UNDERSTANDING INVESTORS PSYCHE TOWARDS VARIOUS AVENUES OF INVESTMENT

Abstract

The study is conducted to understand the investment behavior of the Indian Investor to the different avenues available for investing. Every individual has different mind-set and risk taking ability which makes them unique in taking their decisions. Individual’s income, sex, age, profession and other demographics influence the investment pattern. In this study an attempt is make to find the relation between Age and the risk tolerance level of the investor, which helps in constructing the desired portfolio for the investor. Among various parameters available Age is the one which only increases with time and have a constant affect where as the other parameters are affected by the economics of the world and changes over time. They don’t show any constant relation and varies which is why it is not a good idea to use them. 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. The Present study has important implications for investment managers as it has come out with certain interesting facets of an individual investor. The individual investor always prefers to invest in financial avenues which give risk free returns. This confirms that Indian investors even if they have high income and well educated are conservative. They prefer to play safe. The investment product designers can design products which can cater to the investors need who are low risk tolerant and use TV as a marketing media.