INVESTORS BEHAVIOUR IN VARIOUS
INVESTMENT AVENUES POST COVID 19.
Tejas Bannore1 , Dr.Vinita Ahire Kale2
1Student, 2Professor
1MIT School Of Management,WPU,
Pune,Maharashtra,India.
[email protected] , [email protected]
Abstract
This research study deals with the behaviour of the investor to
identify the better investment avenues available in India after
impact of covid 19.For an investors Investment Strategy is a plan
which helps an investors to choose most suitable investment option
with minimum risk to achieve their financial goal within some time
period. Doing an Investment helps investors to increase their
individual wealth and it also helps to overall growth of economy.
The process of investments helps various companies to raise their
capital through financial market. Some types of investments
provides many benefits to the investors ,corporate as well as
society also. Indian investors are very well known about the
concept of risk and return in their investment also these investors
always follows “Prevention is better than Cure” i.e. they expect
more income with minimum risk.
Key words: Investment Strategy, Investment Portfolio, Risk and
Return.
Introduction
Investment is one of the important part of the any investors as
well as nations economic growth. With this investment in various
available option by investors acts like a driver in the growth of
the economy of that country. Indian financial scene is too presents
a too much of avenues to the investors. It is not the best or
deepest of markets in the world, it has a reasonable options for an
common man to invest his savings.
Investment benefits both economy and the society. It is an
outgrowth of economic development and the maturation of modern
capitalism.For our economy aggregate investment in the current
period is a major factor to determine aggregate demand and
employment level also. In the long term, current investment
determines the economy’s future productive capacity and,
ultimately, a growth in the standard of living.Investing in any
avenue can contribute to economic growth and prosperity and also
for increase in personal wealth. The process of investing helps to
create financial markets where companies can raise capital. It also
contributes in the greater economic growth and prosperity.
Investment in the specific type of avenues provides others benefits
tp society as well.
INVESTOR
An investor is any person or other entity such as firm who makes
an investment into one or more categories of assets-equity, debt
securities, real estate, currency, commodity, derivatives such as
put and call options, etc. with the objective of making a profit in
return.
INVESTMENT
Investment is an purchasing any good or asset or investing money
with the aim of creating wealth and with idea that will give income
in future with more profit.These investment options are available
with various risk rewards trade offs.An proper understanding of the
core concepts of investment and a thorough analysis of the
available options can help an investor create a good portfolio that
maximizes returns while minimizing risk exposure.
INVESTMENT OBJECTIVES
The main objective of investor for investment to earn profit
with minimum risk.Safety,Liquidity are the subsidiary objectives of
investors.
RETURN
Any investor want good rate of return on their investment. Rate
of return can be defined as total percentage gain on the beginning
value of the investment with ending value of investment.
RISK
Risk can be define as possibility of losing money or investment
from your total investment. The word risk is also called as
variability of return.
LIQUIDITY
Liquidity can be define as how any assest can be converted into
cash without affecting market price.
HEDGE AGAINST INFLATION
Almost all economy have inflation and they reduces the value of
investment. The rate of inflation should be less than rate of
return otherwise investors will face losses The return thus earned
should assure the safety of the principal amount, regular flow of
income and be a hedge against inflation.
SAFETY
Investors have to invest in avenue which is legel and have
regulatory framework for their safety of investment. If it is not
under the legal framework, it is difficult to represent the
grievances, if any. Approval of the law itself adds a flavour of
safety.
Various Investment options in India
:- Savings Bank Account
:- Money Market Funds (also known as liquid funds)
:- Bank Fixed Deposit (Bank FDs)
:- Post Office Savings Schemes (POSS)
:- Public Provident Fund (PPF)
:- Company Fixed Deposits (FDs)
:- Bonds and Debentures
:- Mutual Funds
:- Life Insurance Policies
:- Equity Shares
:- Gold
:- New Pension Scheme
:- Real Estate
:- Government Securities
:- Land
OBJECTIVES OF THE RESEARCH PROJECT
1.To study the various alternatives of investment which are
available in the market.
2.To study the investors preference towards the investment post
covid 19.
