the Income Level Influences on

Savings And Investment Pattern of Urban City” The study aimed to analyze the level of financial

literacy levels and the income level influences on savings and investment pattern of urban city

households in the Coimbatore City., the study reveals that young investors in the age category of

25-35 years are more interested in investing in financial market products, than the adult investors

in age grouping of 40 years and above study identified that people choose safe mode of saving or

investment.



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Radh (2015)26in their article titled “Investors’ awareness towards investment in corporate

securities: a micro level study”. The study attempted to 34 find the awareness of individual

investors in corporate securities in Chennai. The study reveals that the investors’ socioeconomic

factors have significant influence on investors’ awareness. The study also disclosed that the use of

information sources to know their awareness of corporate securities.

Brian C. Rezny, CFP President, Rezny Wealth Management, Ltd.: The review shows there are

some common mistakes made by the investors while taking investment decisions. The researcher

noted that these common errors are investment myths, lack of knowledge and greed of the investor.

The researcher has found that the haste and greed are the problems to fall in the investment market.

Nash (2012), that is, 98 per cent of Indian citizens do not have a Demat account, and thus lack

awareness about stock markets. Although many studies have been carried out in parts of the

country and abroad, as mentioned earlier, in India a limited number of studies have been conducted

in this area. Thus, it is against this backdrop that the present study has been undertaken to fill up

this gap and make a modest contribution in the field.

Thilakam (2012) in his study found that the financial knowledge of rural masses in India is very

much limited to the traditionally known savings and investment avenues like bank saving, holding

insurance policy, investment in equities, gold or in land/building. Similar inferences were drawn

METHODOLOGY

The method used for this research is quantitative approach to provide and gather as much

informative and relative evaluation quantitative method was used. This method includes the use of

questionnaires. The questionnaires were sent through personal contact. A questionnaire was used

as main data gathering instrument for this study .It was divided into two main sections : the profile

and the questionnaire .The profile contains socio-demographic characteristics of respondents such

as email ID ,age, gender , and educational background and the questionnaire contains factors

affecting our study.

The sample collected in the survey by 160students in the South Canara District of Karnataka.



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RESULTS

Collection of data is an important element of research from which we can arrive at useful findings

and conclusions. Primary data was collected through the help of Google form, which was sent to

the youngster of the age group of 18 to 24, the study, aims at this age group because “Youth of

today is the leader of tomorrow”. People of this age might be tough about stock market. Data was

collected from 160 students mainly from state of Karnataka, Kerala, and Maharashtra. Collected

data was analyzed and presented with the help of charts. Detailed analysis has helped the researcher

to draw a clear picture of the student’s awareness towards stock market.

Demographic factors:

Demographic factors are the study of a population expressed statistically, such as age, sex,

education level, income level, marital status, occupation, religion, birth rate etc. These are factors

that are used to define the characteristics of a person or a population. Since our study is based on

student’s awareness towards stock market. Student’s data is collected about their age, gender,

educational background, region etc. The study is mainly based on students of the age 18-24. There

are students who are currently graduating, and few might have completed and looking up for

further studies. We aim at this particular age group because the students get a clear idea about the

economics conditions and other factors about their life.so; we think this age is the best age for

students to know about the stock market. And the students get an idea about investment.

Gender:

The chart below shows the classification of students as per their Gender.

Gender No of Students

Female 104

Male 56



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The data shown below clearly exhibits that female students have more interest in investing in the

stock market as their focus is in the savings and investments. This witnesses that the female

students must be given lot of awareness in the colleges so that they will encourage other members

in the family which shall help the society as a whole. As the saying goes if you teach man he just

use it for him only but the girls will share it with everyone.

Thus, the sample shows that females students are very much interested in the investment in stock

market.

Educational background

The below charts show the educational background of all 160 students.

Educational Background No of

Students

Commerce 124

Science 28

Arts 8

Gender

35%

65%

Female

Male



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Region

55%%

90%

Karnataka

Kerakla

Maharastra

The students with the basic background of Commerce are aware about the stock market

investment. This is because of their knowledge in the field as they study the subjects like Financial

Management, Management Accounting and other relevant subject which shall help them to

understand the fundamentals of the securities. The other outcome of this survey shows that the

authorities can focus on involving more and more commerce students into the process. This will

give positive impact to the financial market.

Region:

Below charts show the region of students Participated in this Survey.

Region No of Students

Karnataka 144

Kerakla 8

Maharastra 8

Educational Background

185%%

77%

Commerce

Science

Arts



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The survey shows that students studying are mainly from the Karnataka. The other states like

Kerala and Maharashtra are very less when it compared with Karnataka, Chart shows that out of

160 students, 141students belong to Karnataka state.11 students belong to Kerala state. 8 belong

to Maharashtra state.

