1. A
STUDY ON
ATTITUDE OF RETAIL INVESTOR TOWARDS INVESTMENT
AND DIVERSE INVESTMENT STRATAGIES
IN
BONANZA PORTFOLIO LTD
SUBMITTED BY: GUIDANCE BY
DHIMANT PATEL NETRA AKOLKAR
ROLL NO. 83 (LECTURER)
SWAMI SAHAJANAND COLLEGE OF COMMERCE AND MANAGEMENT,
BHAVNAGAR UNIVERSITY,
BHAVNAGAR
BATCH-2007-10
7
2. A
STUDY ON
ATTITUDE OF RETAIL INVESTOR TOWARDS INVESTMENT AND
DIVERSE INVESTMENT STRATAGIES
IN
BONANZA PORTFOLIO LTD
A PROJECT REPORT SUBMITTED IN PARTIAL FULFILLMENT
FOR THE THE DEGREE OF
BACHELORE OF BUSINESS ADMINISTRATION
TO
BHAVNAGAR UNIVERSITY, BHAVNAGAR
SUBMITTED BY: GUIDANCE BY
DHIMANT PATEL NETRA AKOLKAR
ROLL NO. 83 (LECTURER)
SWAMI SAHAJANAND COLLEGE OF COMMERCE AND MANAGEMENT,
BHAVNAGAR UNIVERSITY,
BHAVNAGAR
BATCH-2007-10
7
3. DECLARATION
I, DHIMANT PATEL, student of SWAMI SAHJANAND COLLEGE OF COMMRCE AND
MANAGEMENT hereby declare that I have completed this project on ATTITUDE OF
RETAIL INVESTOR TOWARDS INVESTMENT AND DIVERSE INVESTMENT
STRATAGIES and the information submitted is true and original to the best of
knowledge.
Signature of student
DHIMANT D. PATEL
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4. ACKNOWLEDGEMENT
The most pleasant part of any project is to express gratitude and bestow honor
towards all those who directly or indirectly contributed to the smooth flow of the
project work and this being the good opportunity; I don’t want to miss it.
I would like to thank my Faculty. NETRA MAM for his valuable inputs in
the research and spending so much of valuable time and effort in helping with
my topic.
I also wish to express sincere gratitude to all the respondents of the project
without the kind of co-operation of whom this work would not have been possible.
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5. PREFACE
Bachelor of business administration is a unique course, which aims at
developing human recourse assuming responsibility as manager and executives at
senior levels of management in business under-takings.
Final project at this year curriculum is a step to bridge up the gap between
the practical applications. A person aspiring to enter in management profession must
have practical knowledge of the speculated subject.
BONANZA SHARES AND FINANCE LIMITED is an organization engaged
in providing the financial services in a retail market. I have a great pleasure in presenting
the report of such organization. I have a closer look view of practical aspects. I need to
undergo 15 days for project studies.
Theoretical knowledge together with a blend of practical knowledge is
provided to us in B.B.A. I am glad to present my report on practical training. At the same
time I have also express that, “PROJECT TRANING” with research is a great opportunity
which has provided me great satisfaction when I had a chance to do something to the
practical, is view to fundamental aspects of theory. All these could not have been
achieved without sound practical approach.
CONTENTS
Sr no Contents Page no
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6. INTRODUCTION ABOUT COMPANY
1 BONANZA’S COMPANY PROFILE 09
2 HISTORY OF BONANZA 10
3 MISION 11
4 MEMBERSHIP 12
5 BONANZA’S ACHIEVEMENT 13
6 OFFERING AN ARRAY OF FINANCIAL 14
SERVICES
7 PROGRESSIVE FINANCIAL PLANNING 15
TOPIC DESCRIPTION
8 INRODUCTION 17
9 BEHAVIOUR OF HOUSEHOLD 18
10 INVESTMENT 19
11 RETAIL INVESTOR 22
12 INVESTOR STRETEGY 23
13 TYPES OF INVESTMENT 24
14 FEACTURE OF DIFFERENT TYPE OF 25
INVESTMENT
RESEARCH METHODOLOGY
15 INTRODUCTION OF RESEARCH 38
16 OBJECTIVE RESEARCH 40
17 PROCESS OF RESEARCH 42
18 TYPES OF RESEARCH 44
19 RESEARCH DESIGN 46
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7. DATA ANALYSIS AND INTREPRTATION 47
FINDINGS 63
RECOMMANDATION 64
CONCLUSION 65
BIBLIOGRAPHY 66
APPENDIX 67
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9. BONANZA’S COMPANY PROFILE
NAME OF THE COMPANY : Bonanza Portfolio Ltd
ADDRESS OF THE COMPANY : 5, Trade Center,
Second floor,
Kalanala, Bhavnagar - 364001
Tel No: - 0278 3004381
FORM OF ORGANIZATION : Pvt Ltd
HEAD OFFICE : 2/2 – A, First Floor, Lakshmi Insurance
Building, Asaf Ali Road,
New Delhi - 110002
Tel No: - + 91-11-30181291 to 94
ESTABLISHMENT YEAR : 1944
TYPE OF DEALINGS : Shares, Commodity, Depository
MAIN DEALING IN : Demat A/C
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10. History of Bonanza
Bonanza an leading financial services and brokerages house working
diligently since1994 can be described in a single word as a “financial
powerhouse” with acknowledged industry leadership in execution and
clearing services on exchange traded derivatives and cash market
products. Bonanza has spread its wings all over India more than 1050
outlets across 350 cities.
Being ranked as one of the top brokerage house in India, bonanza
provides an extensive line of brokerage services in equity, commodities,
derivatives, wealth management, distribution of third party products and
more. Bonanza has adopted an integrated and innovative use of
technology, to ensure maximum outputs in a minimum time –frame.