3.To find out how investors are motivated to invest in various
financial instruments.
4.To identify the objective of Investments post covid 19.
REVIEW OF LITERATURE
Generally every individual investors follows some principles
while investing their money i.e. proper allocation of investible
funds, some strategy to maximize return and long term approach for
investment. While applying these three principles every investors
has to deal with his investment psychology and lifestyle also.
Investors age, occupation and income plays and important role in
the choice of investment avenues. Many times investors choice
affected by the overconfidence,reference group and also by framing
of other alternatives.The knowledge of these aspects is important
to all including students ,researchers, financial consultunts etc.
. (Dr. (Mrs.) Sushant Nagpal, 2007, Psychology of Investments and
Investor’s Preferences )
In this paper researchers discusses about the basic of
investment and need for investment. Investment benefits both
economy of the country and the society also. It is an outgrowth of
economic development and the maturation of modern capitalism.For
the economy of the country aggregate investment plays an major
factor role in determining the aggregate demand and the level of
employment.In the long term current investment helps to determine
the productive capacity of the economy of the country and the
growth in the standard of living also.Investment helps investors to
increase his personal wealth and can also contribute in economic
growth and prosperity of country.(Dr.A.P.Dash, Sr.Faculty, PMI,
Basics Of investment)
According to this research paper today indian investors have to
endure a sluggish economy,insider trading,illegal corporate
accounting practices like Satyam etc.Performance in the stock
market is not always the result of intelligible characteristics but
also due to the emotions that are still baffling to the
analyst.Investors emotions like fear, overconfidence ,risk aversion
etc decisively drives the fortunes of market. (Ms.M.Kothai Nayaki
& Mrs.P.Prema, A Study on Indian Individual Investors’
Behavior.)
Investments are made with an avowed objective of maximising
wealth.If investors takes decision on available information rather
than taking on emotions it eill be help them to maximise their
return. Behaviour of investors is characterised by his excitement
and his reaction in both rising and falling stock markets.
Investments and financial theories are based on ideas that everyone
takes care before taking any investment decision.This research is
conducted to analyse the factors influencing the behaviour of
investors in capital market. Empirical evidence suggests that
demographic factors influence the investors' investment decisions.
How investor acts on various capital market information and
interprets to make informed investment decisions, is also
investigated by this research article. (V. Shanmugasundaram and V.
Balakrishnan, 2011, Investment decision-making – A Behavioural
Approach).
According to this research article safety of principal amount,
liquidity, income stability, appreciation and easy transferability
are major features of an investment. Shares, bank, companies, gold
and silver, real estate, life insurance, postal savings and so on
are the variety of investment avenues are available . In the above
mentioned avenues all the investors invest their surplus money
based on their risk taking attitude. ( Sonali Patil, Dr.Kalpana
Nandawar ,2014 - A Study on Preferred Investment Avenues Among
Salaried People With Reference To Pune, India)
The researcher of this paper concluded that Investors are very
well aware about investment avenues that are available in Pune,
India but still bank deposite and real estate are the prefferd
options of investors of investing money. The data analysis of
research reveals that while doing investment the safety is
concerned as important factor, so that’s why other available
avenues are less considerable while doing investment by
investors.
Real estate is always on the high or up Especially in a city
like Pune this is not at all bad investment option , But the risk
and amount of investment is high and there is no fixed return.
It is absolutely essential and needed to save what you earn, to
have a plan for your own future, and to resist the spending funds
that you do not already have. ( Prof. Sanket L.Charkha &Dr.
Jagdeesh R. Lanjekar - A Study Of Saving And Investment Pattern of
Salaried Class People with Special Reference To Pune City
(India))
RESEARCH METHODOLOGY
RESEARCH DESIGN:
Simple framework of plan for a study that guides the collection
and analysis of data called as Research Design. This study has
intension to find the investors preference towards various
investment avenues. The study design is Descriptive in nature.
A fact-finding investigation with adequate interpretation called
Descriptive Research . It is the simplest type of research and is
more specific. Mainly designed to gather descriptive information
and provides information and provides information for formulating
more sophisticated studies.