Savings detail

The below charts show about saving students expected to have

Savings Information No of Students

0 40

< 2000 72

2000-5000 36

5000 < 12



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The Chart shows 45.6% expect to have less than Rs.2000 saving. 25% have no saving. 23.1%

Students have between Rs.2000-Rs5000 saving. And only 10% of students have more than Rs

5000 saving. This clearly exhibits that saving habits in the students have been come down due to

lack of awareness about the investment. This issue has to be solved through the effective

implementation of financial awareness programmes through the support of government and the

private organizations at a large extend which shall facilitate youth to invest in the different avenues

of the financial market.

Saving Information of

Students

8%

25%

22%

45%

0

< 2000

2000-5000

5000 <



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Chi Square Test

Null Hypothesis: Savings habit and gender are independent

Gender * Saving detail Crosstabulation

Count



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Saving detail Total <2000 >5000 0 2000-5000

Gender Female 56 8 20 20 104

Male 16 4 20 16 56

Total 72 12 40 36 160

Chi-Square Tests

Value

df

Asymptotic

Significance

(2-sided)

Pearson Chi-

Square 10.549

a 3 .014

Likelihood Ratio 10.716 3 .013

No. of Valid Cases 160

a. 1 cells (12.5%) have expected count less than 5. The minimum

expected count is 4.20.

The hypothesis of independence of savings habit and gender is rejected. (Chi square value

=10.549, P- value =0.014)

Choice of Investment

The following chart shows students choices in investment



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Option to

Choose for…

39% 32%

19% 10%

Bank

Deposit

Mutual

Fund

Option to Choose for

Investment

No of Students

Bank Deposit 51

Mutual Fund 17

Gold 30

Stock Market 62

Following chart shows that, 61.3% student refer to invest in bank deposit, 25.6% students in stock

market, 6.9%student in gold/ real estate, 6.3%students refer to invest in mutual fund. The sample

collected really shows that students still focus on traditional way of investment as they are not

aware of the modern financial tools available in the market and also they are not ready to take risk

in the stock market products. There is a gray area to bring lot of knowledge to the stock market

products into it.

Students Perception about stock market

The below chart shows students awareness about stock market

The above chart shows 71.9% (115) students are aware of stock market and 28.1% (45) students

are not aware of stock market. Even though the students are aware of the stock market services,

they are not ready to invest in the avenue due to lack of courage and they are not ready to take risk.



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Knowledge about

Stock Market

13%

24% 51%

12%

Education

Institute

Family & Friends

Social Media

The curriculum must support them to go with stock market instruments which will give high risk

provided getting involved in high risk.

The following data collected from student who were aware of stock market:

Knowledge about stock market

The following data was collected from 115 students who were aware of stock market.

Knowledge about

Stock Market

No of Students

Education Institute 81

Family & Friends 20

Social Media 39

Others 20

The above chart shows that 73% (84) students came to know from educational institute. 24.3%

(28) students came to know from family and friends. 22.6% (26) came to know from social media.



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Student opinoion about

stock market

19%

10% 58%

13%

All the above

Money Making

Risk Taking

Time consuming

And rest of the 7% (8) students came to know from other sources. The educational institute acts

as a guide in spreading the awareness of stock market which will help all the students to understand

the efficacy of the investment and that will automatically bring importance of investment.

Students opinion about stock market

Following graph shows the students opinion about stock market,

Student opinion about

stock market

No of

Students

All the above 93

Money Making 21

Risk Taking 15

Time consuming 31

The above chart shows that 33.9% (39) think stock market is risky.28.7 %( 33) thinks stock market

is money making.5.2 %( 6) think it is time consuming and 47 %( 54) thinks all the following

content in it. This exhibits the idea of stock market is always risky in nature as they are totally

thinking this stock market product is very risky.

Best age to invest according to students:



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Best Age to Invest

13% 21%

30%

36%

<18

18-24

25-50

50<

Following charts shows what thinks is the best age to invest in stock market

Best Age to Invest No of

Students

<18 34

18-24 58

25-50 48

50< 20

The above charts show 60% of students believe that 25-50 is the best age to invest in stock

market.37.4% thinks 18-24 is the best age to invest in stock market. People believe that best age

to invest is below 18 and rest of the student believe that best age to invest is after 50

Students View on Stock Market contributes to Economic Growth .



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Stock Market Contributes to

Economic Growth

41%

59%

Yes

No

Following charts shows what students think investing in stock market is relating to economic

growth.