Bonanza is a leading financial services and brokerages house. With
more than 150000 clients comprising of financial institute & Investors,
Corporate, Mutual funds, High net worth individual and retail investors
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11. Mission
Our core Mission is clients’ wealth generation through professional advice backed
by through research and in –depth analysis, we offer a singe point access to the vast
word of a financial finance services. Our strength includes a diverse products range,
state –of-art technology & vast network across India.
Bonanza has wide reach through its branches /offices in more than 750 locations
spread over 300 cities. Our consistent endeavor is to provide strategic advice and high
quality services to clients.
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12. Membership
• National stock exchanges of India ltd.
• The stock exchange , Mumbai(BSE)
• National commodities & depravities exchange (MCX)
• National Multi commodities exchange (NMCE)
• Depository participant foe equity (NSDL/CDSL)
• Depository participant for commodities
• Dubai god & commodities exchange (DGCX)
• SEBI authorized PMS
• Registered distributor with (AMFI)
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13. Bonanza’s achievements
• Top equity broking house in term of branch expansion -2008*
• 3rd in terms of number of trading accounts-2008*
• 6th term of trading terminals in for consecutives years 2007 and 2008*
• 9th in terms of sub brokers-2007*
• Awarded by BSE “major volumes driver 04-05. 06-07, 07-08”
• Nominated among top 3 for “best financial advisors awards 08”in the category of
national distributors – retails instituted by CNBC-TV18 and Optimix
• India ‘s 5th largest broking firm in term of no. of offices*
• Hallmark of over 200000 clients (including HNL, corp.& FllS)
Bonanza has been forerunner in dealing of any new financial products and have
launched trading facilities on the currency derivatives segments for its clients, at all the
exchanges namely NSE, BSE & MCX-SX.
Offering an array of financial services and products
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15. Financial planning
Save Invest Protect
Save: Savings & Deposits to meet short term cash requirements for you.
Invest: Medium to long term investment which provides income & capita growth
Protect: Insurances that provides protection to your life.
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17. INRODUCTION
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.
Investment benefits both economy and the society. It is an outgrowth of economic
development and the maturation of modern capitalism. For the economy as a whole,
aggregate investment sanctioned in the current period is a major factor in determining
aggregate demand and, hence, the level of employment. In the long term, current
investment determines the economy’s future productive capacity and, ultimately, a
growth in the standard of living. By increasing personal wealth, investing can
contribute to higher overall economic growth and prosperity. The process of investing
helps to create financial markets where companies can raise capital. This too,
contributes to greater economic growth and prosperity. Specific types of investments
provide other benefits to society as well.
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18. BEHAVIOR OF HOUSEHOLD SAVINGS IN INDIA
Household savings in general and savings in the form of financial assets in
particular exhibited remarkable growth since late eighties. The aggregate
household savings as share to GDP, which was only 1.5 per cent during 1970-71,
went up to 4.9 per cent in 1980-81. It went up sharply to 14.2 per cent in 1990-91
and further to 19.7 per cent in 1994-95 before coming down marginally to 18.5 per
cent in 1998-99. The growth of household savings during the decade of eighties
has been facilitated by a simultaneous increase in physical as well as financial
assets. While household savings in physical assets increased from 3 per cent of
GDP in 1980-81 to 7.8 per cent in 1990-91, savings in the form of financial assets
increased from 2 per cent to 6.4 per cent for the corresponding period. Financial
savings during first half of the nineties registered remarkable growth from 6.4 per
cent of GDP in 1990-9 1 to 11.9 per cent in 1994-95. However, the share of
financial savings to GDP fluctuated since 1995-96.
The Indian financial sector is on a roll. Driven by a strong investor interest and
an expanding market, the industry is also becoming more vibrant, with new types of
products and services being offered to meet the needs of the booming economy.
The buoyancy in the economy is estimated to lead to a four-fold increase in
India's investable wealth from US$ 250 billion in 2007 to US$ 1 trillion by 2012.
Clearly, there is huge potential in this segment. Significantly, wealth management
revenues are expected to account for 32-37 per cent of the total full-service
financial institutions by 2012. The market is also expected to undergo a structural
transformation with organized players increasing their market share. The
attractiveness of India in the global financial market is also reflected in the Indian
cities - Mumbai, New Delhi and Bangalore - finding a place of pride in the list of
the world's top 75 commercial centres, as per the 2008 'Mastercard Worldwide
Centres of Commerce Index
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19. INVESTMENTS
The dictionary meaning of investment is to commit money in order to earn a
financial return or to make use of the money for future benefits or advantages.
People commit money to investments with an expectation to increase their future
wealth by investing money to spend in future years. For example, if you invest Rs.
1000 today and earn 10 %over the next year, you will have Rs.1100 one year from
today.
An investment can be described as perfect if it satisfies all the needs of all investors.
So, the starting point in searching for the perfect investment would be to examine
investor needs. If all those needs are met by the investment, then that investment
can be termed the perfect investment. Most investors and advisors spend a great
deal of time understanding the merits of the thousands of investments available in
India. Little time, however, is spent understanding the needs of the investor and
ensuring that the most appropriate investments are selected for him.
THE INVESTMENT NEED OF AN INVESTOR
By and large, most investors have nine common needs from their investments:
1. Security of Original Capital
2. Wealth Accumulation
3. Comfort Factor
4. Tax Efficiency
5. Life Cover
6. Income
7. Simplicity
8. Ease of Withdrawal
9. Communication
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20. Security of original capital: The chance of losing some capital has been a primary need.
This is perhaps the strongest need among investors in India, who have suffered regularly
due to failures of the financial system.