SAMPLING DESIGN:
Selection of the sample size: 98
SAMPLING METHODS
Convenience method of sampling is used to collect the data from
the respondents. Researchers or field workers have the freedom to
choose whomever they find, that’s why it is “convenience”.
DATA COLLECTION
Primary data – collected through Structured Questionnaire.
Secondary data – Earlier records from journals, magazines and
other sources.
STATISTICAL TOOLS USED FOR ANALYSIS
Percentage Analysis
T Test
Pie Chart
Bar Chart
Limitation Of the Study
The information can be biased due to use of questionnaire.
The Researcher can concentrate only in Indian Investors.
DATA ANALYSIS AND INTREPRETATION
Age Wise Classification
Age
No of Respondent
Percentage
20 – 40 years
92
93.9%
40 – 60 Years
06
6.1%
Inference:-
The above analysis shows that 92 respondent are from the age
group 20 – 40 years which is equal to 93.9% of total respondent and
remaining 6 respondent i.e. 06.1% of total respondent are from 40 –
60 years age group.
Occupation wise classification:-
Occupation
No of Respondent
Percentage
Student
67
68.3%
Salaried
27
27.6%
Businessman/women
3
3.1%
Home-Maker
1
1%
Inference:-
The above analysis shows that 67 respondent out of 98 are from
student background which is equal to 68.3% also 27 respondent are
salaried ,3 are from business background and 1 is home maker which
are 27.6%,3.1% and approx. 1% respectively of total respondent.
Income wise classification:-
Monthly income
No of Respondent
Percentage
0 – 2.5 lac
76
77.5%
2.5 – 5 lac
12
12.2%
5 – 10 lac
7
7.1%
10 lac and above
3
3.1%
Inference:-
The above analysis shows that 77.5% respondent which are 77 of
total 98 respondent have up to 2.5 lac income and the respondent
who have 2.5 – 5 lac,5 – 10 lac and 10 lac and above income are 12,
7 and 3 respectively which are equal to 12.2%,7.1% and 3.1%
respectively of total respondent.
Liquidating cash amid this crisis wise classification
Want to liquidate cash
No of Respondent
Percentage
Yes
51
52.6%
No
46
47.4%
Inference:-
The above analysis shows that 52.6% respondent want to liquidate
their cash amid this crisis which is equal to 51 respondent and 46
respondent don’t want to liquidate their cash amid this crisis
which is equal to 47.4%.
Frequently investment wise classification
How Frequently
No of Respondent
Percentage
Daily
6
6.7%
Weekly
13
14.4%
Monthly
30
33.3%
Quarterly
22
24.4%
Yearly
19
21.1%
Inference:-
The above analysis shows that 6 respondent invests daily out of
90 respondent which is equal to 6.7% likewise 13,30,22 and 19
respondent invests weekly,monthly,quarterly and yearly respectively
out of 90 respondent which is equal to 14.4%,33.3%,24.4% and 21.1%
respectively.
Awareness level wise classification
Level of awareness
No of respondent
Percentage
High
10
10.6%
Medium
18
19.1%
Low
66
70.2%
Inference:-
The above analysis shows that 10 respondent out of 94 have high
level of awareness about investment schemes which is equal to 10.6%
likewise 18 and 66 respondent have medium and low level of
awareness respectively which is 19.1% and 70.2% respectively of
totat respondent.
Preferance of investment wise classification
Preferance
No of respondent
Percentage
Saving bank account
45
45.9%
Money market fund
4
4.1%
Bank FD’s
45
45.9%
POSS
16
16.3%
PPF
14
14.3%
Company FD’s
8
8.2%
Bonds and debentures
2
2%
Mutual Funds
31
31.6%
Life Insurance policies
18
18.4%
Equity Shares
31
31.6%
Gold
43
43.9%
New Pension Schemes
3
3.1%
Real Estate
29
29.6%
Government Securities
5
5.1%
Crypto-currency
1
1%
Land
1
1%
Inference:-
The above analysis shows that respondents preference is more
towards saving bank account and bank fd’s rather than any other
preference which is equal to 45.9% of total respondent afterwords
respondent prefers gold , equity shares and real estate as a
investment option 43.9%,31.6% and 29.6% respectively of total
respondent. 18.4%,16.3%,14.3%,8.2%,5.1%,3.1%,4.1%,2%,1% and 1%
respondent of total respondent chooses Life insurance policies,Post
office saving schemes, PPF, Company FD’s, Government securities,
Money market funds,New Pension Scemes,Bonds and debentures,Crypto-
currency and land respectively.