Stock Market Contributes to

Economic Growth

No of

Students

Yes 141

No 199

Above charts shows that 83.5% believe that stock market effects the economic growth. And rest

16.5% believe that stock market does not affect the economic growth of the country. Even if the

people know that investing stock market effect the economic growth of the country people are not

willing to teach or invest in stock market considering the demerits of stock market.

Demat account

Following charts shows whether students who know about stock market has de-mat account



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Demat Account Holders

12%

88%

Yes

No

Demat Account

Holders

No of Students

Yes 141

No 19

The above chart shows 86.1% don’t have De-mat account. And rest 13.9% have De-mat account.

Which shows even if people are aware of stock market people didn’t get good flat form to open

de-mat account.

Following questions were asked to all

Do educational institutions encourage stock market



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Do Education Institutions Encourage

Students in Stock Market Investment

30%

70%

Yes

NO

Educations

Institutions

encourage Students

to investment in

Stock Market

No of Students

Yes 112

NO 48

70% students believe that educational institute encourages stock market were rest 30% believe that

educational institution does not encourages stock market. This tells that all the educational institute

doesn’t encourage stock market and don’t teach more about it.

Do you think Indian government encourages stock market?



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Encouragement by the Government

to invest in stock market

53% 47%

Yes

No

Encouragement by the

Government

No of Students

Yes 76

No 84

From the above graph we can tell that 53.1% tell government is not encouraging others to invest

to stock market and rest 46.9% this government is encouraging to invest in stock market. Which

tells that government is not encourageing youngsters to invest in stock market.

Practical knowledge about stock market

Practical Knowedge about the Stock Market No of Students

Yes 151

No 9



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Above graph shows that 96.3% tells practical knowledge about stock market has to give to students

.and rest 3.7% students tells no need of giving practical knowledge. Which tell most of them belie

practical knowledge has to be given to students about stock market and show them practically not

theoretically.

Recommend others about stock market

Ready to Recommend otthers to Invest No of Students

Yes 153

No 7

Practical Knowledge about the Stock

Market

6%

94%

Yes

No



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Above chart shows that 48.8% students are not sure about recommending this to others, 47.5%

recommend others to invest in stock market and rest do not recommend others about stock market.

Which show that people are not that much aware of stock market so most of the students are not

sure in recommending others about stock market?

DISCUSSIONS

The study mentions that people consider fixed deposits in banks as the most effective financial

instrument followed by stock market. They are also using the traditional way of investment i.e.

bank deposit, fixed deposit, gold, silver, land, property etc. Simple principle of investment is high

risk, high return and low risk low return, so if one wants high returns, they must take risk. Proper

knowledge about stock market has to be given to youngsters. Government should bring awareness

among people about stock market and give them more opportunity to invest in shares. Economic

growth of country is influenced by investment decisions. Advice about stock market must be given

to youngster. Not only about stock market but the step involved before investing has to be tough

to students.

DEMAT account has to be given to a student from educational institution collaborating with any

certified brokers Investment in stock market has to be the part of educational system. Partial

Ready to Recommend Others to

Invest

4%

96%

Yes

No



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knowledge about investment should be given to students Media must provide news about stock

market. Research strongly felt that there is a need of giving practical knowledge about stock market

to students. The study highlights that students thinks that stock market as a time-consuming risk

taking due to various factors so students must be given proper awareness about stock market and

encourage them to invest in stock market which indirectly effects the economic growth of the

country. The educational institution has to encourage student to participate in stock market and

has to give practical knowledge about it. Not only educational institution but also government and

media have to give proper awareness about stock market. People have to be properly known

ledged about stock market before spreading wrong rumors about stock market. Even parents can

encourage their children to participate in stock market along with them instead of misleading them

about stock market and keeping age limit as a bearer.

REFERENCES

• Anand, Shefali, 2006, Mutual Fund Hot Spot: India, Wall Street Journal - Easter Edition, Vol

247, Issue 57, ppC1-C3

• Bogle John C, November-December 1970, Mutual Fund Performance Evaluation, Financial

Analysts Journal, pp 25-33.

• Carhart, Mark M, 1997, On Persistence in Mutual Fund Performance, Journal of Finance,

Volume 53, pp 57-82.

• http://shodhganga.inflibnet.ac.in:8080/jspui/handle/10603/232011

• http://hdl.handle.net/10603/155862

• https://www.indiatoday.in/education-today/jobs-and-careers/story/how-to-make-a-career-in-

stock-market-1595909-2019-09-05



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Perception of Stock Market investment with reference to