Wealth accumulation: This is largely a factor of investment performance, including both
short-term performance of an investment and long-term performance of a portfolio.
Wealth accumulation is the ultimate measure of the success of an investment decision.
Comfort factor: This refers to the peace of mind associated with an investment.
Avoiding discomfort is probably a greater need than receiving comfort. Reputation plays
an important part in delivering the comfort factor.
Tax efficiency: Legitimate reduction in the amount of tax payable is an important part
of the Indian psyche. Every rupee saved in taxes goes towards wealth accumulation.
Life Cover: Many investors look for investments that offer good return with adequate
life cover to manage the situations in case of any eventualities.
Income: This refers to money distributed at intervals by an investment, which are
usually used by the investor for meeting regular expenses. Income needs tend to be
fairly constant because they are related to lifestyle and are well understood by investors.
Simplicity: Investment instruments are complex, but investors need to understand
what is being done with their money. A planner should also deliver simplicity to
investors.
Ease of withdrawal: This refers to the ability to invest long term but withdraw funds
when desired. This is strongly linked to a sense of ownership. It is normally
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21. triggered by a need to spend capital, change investments or cater to changes in
other needs. Access to a long-term investment at short notice can only be had at a
substantial cost.
Communication: This refers to informing and educating investors about the purpose
and progress of their Investments. Need of communication increases when investments
are threatened.
Security of original capital is more important when performance falls.
Performance is more important when investments are performing well.
Failures engender a desire for an increase in the comfort factor.
Perfect investment would have been achieved if all the above-mentioned needs had
been met to satisfaction. But there is always a trade-off involved in making investments.
As long as the investment strategy matches the needs of investor according to the
priority assigned to them, he should be happy.
The Ideal Investment strategy should be a customized one for each investor depending on
his risk-return profile, his satisfaction level, his income, and his expectations. Accurate
planning gives accurate results. And for that there must be an efficient and trustworthy
roadmap to achieve the ultimate goal of wealth maximization.
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22. Retail Investor
An individual who purchases securities for their own personal account rather than for an
organization. Retail investors typically trade in much smaller amounts than institutional
investors such as mutual funds, pensions, or university endowments.
How It Works/Example:
Retail investing generally occurs through four channels: individual
investors, retail brokers (who act at the direction of these individuals), managed
accounts (whereby the account manager makes the buy and sell decisions for the
individual), and investment clubs (groups of people who pool their money to make
investments). According to the Investment Company Institute and the Securities Industry
Association, over 50 million U.S. households engage in some type of retail investing.
Why It Matters:
Retail investing activity pales in the shadow of institutional investing activity. Not only do
retail investors make smaller trades, they also tend to trade less frequently than
institutional investors, which account for most of the market's trading volume. However,
the widening use of online trading and better access to financial information has
increased the number of retail investors in recent years.
Retail investors typically exert less influence over corporate decisions than larger,
institutional shareholders. Although there is some controversy over whether a high level
of institutional ownership improves a company's management, there is no disputing the
fact that an institutional shareholder with 10,000 votes usually wields more influence
than an average retail shareholder with just 100 votes.
As opposed to institutional owners, small investors seldom have access to corporate
boardrooms or discussions and rarely have the opportunity to meet personally with a
company's executives. For this reason, many retail investors tend to regard institutional
ownership of a security as a sign of approval and are easily influenced by institutional
trading activity.
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23. Investment Strategy
A well-planned investment strategy is essential before having any investment decisions. A
business strategy is generally based upon long run period. Formation of business strategy
largely dependent upon the factors such as long-term goals and risk on the investment.
As the return on investment is not always clear, so the investors prepare the strategy so as to
face the ongoing challenges in investment. A balanced investment strategy is generally
required in the process of investment, which possesses long time period and some risk
tolerance.
In the case, when a strategy is aggressive the chance of attaining a higher goal is higher. An
efficient strategy can be obtained from portfolio theory, which shows good estimates on risk and
return.
Investment Strategy is usually considered to be more of a branch of finance than economics. It
is defined as set of rules, a definite behavior or procedure guiding an investor to choose his
investment portfolio. For example, investing in mutual funds has recently emerged as a very
favorable investment strategy.
An investment strategy is centered on a risk-return tradeoff for a potential investor. High return
investment instruments such as real estate and mutual funds usually have more risks associated
with it than low return-low risk investment opportunities. Return on investment can be calculated
on past or current investment or on the estimated return on future investment.
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24. TYPES OF INVESTMENTS / VARIOUS INSTRUMENTS
OVERVIEW
There are many ways to invest your money. Of course, to decide which investment
vehicles are suitable for you, you need to know their characteristics and why they may
be suitable for a particular investing objective.
•Debt Market
•Public Provident Fund
•Fixed Deposits
•Bonds
•Mutual Funds
•Banks Deposits
•Equity Market
•Initial Public Offer
•Insurance
•Forex
•Cash
•Gold
•Real Estate
FEATURES OF DIFFERENT TYPES OF INVESTMENTS
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25. Returns Safety Volatility Liquidity Convenience
Equity High Low High High Moderate
Bonds Low High Moderate Moderate High
Co. Moderate Moderate Moderate Low Low
Debentures
FDs Moderate Low Low Low Moderate
Bank Deposits Low High Low High High
PPF Moderate High Low Moderate High
Life Insurance Low High Low Low Moderate
Gold Moderate High Moderate Moderate Moderate
Real Estate High Moderate High Low Low
Mutual Funds High Moderate Moderate High High
Forex Moderate Moderate Moderate High Moderate
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26. 1. DEBT INSTRUMENTS
Debt instruments protect your capital, therefore the importance of a solid debt
portfolio. This not only gives stability, but also offers you optimal returns, liquidity
and tax benefits. Debt products, besides safeguarding your capital, can be used to
meet short, medium and long-term financial needs.