Risk Wise Analysis
Preferance
Not Risky
Less Risky
Intermediate
High Risky
Very High Risky
Saving Bank Account
53
34
8
-
-
Money market fund
4
47
33
9
2
Bank FD’s
45
36
14
-
-
POSS
42
37
16
-
-
PPF
30
40
22
2
2
Company FD’s
13
43
33
4
2
Bonds and debentures
4
45
35
10
1
Mutual Funds
5
29
36
17
8
Life Insurance Policies
20
42
28
05
-
Equity Shares
4
31
32
14
14
Gold
23
39
28
3
2
New Pension Schemes
16
45
33
1
-
Real Estate
14
36
25
13
07
Government Securities
27
42
22
3
1
Crypto Currency
27
8
62
-
-
Land
57
20
15
-
-
Inference:-
Above analysis shows that, respondent thinks that saving bank
account , Bank FD’s ,Post Office Schemes, PPF,land these are
investment are not risky ,money market fund, bonds and
debentures,life insurance policies,new pension schemes real estate
and government securities are less risky investment options also
otherside equity share,mutual funds and cryptocurrency has
intermediate level of risk than any other investment options.
Objectives of savings wise analysis
Education
Vacation
Future Plans
Others(Business,emergency,life style,etc.)
20
17
21
46
Inference:-
Above analysis shows that most of the respondents objectives of
savings is for completing their luxury wishes, for business purpose
for emergency purpose followed by future plans which includes built
a house ,buying car etc and then for education and for vacation are
also the reasons behind savings.
Impact of covid 19 on Income wise analysis
Preferance
No of Respondent
Percentage
Yes
64
65.3%
No
34
34.7%
Inference
Above analysis shows that 64 respondents income is impacted by
covid 19 out of 98 which is equal to 65.4% and remaining
respondents imcome is not impacted by covid 19.
How your Income Impacted by covid 19 wise analysis
Preferance
No of Respondents
Percentage
Pay Cut
40
40.8%
Lost My Job
15
15.3%
Expenses Increases
33
33.7%
Financial Situation Improved
18
18.4%
Stopped Investing
23
23.5%
Withdraw their Investment
09
9.2%
Inference
Above analysis shows that 40.8% respondent facing pay cut due to
covid 19 which are equal to 40 out of 98 respondent and 15.3%
respondent lost their job due to covid 19.33.7% respondent said
that their expenses increases due to covid 19 ,23.5% respondent
stopped investing their money in various available avenues and 9.2%
respondent withdraw their investment from market.
Uses of money in this pandemic wise analysis
Preferances
No of respondents
Percentage
For paying rent and utility bills
40
40.8%
To pay debts
26
26.5%
Putting in sefty net funds
16
16.3%
Put towards investment
16
16.3%
Inference
Above analysis shows that 40 respondent out of 98 which is equal
to 40.8% are used their money for paying rent and other utility
bills followed by 26.5% respondent to pay debts. 16.3% respondent
which is equal to 16 respondent out of 98 used their money for
putting in sefty net funds and same number of respondent used their
money for putting towards investment.
Taken out money during this pandemic wise analysis
Preferances
No of respondents
Percentage
Yes
59
60.2%
No
39
39.8%
Inference
Above analysis shows that 60.2% respondent which is equal to 59
out of 98 taken out their money from market in the last few months
of this covid 19 pandemic and 39.8% respondent didn’t take out
their money from market.
