1.1 Introduction To The Report: Chapter-1

CHAPTER-1
INTRODUCTION
1.1
INTRODUCTION TO THE REPORT
Savings form an important part of the economy of any nation. With the
savings invested in various options available to the people, the money acts as
the driver for growth of the country. Indian financial scene too presents a
plethora of avenues to the investors. Though certainly not the best or deepest
of markets in the world, it has reasonable options for an ordinary man to
invest his savings.
One needs to invest and earn return 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. One of the important reasons why one needs to invest wisely
is to meet the cost of inflation. Inflation is the rate at which the cost of living
increases. The cost of living is simply what it cost to buy the goods and
services you need to live.
Inflation causes money to lose value because it will not buy the same amount
of a good or service in the future as it does now or did in the past. The sooner
one starts investing the better. By investing early you allow your investments
more time to grow, whereby the concept of compounding increases your
income, by accumulating the principal and the interest or dividend earned on
it, year after year.
The three golden rules for all investors are:
Invest early.
Invest regularly.
Invest for long term and not for short term.
1.2
OBJECTIVE OF THE STUDY
The purpose of the analysis is to determine the investment behaviour of
investors and investment preferences for the same. Investors perception will
provide a way to accurately measure how the investors think about the
products and services provided by the company.
Today is trying economic conditions have forced difficult decisions for
companies. Most are making conservative decisions that reflect a survival
mode in the business operations. During these difficult times, understanding
what investors on an ongoing basis is critical for survival.
Executives need a third party understanding on where investor s
loyalties stand. More than ever management needs ongoing feedback from
the investors, partners and employees in order to continue to innovate and
grow.
The main objective of the project is to find out the needs of the current
and future investors.
For this analysis, customer perception and awareness level will be
measured in important
areas such as:
1. To understand in depth about different investment avenues available in

India.
2. To find out how investors get information about the various financial
instruments.
3. The type of financial instruments, they would prefer to invest.
4. The duration for which they would prefer to keep their money invested.
5. What are the factors that they consider before investing?
6. To give a recommendations to the investors that where they should
invest.
7. To know the risk tolerance level of the individual investor and suggest a
suitable portfolio.
8. To develop a profile of sample Indian individual investor in terms of
their demographics. And demographics based on occupation of the
sample investor.
9. To identify the objective of savings of an investor.
10. Tostudy the dependence/independences of the demographic factors
(Age) of the investor and his/her risk tolerance level.
Plan of the study

Chapter 1 covers the core areas of the report: The introduction, objectives,
need, limitations and research methodology of the study. It also covers value
addition and sources of information.
Chapter 2 covers the literature review given by various behavioural scientists

and investment experts.
Chapter 3 covers the industry profile, which is a brief explanation of the

financial industry, governing bodies and various investment avenues.
Chapter 4 covers data analysis and interpretation part. Analysis is made from
the data obtained through questionnaires.
Chapter 5 covers the findings and suggestions drawn from the data analysis
and interpretations.
Chapter 6 covers the summary and conclusion of the report.
1.3
NEED FOR THE STUDY
Stock market has been subjected to speculations and inefficiencies, which are
beached to the rationality of the investor. Traditional finance theory is based
on the two assumptions.
Firstly, investors make rational decisions; and secondly investors are unbiased
in their predictions about future returns of the stock. However financial
economist have now realized that the long held assumptions of traditional
finance theory are wrong and found that investors can be rrational and make
predictable errors about the return on investment on their investments. This
analysis on Individual Investors Behaviour is an attempt to know the profile
of the investor and also know the characteristics of the investors so as to know
their preference with respect to their investments. The study also tries to
unravel the influence of demographic factors like age on risk tolerance level
of the investor.
1.4
VALUE ADDITION
This analysis will he lp to strengthen investor intimacy. This analysis will
also throw light
on various investment avenues available in India that will he lp in
many ways like. The
expectations of differe nt types of investors regarding particular se rvice
requirements can be
identified.
The common problem areas faced by the investors can be understood.
y
It also enhances new services initiatives.
y
This study will help in gaining a better understanding of what an investor
looks for in an
y
investment option.
It can be used by the financial sector in designing better financial instrument
customized
y
to suit the needs of the investor.
It will also help the agents and brokers in marketing the existing financial
instruments.
y
It will provide knowledge to the investors about the various financial
services provided
y
by the company to their investors.
It will also help the company to understand what is the requirement and
expectations of
y
different categories of investors.
This analysis will be originated in order to empower the investors with
detailed research
on various investments avenues available in India. The awareness lever of
the investors about
the various investment options and what is the perception of the
investors with regard to the
investments they want to make.
6
1.5
LIMITATIONS OF THE STUDY
This analysis is based upon investors behaviour for investment
preferences during
normal time vis-à-vis recessionary period. This analysis would be
focusing on the information
from the investors about their knowledge, perception and behaviour on
different financial
products.
The various limitations of the study are:
The total number of financial instruments in the market is so large that it
needs a lot of
y
resources to analyze them all. There are various companies providing
these financial
instruments to the public. Handling and analyzing such a varied and
diversified data
needs a lot of time and resources.
As the analysis is based on primary as well as secondary data, possibility of
unauthorized
y
information cannot be avoided.
Reluctance of the people to provide complete information about them
can affect the
y
validity of the responses.
The lack of knowle dge of customers about the financial instruments
can be a major
y
limitation.
The information can be biased due to use of questionnaire.
y
7
1.6
RESEARCH METHODOLOGY
Sampling technique
Initially, a rough draft will be prepared keeping in mind the objective of the
research. A
pilot study will be undertaken in order to know the accuracy of the
questionnaire. The final
questionnaire will be arrived at only after certain important changes are
incorporated.
Convenience sampling technique will be used for collecting the data
from different investors.
The investors are selected by the convenience sampling method. The
selection of units from
the population based on their easy availability and accessibility to the
researcher is known as
convenience sampling. Convenience sampling is at its best in surveys
dealing with an
exploratory purpose for generating ideas and hypothesis.
Sampling unit:
The respondents who will be asked to fill out the questionnaires are the
sampling units.
These comprise of employees of MNC s, government employees, house
wives, self employed,
professionals and other investors.
Sampling size:
The sample size will be restricted to only 100, which comprised of
mainly people from
different regions of Hyderabad due to time constraints.
Sampling area:
The area of the research is Hyderabad.
8

1.1 Introduction To The Report: Chapter-1

Uploaded by

Copyright:

Available Formats

1.1 Introduction To The Report: Chapter-1

Uploaded by

Document Information

Original Title

Copyright

Available Formats

Share this document

Share or Embed Document

Sharing Options

Did you find this document useful?

Is this content inappropriate?

Copyright:

Available Formats

1.1 Introduction To The Report: Chapter-1

Uploaded by

Copyright:

Available Formats

CHAPTER-1

The three golden rules for all investors are:

1. To understand in depth about different investment avenues available in

Plan of the study

Chapter 2 covers the literature review given by various behavioural scientists

Chapter 3 covers the industry profile, which is a brief explanation of the

Chapter 6 covers the summary and conclusion of the report.

You might also like