SHORT TERM INVESTMENT
They are good for short term goals, you can look at liquid funds, floating rate funds
and short- term bank deposits as options for this category of investments.. However,
liquid funds are better, if your time horizon is less than one-year, say around six
months. This is because the bank deposit rates decrease proportionately with
lower periods, while liquid funds will yield the same annualized returns for any period
of time.
Medium & Long-Term Options:
These options typically offer low or virtually no liquidity. They are, however, largely
useful as income accumulation tools because of the assured interest rates they offer.
These instruments (small savings schemes) should find place in your long-term debt
portfolio.
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27.
28. SMALL SAVING SCHEMES:
Schemes Type Interest Term Min-Max Premature Tax
Rate Investment Withdrawal Benefit
Public Recurring 8% pa 15 Min: Rs.500 Yes U/S
Provident years Max:Rs.70,00 80C
Fund 0
National Growth 8% 6 years Min: Rs.100 No U/S
Savings compounded Max: No 80C
Certificate half yearly upper limit
Kisan Vikas Patra Growth Amount 8 years Min: Rs.100 Yes Nil
doubles in 8 & 7 Max: No
years & 7 months upper limit
months
Post Office Time Fixed 6.25% - 1-5 Min: Rs.200 Yes Nil
& Recurring Deposit 7.50% pa years Max: No
Deposit upper limit
Post Office Regular 8% pa 6 years Min: Rs.1, Yes Nil
Monthly Income Income payable 000 Max:
Scheme monthly Rs.3Lac
(Single)
Rs.6Lac
(Jointly)
Senior Regular 9% pa 5 Min: Rs.1, 000 Yes Nil
Citizens Income payable years Max: Rs.15Lac
Savings quarterly
Scheme
29. 2. BONDS
It is a fixed income instrument issued for a period of more than one year with the
purpose of raising capital. The central or state government, corporations and
similar institutions sell bonds. A bond is generally a promise to repay the principal
along with a fixed rate of interest on a specified date, called the Maturity Date.
The main attraction of bonds is their relative safety. As a result, the rate of return
on bonds is generally lower than other securities.
Tax Saving Bonds
These are those bonds that have a special provision that allows the investor to
save on tax. Examples of such bonds are:
a) Infrastructure Bonds
b) Capital Gains Bonds
a.Rural Electrification Corporation (REC) Bonds
b.National Highway Authority of India (NHAI)
c.National Bank for Agriculture & Rural Development
C) RBI Tax Relief Bonds
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30. 3. MUTUAL FUNDS
A mutual fund is a body corporate registered with SEBI that pools money
from the Individuals/corporate investors and invests the same in a variety of
different financial Instruments or securities such as Equity Shares, Government
Securities, Bonds, Debentures, etc. The income earned through these investments
and the capital appreciations realized are shared by its unit holders in proportion to
the number of units owned by them. Thus a Mutual Fund is the most suitable
investment for the common man as it offers an opportunity to invest in a
diversified, professionally managed basket of securities at a relatively low cost.
Mutual fund units are issued and redeemed by the Asset Management Company
(AMC) based on the fund’s net asset value (NAV), which is determined at the end of
each trading session.
Mutual funds are considered to be the best investments as on one hand it provides
good Returns and on the other hand it gives us safety in comparison to other
investments avenues.
Figure: Below describes broadly the working of a mutual fund:-
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31. 4. EQUITY
Equities are often regarded as the best performing asset class vis-à-vis its peers over
longer time frames. However equity-oriented investments are also capable of
exposing investors to the highest degree of volatility and risk. There are a number
of factors, which affect the performance of equities ad studying and understanding
all of them on an ongoing basis, can be challenging for most.
Stock markets have always been a draw for investors for their ability to generate
wealth over the long-term. Fear, greed and a short-term investment approach act
as hurdles that frustrate the investor from achieving his/her investment goals. You
need to keep in mind the risk associated with the stocks. You also need to diversify
your equity portfolio i.e., include more stocks and sectors. This helps you diversify
your investment risk, so even if something were to go wrong with a stock/industry in
your portfolio, other stocks/industries should help you shore up your portfolio.
Two important resources that are critical to investing directly in stock markets are
quality stock research and a reliable and inexpensive stock broker. The first one –
research on stocks is the most critical input that investors need to identify before
they begin investing in stock markets. This is because even while you may have
the risk appetite for equities, you still need credible, stock market related research
that can help you make the right investment decision.
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32. 5. INSURANCE
Life insurance has traditionally been looked upon pre-dominantly as an avenue that
offers tax benefits while also doubling up as a saving instrument. The purpose of
life insurance is to indemnify the nominees in case of an eventuality to the insured. In
other words, life insurance is intended to secure the financial future of the nominees
in the absence of the person insured.
The purpose of buying a life insurance is to protect your dependants from any
financial difficulties in your absence. It helps individuals in providing them with the
twin benefits of insuring themselves while at the same time acting as a compulsory
savings instrument to take care of their future needs. Life insurance can aid your
family on a rainy day, at a time when help from every quarter is welcome and of
course, since some plans also double up as a savings instrument, they assist you
in planning for such future needs like children’s marriage, purchase of various
household items, gold purchases or as seed capital for starting a business.
Traditionally, buying life insurance has always formed an integral part of an
individual’s annual tax planning exercise. While it is important for individuals to
have life cover, it is equally important that they buy insurance keeping both their
long-term financial goals and their tax planning in mind. This note explains the role
of life insurance in an individual’s tax planning exercise while also evaluating the
various options available at one’s disposal.