Reinvestment plan wise analysis
Preferances
No of Respondents
Percentage
After getting financially secure again
23
34.8%
After market correction
10
15.2%
Have no plans to reinvest
15
22.7%
Unsure
18
27.3%
Inferance
Above analysis shows that 23 respondent have plan of
reinvestment after getting financially secure again which is equal
to 34.8% while 15.2% have plan of investment only after market gets
corrected. 22.7% respondent have no any plan of reinvestment and
27,3% respondents are unsure about their future plan of
investment.
T Test
The Relationship between income and investment
Hypothesis:-
Null Hypothesis H0:- There is relationship between income and
investment.
Null Hypothesis H1:- There is no relationship between income and
investment.
Group 1 (Income)
Group 2 (Investment)
Data
76,12,7,3,0
6,13,30,22,19
Mean
19.6
18.0
SEM
14.24
4.06
SD (n)
28.48
8.12
SD(n-1)
31.84
9.08
N
5
5
P value
0.9184
0.0322
Result :-
As the T Test value of investment is less than significant value
(0.0322 < 0.05) and T Test value of income is greater than
significant value (0.9184>0.05) , We accepet the null hypothesis
H0 i.e. there is relationship between income and investment and
reject the alternative hypothesis H1.
Signifanct level at 5%.
Therefore we conclude that there is relationship between income
and investment.
Findings
1. Most of the respondent want to liquidate there cash amid this
crisis.
2. There is relationship between Income and Investment.
3. Most of the respondent prefers monthly investment (33.3%)
than daily, weekly, quarterly and yearly.
4. Mostly investors have not much aware about investment schemes
that is more than 70%.
5. Most of the investors choose Saving Account and Bank FD’s as
an investment option followed by Mutual Funds and Equity Shares
than any other options.
6.Most of the investors things that Saving Account, Bank FD’s
are not risky options for investment schemes followed by POSS and
Pension Schemes than any other investment options.
7.Most of the investors main objective of investing money is for
completing their future wishes like buying car, buld an house etc
followed by for education and vacation purpose also.
8.Investors investment depends upon their annual income.
9. 65.3% respondents Income impacted by covid 19.
10. 40.8% employee facing pay cut due to covid 19,15.3% lost
their job due to this pandemic and 33.7 % respondent said that
their expenses increases due to this covid 19 pandemic.
11. Many peoples taken out their money from market due to this
covid 19 pandemic which is approximately equal to 60%.
12. 34.8% respondent have plan to reinvest their money after
getting financially secure again and 22.7% have no plan of
reinvestment.
Suggetions
1. Investors should make investment keeping their objectives of
investment in mind .
2. Investors may contact investment related broker or agents but
their decision should depends upon their own investigations.
3. Investors should select investment option depends upon their
need and future planning with proper risk.
4. Investors should have to monitors their investment
regularly.
5. Investors also can choose option of diversifying their
investment to reducing risk.
6. Brokers,agents ,companies should have to provide proper
information to the investors regarding their investment.
Conclusion
This research confirms that there is relationship between income
and investment.Investors wants maximum return with minimum
risk.Individual investors prefers to invest in availoable option
which is resk free.Investors thinks that land and gold are two
ideal options of investment.They gives good return and
appreciation.Even high income background investors prefers safer
investment.Investment platform companies or agents should have to
come with safer platform with minimum risk for investment to
attrack investors.
Bibiliography
Research Paper Refered:-
1. Prof. Sanket L.Charkha &Dr. Jagdeesh R. Lanjekar - A
Study Of Saving And Investment Pattern of Salaried Class People
with Special Reference To Pune City (India).
2. Sonali Patil, Dr.Kalpana Nandawar ,2014 - A Study on
Preferred Investment Avenues Among Salaried People With Reference
To Pune, India.
3. V. Shanmugasundaram and V. Balakrishnan, 2011, Investment
decision-making – A Behavioural Approach
4. Dr.A.P.Dash, Sr.Faculty, PMI, Basics Of investment
5. Dr. (Mrs.) Sushant Nagpal, 2007, Psychology of Investments
and Investor’s Preferences.
6. Ms.M.Kothai Nayaki & Mrs.P.Prema, A Study on Indian
Individual Investors’ Behavior.