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33. Life is full of dangers, but with insurance, you can at least ensure that you and your
dependents don’t suffer. It’s easier to walk the tightrope if you know there is a safety
net.
You should try and take cover for all insurable risks. If you are aware of the major
risks and buy the right products, you can cover quite a few bases. The major
insurable risks are as follows:
• Life
• Health
• Income
• Professional Hazards
• Assets
• Outliving wealth
• Debt repayment
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34. 6.GOLD
In India, gold has traditionally played a multi-faceted role. Apart from being used for
adornment purpose, it has also served as an asset of the last resort and a hedge
against inflation and currency depreciation.
India has more than 13,000 tones of hoarded gold, which translates to around Rs.6,
50,000 crores. Gold is an asset class that’s associated with safety.
However, the ups and down that the yellow metal has seen over the last few
months, has made it look similar to other market investment assets. This is due to
an unprecedented demand for gold as an investment avenue since the last couple
of years.
Gold has attracted a high level of attention in last couple of years, with an image
shift from a non-volatile asset to a hot investment avenue. The future outlook for
the metal looks positive given its proven linear relationship with the crude oil and
non-linear with the US dollar. The much-awaited gold exchange-traded funds
would provide a very good vehicle to the investors and a sensible alternative to the
current forms available for investment
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35. 7.REAL ESTATE
Real estate is a great investment option, as it gives you capital appreciation and
rental income. It’s an investment option since it fights inflation. The fundamentals
for investing in property markets remain strong in India - relatively low interest rates,
strong capital flows, high employment growth, abundant liquidity, attractive
demographics (young population and migration from West), increase in
affordability, and a large supply of stock to keep up with demand and focus on
quality. The price you pay for a property should reflect the future rent/income at
which you let it. As in the stock market, the prices in real estate are also driven by
sentiments. All that is required to reverse a price movement is a change in
sentiment.
Start saving for a home the moment you begin your career. Early acquisition helps
you to repay your home loan well within your working life. Also, the EMI as a
percentage of your salary decreases as your pay increases making the outflows
more affordable. If you lock into the interest rate for the loan, the interest outflow
will be less than the compounding effect of inflation.
You should be very clear about why you want to invest in real estate. It is a very
good tool for wealth creation but like all other assets, has its share of risks. Careful
planning, however, can minimize the risks.
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36. 8) FOREX
If you read about investing, you've seen the word forex trading. But because forex
doesn't get much publicity in the major publications and websites, many investors
don't know that forex is just short for "foreign exchange". So trading the forex
market is simply trading
When buying and selling in the forex currency trading system market, you'll see
that there are four "currency pairs" that dominate the percentage of trades. Those
four are the Euro vs U.S. Dollar, US Dollar vs Japanese Yen, US Dollar vs Swiss
Franc, and US Dollar vs British Pound.
The goal when investing in currency is to be holding a currency that appreciates in
value in relation to the other currencies. To use an overly simplistic example, if you
bought 50 British Pounds for 100 US Dollars, held the Pounds for 1 week, and in that
period the value of Pounds increased in relation to US Dollars, you could then
convert those Pounds back into dollars for, say, $120.
Unlike the domestic stock markets, the forex currency trading is open for trades 24
hours a day. Much like the phrase "it's always noon somewhere," it's always
business hours at some region of the globe. Since every country trades on the FX
market, and it's open all day, the daily volume is roughly $1.2 trillion, which dwarfs
that of the NYSE. Another comparison to make in order to truly realize the
magnitude of the forex market is with the currency futures market (which has
around 1% of the daily volume).
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37. 9) FIXED DEPOSITS
The same as a term or time deposit. Money may be placed with a bank, merchant
bank, building society or credit union for a fixed term at a fixed rate of interest which
remains unchanged during the period of the deposit. Depositors may have to
accept an interest penalty if they break the deposit, ie, ask to take the money out
before the agreed period has expired.
Few points which FD investors must consider at the time of investment,
1. Safety
FDs have conventionally been the premier choice for investors with a low risk
appetite; assured returns is the key factor which attracts investors towards
deposits. Stick to FDs of the highest credit rating i.e. those with a “AAA” rating
even if their rates seem modest vis-à-vis those offered by company deposits.
2. Tenure
Short tenured fixed deposits continue to be your best bet. With interest rates on
the ascent, a further hike in rates offered by fixed deposits cannot be ruled out.
Locking your investments in longer tenured instruments may lead to an opportunity
loss.
3. Liquidity
Find out how FD fares on the pre-mature encashment front i.e. how easily can your
investment be liquidated. Also enquire about the penalty clauses, e.g. do you suffer a
loss of interest and/or principal amount. Compare how various FDs rank on this
parameter and pick the best deal; thereby try to minimise the impact of illiquidity
which is typically associated with FDs.
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38. 4. Additional benefits
Fixed deposits from reputed entities offer additional benefits, e.g. they can be used
as collateral against which loans can be raised. Select a fixed deposit scheme
which scores favourably on such parameters
Any investment portfolio should comprise the right mix of safe, moderate and risky
investments. While mutual funds and stocks are the favorite contenders for
moderate and risky investments, fixed deposits, government bonds etc. are
considered safe investments. Fixed deposits have been particularly popular among a
large section of investors in India as a safe investment option for a long period.
With fixed deposits or FDs as they are popularly known, a person can invest an
amount for a fixed duration. The banks provide interest rates depending on this loan
amount and the tenure of deposit. Here are the benefits, drawbacks of fixed deposits
and precautions one should take while making such investments.
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40. INTRODUCTION OF RESEARCH
Research in common parlance refers to a search for knowledge.
Once can also define research as a scientific and systematic search for
pertinent information on a specific topic.
Definition: According to Clifford woody research comprises defining and
redefining problems, formulating, hypothesis or suggested solutions;
collecting and evaluating data; making deductions and researching
conclusions; and at last carefully testing the conclusions to determine
whether they fit the formulating hypothesis.
Meaning:
“A careful investigation or inquiry especially through search for new
facts in any branch of knowledge”
Some people consider research as a movement, a movement from
the known to the unknown. It is actually a voyage of discovery. We all
possess the vital instinct of inquisitiveness for, when the unknown
confronts us, we wonder and our inquisitiveness makes us probe and
attain full and fuller understanding of the unknown. This inquisitiveness is
the mother of knowledge of the method, which man employs for obtaining
the knowledge of whatever the unknown, can be termed as research.
In short, the search for knowledge through objective and systematic
method of finding solution to a problem is research.
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41. Research methodology:
Research methodology is a way to solve the research problem. It is
necessary for the researcher to know not only the research method but
also the methodology.
Researcher not only need to know how to develop certain test, how
to calculate the mean, median and mode and how to apply the particular
research techniques, but they also need to know which of the methods are
relevant and what would they indicate and why.
Researcher needs to understand the assumptions underlying various
techniques and them to know the criteria by which they can decide certain
techniques which will be applicable to solve the problems.
Meanwhile he has to take certain decisions before they are implemented.
The scope of researcher, methodology is wider the questions that arrives
in minds of researcher are,
• Why a research study has been formulated?
• Which data has to be collected?
• Which technique should be used?
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42. OBJECTIVES OF RESEARCH METHODOLOGY
The purpose of research is to discover answers to questions through
the application of scientific procedures. The main aim of research is to
find out the truth which is hidden and which has not been discovered as
yet.
Through each research study has its own specific purpose, we may
think of research objectives as falling into a number of following broad
groupings:
To gain familiarity with a phenomenon or to achieve new
insights in to it (studies with of object in view are termed as
exploratory or formulate research studies)
To portray accurately the characteristics of a particular
individual, situation or a group (studies with this object in view
are no one as descriptive research studies)
To determine frequency with which something occurs or with
which it is associated with something else(studies with this
object in view are no one as diagnostic research studies)
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43. To test a hypothesis of a causal relationship between
variables(such studies are known as hypothesis-testing
research studies)
RESEARCH PROCESS
FORMULATING THE RESEARCH PROBLEM
EXTENSIVE LITERATURE SURVEY
DEVELOPMENT OF WORKING HYPOTHESES
PREPARING THE RESEARCH DESIGN
DETERMINING SAMPLE DESIGN
COLLECTING THE DATA
EXECUTION OF THE PROJECT
ANALYSIS OF DATA
HYPOTHESIS OF DATA
GENERALIZATION AND INTERPRETATION
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44. PREPARATION OF THE REPORT OR THE THESIS
PROCESS OF THE RESEARCH
1Formulating the research problem:-
There are two types of research problem those, which relate to states of
nature and those, which relate to relation ship..
2Extensive literature survey:-
Once the problem is formulated a brief summary of it should be written down.
A good library will be a great help to the researcher at this stage.
3Development of working hypothesis:-
After extensive literature survey, researcher should state in clear terms the
working hypothesis.
4Preparing the research design:-
The research having been formulated in clear-cut terms, the researcher will
be required to prepare a research design.
5. Determining sample design:-
All the items under Consideration in any field of inquiry constitute a
“population”. A complete enumeration of all the items in the ‘population’ is
known as a census inquiry.
6. Collecting the data:-
There are several ways of collecting the appropriate data which differ
considerably in context of money costs, time and other researchers at the
disposal of the researcher.
7. Execution of the project:-
Execution of the project is a very important step in the research process.
8. Analysis of data:-
After the data have been collected the researcher turns to the task of
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45. analyzing them. Thus researcher should classify the raw data into same
purposeful & usable categories
.
9. Hypothesis testing:-
After analyzing the data as stated above the researcher is in a position to test
the hypothesis.
10. Generalization and interpretation:-
Is a hypothesis is tested and upheld several times, it may be possible for the
researcher to arrival at generalization. If researcher had no hypothesis to start
with,
11. Preparation of the report or the thesis:-
Finally the researcher has to prepare the report of what has been done by him
writing the report must be done with great care keeping in view the following.
The main text of the report should have the following parts.
• Introduction
• Summary of findings
• Main report
• conclusion
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46. TYPES OF RESEARCH
The basic types of research are as follows:
1. Descriptive vs. Analytical
2. Applied vs. Fundamental
3. Quantitative vs. Qualitative
4. Conceptual vs. Empirical
5. Some other types of research
Lets us understand briefly,
1. Descriptive vs. Analytical
Descriptive research includes survey and fact-finding enquiries of
different kinds. The major purpose of descriptive research is
description of the state of affairs as it exists at present.
The main characteristics of this method are that the research has
no control over the variables; he can only report what has happened
or what is happening.
The methods of research utilized in descriptive research are
survey methods of all kinds, including comparative and correlational
methods.
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47. In analytical research on the other hand, the researcher has to
use facts or information already available, and analyze these two
make a critical evaluation of the material.
2. Applied vs. fundamental
Research can either be applied research or fundamental
research. Applied research aims at finding a solution for an
immediate problem facing society or an industrial/business
organization, whereas fundamental research is mainly concerned
with generalizations and with the formulation of a theory.
Research concerning some natural phenomenon or relating to
pure mathematics are examples of fundamental research. Similarly,
research studies concerning human behavior carried on with a view
to make generalizations about human behavior, are also examples of
fundamental research.