7. Dr.S.Suriya Murithi ,B.Narayanan & M.Arivazhagan,
Investors behaviour in various Investment Avenues – a study.
Websites:-
www.google.com
www.investopedia.com
www.investing.com
www.moneymanagementideas.com
www.savingwala.com
www.indiamoney.com
Age
no of respondents
20-40 year40-60 years926Percentage
20-40 year40-60
years0.938999999999999956.0999999999999999E-2
Occupation
No of Respondents
StudentSalariedBusinessman/womenHome-Maker672731PercentageStudentSalariedBusinessman/womenHome-Maker0.683000000000000050.276000000000000023.1E-20.01
Income
No of Respondent
0 – 2.5 lac2.5 – 5 lac5 – 10 lac10 lac and
above761273Percentage
0 – 2.5 lac2.5 – 5 lac5 – 10 lac10 lac and
above0.775000000000000020.1227.0999999999999994E-23.1E-2
Want to Liquidate your cash amid this crisis?
No of Respondent
YesNo5146Percentage
YesNo0.526000000000000020.47399999999999998
Frequently Investment
No of Respondent
DailyWeeklyMonthlyQuarterlyYearly613302219Percentage
DailyWeeklyMonthlyQuarterlyYearly6.7000000000000004E-20.143999999999999990.333000000000000020.243999999999999990.21099999999999999
Awareness Level
No of respondent
HighMediumLow101866Percentage
HighMediumLow0.1060.1910.70199999999999996
Preferance of Investment
No of respondentSaving bank accountMoney market fundBank
FD’sPOSSPPFCompany FD’sBonds and debenturesMutual FundsLife
Insurance policiesEquity SharesGoldNew Pension SchemesReal
EstateGovernment
SecuritiesCrypto-currencyLand4544516148231183143329511
Not RiskySaving Bank AccountMoney market fundBank
FD’sPOSSPPFCompany FD’sBonds and debenturesMutual Funds Life
Insurance PoliciesEquity SharesGoldNew Pension SchemesReal
EstateGovernment SecuritiesCrypto
CurrencyLand5344542301345204231614272757Less RiskySaving Bank
AccountMoney market fundBank FD’sPOSSPPFCompany FD’sBonds and
debenturesMutual Funds Life Insurance PoliciesEquity SharesGoldNew
Pension SchemesReal EstateGovernment SecuritiesCrypto
CurrencyLand3447363740434529423139453642820IntermediateSaving Bank
AccountMoney market fundBank FD’sPOSSPPFCompany FD’sBonds and
debenturesMutual Funds Life Insurance PoliciesEquity SharesGoldNew
Pension SchemesReal EstateGovernment SecuritiesCrypto
CurrencyLand8331416223335362832283325226215High RiskySaving Bank
AccountMoney market fundBank FD’sPOSSPPFCompany FD’sBonds and
debenturesMutual Funds Life Insurance PoliciesEquity SharesGoldNew
Pension SchemesReal EstateGovernment SecuritiesCrypto
CurrencyLand09002410175143113300Very High RiskySaving Bank
AccountMoney market fundBank FD’sPOSSPPFCompany FD’sBonds and
debenturesMutual Funds Life Insurance PoliciesEquity SharesGoldNew
Pension SchemesReal EstateGovernment SecuritiesCrypto
CurrencyLand02002218014207100
Objectives of Savings
EducationVacationFuture PlansOthers(Business,emergency,life
style,etc.)20172146
Impact of Covid 19 on Income
No of Respondent
YesNo6434
How your Income Impacted by covid 19
No of Respondents
Pay CutLost My JobExpenses IncreasesFinancial Situation
ImprovedStopped InvestingWithdraw their Investment40153318239
How you use money in this pandemic?
No of respondents
For paying rent and utility billsTo pay debtsPutting in sefty
net fundsPut towards investment40261616
Taken out money From Market
No of respondents
YesNo5939
Reinvestment Plan
No of Respondents
After getting financially secure againAfter market
correctionHave no plans to reinvestUnsure23101518
20