3. Quantitative vs. Qualitative
Quantitative research is based on the measurement of quantity or
amount. It is applicable to phenomena that can be expressed in
terms of quantity.
Qualitative research, on the other, is concerned with Qualitative
phenomenon i.e. phenomena relating to or involving quality or kind.
4. Conceptual vs. Empirical
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48. Conceptual research is that related to some abstract idea or
theory. It is generally used by philosophers and thinkers to develop
new concepts or to reinterpret existing once.
On the other hand, Empirical research relies on experience or
observation alone, often without due regard for system or theory.
5. Some other types of research
There are various other types of research such as,
One time research or longitudinal
Field setting research or laboratory
Clinical or diagnostics
Exploratory
RESEARCH DESIGN:
A research design is simply and purely the framework of plan for a study that guides the
collection and analysis of data. The study is intended to find investors preference
towards various investment avenues. The study design is descriptive in nature.
TYPE OF RESEARCH:
Descriptive Research
Descriptive research is fact finding investigation with adequate interpretation. It is the
simplest type of research and is more specified.
Mainly designed to gather descriptive information and provides information for more
sophisticated studies.
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49. SAMPLING DESIGN:
Selection of study area: The study of area is in Bhavnagar
Sample size: 100
SAMPLING METHODS:
Convenience method of sampling is used to collect the data from the respondent.
DATA COLLECTION:
Primary data: Collected through structured questionnaires.
Secondary data: Earlier records from journals, magazines and other sources.
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51. PERSONAL DETAILS
Age:
Age 20-30 31-40 41-50 51 and above
No of
respondent 36 27 20 17
Out of the respondents I surveyed maximum were between the age group of 20 to 30.
Out of 100 respondents 36 respondents belong to age group between 20 years to 30
years i.e. 36% and the least no of respondents were from the age group of 51 years and
above.
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52. Educational qualification:
Qualification No of respondent
High school 7
Graduate 63
Post graduate 30
Phd 0
others 0
Most of the respondents surveyed were Graduate i.e. out of 100 respondents 63
respondents i.e. 63% respondents qualification was up to graduation level and 30%
i.e.30 respondents were post graduate there were no respondents whose qualification
was PHD.
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53. Occupation:
Occupation No of respondent
Profession 7
Businessman 46
Govt servant 7
Employee 30
Student 10
Others 0
Out of the respondents surveyed about 46% i.e. 46 respondents are businessman, 30%
i.e.30 respondents are employee, 7 respondents are professionals and 7 are Govt
servant.
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54. Annual Income:
Income group No of respondent
below 1 lakh 10
1-5 lakh 63
5-10 lakh 7
Above 10 lakh 20
group above 10 lakh generally they are businessman.
10% of the respondents i.e. 10 belong to the income group below 1 lakh it consists of
Out of the sample surveyed about 63% of respondents i.e. 63 respondents belong to the
Income group between 1 lakh to 5 lakh.
20% of the sample size i.e. 20 respondents belong to the income students pursing post
graduation.
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55. SURVEY QUESTIONS
Q1) what is your Annual savings?
Annual savings No of respondent
10% to 20% 33
20% to 30% 67
30% to 40% 0
more than 40% 0
Savings play an important role in the economy of any nation and in India generally
people are of conservative approach and believe in savings in my survey I found that
nearly 67% of the respondents i.e. 67 respondents annual savings is between 20% to
30% which they invest in various investment instruments for future growth and also to
generate handsome returns from those opportunities available to them.
33% of the respondents i.e. 33 respondents’ annual savings is between 10% to 20%
generally they come into the age group between 20 years to 30 years and are students
and many are employee.
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56. Q2) which type of Instrument do you prefer for your Investment?
Type of Instrument No of respondents
PPF 0
Fixed deposits 17
Mutual funds 6
equity shares 36
IPOS 7
Gold 7
Real estate 7
Insurance 20
Bonds 0
From the survey I came to know that about 36% of the respondents i.e. 36
respondents prefer equity shares as a preferred investment option because equity
shares are highly liquid in nature and may provide good returns over long term.
Generally young people between the age group of 20 to 30 years and risk takers
prefer equity shares as an investment option.
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57. Q3) what is the purpose of the Investment?
Purpose of investment No of respondents
safety 30
returns 50
retirement planning 7
tax benefits 13
beating inflation 0
beating inflation 0
Investing is a conscious decision to set money aside for a long enough periods in
an avenue that suits your risk profile. The questionnaire asked the respondents to
reveal their objective behind Investments, majority of the respondents disclosed
growth of capital/ returns as their prime objective while safety of capital stands
secondary. This response reflects the investor willingness to take calculated risks
for growth of their capital.
50% of the respondents i.e. 50 respondents purpose from Investments is returns
and 30% of the respondents’ purpose is safety while investing in any financial
instrument and 13% respondents’ purpose for Investments is getting tax benefits.
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58. Q4) On what basis you will Invest in any particular Financial Instrument?
Basis of Investment No of respondents
past performance 20
portfolio 27
fund manager 13
technical analysis 23
market sentiment 17
The respondents were mostly of the opinion that portfolio is the most important factor before
Investing and then fundamental analysis done by them or by the financial advisor and
then the other factors
27% of the respondents i.e.27 people will invest in any financial instrument as a portfolio and
23% respondents i.e. 23 people invest in any instrument after doing fundamental technical
analysis, 20% of the respondents see to past performance of the instrument before investing
and rest of them look at the market sentiment on the basis of which they decide to Invest in a
certain Instrument
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59. Q5) Where do you prefer for Investment?
Preference for Investment No of respondents
Govt banks 20
Private banks 7
NBFC'S 0
Public sector 23
Private sector 50
50% of the respondents prefer private sector for their investment as they think they
are specialize in their work of giving advice, and they knows very well about
various investment opportunities available in market. Respondents who prefer Govt
and private banks are only 20% and 7% respectively they think government bank
gives reliable news.
But generally they prefer private banks if someone is their known to them or if
there is any good relationship, which is made by giving those services at the time
of their current and savings accounts.
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60. Q6) How do you take Financial Decisions?
How do you take financial decision No of respondents
Independently 50
advice from friends/relatives 20
advice from banks 0
NBFC'S advisors 7
Financial advisors 23
On enquiring from the respondents about how they take their financial decisions,
majority of the respondents take their financial decisions independently which depicts
they are not taking any advisory services from financial experts. There are majority
of respondents who feel that they can handle their portfolio on their own and
hence make their own decisions regarding Investments.
50% of the respondents take the financial decisions independently, 20% of the
respondents take the advice of the friends and relatives while taking their
investment decision and 23% of the respondents take the help of financial advisors
while taking financial decision.
This opens up the door for various financial advisors who can target these investors
and can give advisory services.
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61. Q7) If Independently, then what do you see while Investing?
What factor do u see while investing
independently No of respondents
Risk factor 7
Fixed returns 33
History of instrument 13
Future Growth 47
Trend of other investors 0
Analyzing the response of investors every investor keep in mind the future growth of
investment instrument, is that instrument can give the good growth or returns on
their invested money. Generally they make assumption of future growth on the basis
of history of instrument and invest accordingly. 7% investors also keep Risk Factor
at time of investment in their mind, as they want to invest in safer instrument as
they said no one wants to lose their money. They also accept investment in equity
is more risky but it adds higher returns.
33% investors don’t want to take risk of volatility they think of fixed returns by
investing in fixed deposits also they invests in insurance and gold.
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62. Q8) Which Tendency do you prefer the most?
Which tendency do you prefer No of respondents
Low risk, low return 30
Moderate risk, moderate return 26
High risk, high return 18
Low risk, high return 27
Respondents response shows 17% people like the tendency high risk high return, as
they believe unless and until we would not take risk how can we earn or get return
more. That tendency is generally prefer by business and servicemen whose income
level is more than 10 lakh.
The income level of 5 to 10 lac generally prefer moderate risk or low risk to invest in
insurance, mutual fund, gold .The age level also influence the tendency the age
level between 20 –30 likes to take risks but above 45 they prefer low risk low return.
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63. Q9) What is the Investment horizon you prefer?
Investment Horizon No of respondents
less than 6 months 10
6 month to 1 year 37
I year to 3 year 20
more than 3 year 33
Out of the 100 respondents 37 respondents were of the view that they invested there for
a money at least for a period of 6 month to 1year they are those respondents which
invests in equity shares
20% of the respondents i.e. 20 respondents invests for the period for a 1year to 3 year
generally they invest in fixed deposits, gold, mutual funds, and equity shares for long
term.33% of the respondents i.e. 33 invest for more than 3 year horizon to get steady
and fixed returns generally they are those which invest their savings in insurance, real
estate, gold etc.
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64. Q10) How much return you expect from any Financial Instrument?
Returns expected No of respondents
10% to 20% 40
20% to 30% 30
30% to 50% 23
More than 50% 7
40% of the Respondents responses showed that they expect 10% to 20%
returns which can beat inflation and those respondents generally invest in
fixed deposits, insurance, gold etc.
30% of the respondents i.e.30 respondents expects 20 % to 30% returns
which they generally get through investing in real estate, mutual funds,
equity shares etc.
Generally young people expect more returns because of their aggressive
nature and they tend to take risk so they invests in equity shares and IPOs
which can sometimes due to market sentiment can provide good returns to
investors.
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65. Q11) Are you satisfied with your investment decision, Please rate?
Are you satisfied with your investment
decision No of respondents
Highly satisfied 20
Satisfied 60
Less satisfied 20
Not satisfied 0
Respondents response showed that about 60% of the respondents i.e. 60
respondents are satisfied with their Investment decision and mostly they
belong to the age group between 30 years to 40 years and are employee
as an occupation, generally they Invest in fixed deposit and insurance
which are safer Investment instruments and can generate steady and
future returns.
Nearly 20% of the respondents are highly satisfied because they take
advice from the friends and relatives and financial advisors before taking
any financial decision this helps them to take rational and correct
decision.
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66. Findings
• I found this topic as an investment by surveying from people about stocks and
they recommend that they are investing their extra money in stock market.
• Some person also told that they are investing in stocks by online investing
service provided by the broker.
• People want to suggested that they are selecting broker who provides
maximum information at minimum brokerage for investing.
• They also told that they are opening depository account for long term
investment.
• By surveying people’s interest we found that most of people are investing their
extra money in stocks and mutual funds.
• The people also invest their money in systematic plan policy.
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67. RECOMMENDATIONS
India is seeing as a maturing financial environment. Options to attract savings exist
through a spate of financial products and services that have differing risk/growth
and asset accretion propositions. It is becoming increasingly obvious to people that
their money, in real terms, would fall in value if they were to keep their money in the
bank. And hence the keenness to find out the right avenue that would help grows
their savings or assets.
Financial Planning Should Be Encouraged
‘Financial planning’ is the process of charting out the money course of your life. It’s
like having a financial roadmap that guides your every step till you pass on the
baton to the next generation. In other words, it is a process in which an individual
sets long-term financial goals through investments, tax planning, asset allocation,
risk management, retirement planning and estate planning. Most of us approach our
financial lives like the disorganized traveler who gets to his destination eventually
and perhaps even enjoys the rough ride. We think we have a clear roadmap in
mind, but our financial lives are marked by ad-hoc decisions and capitulation to the
temptations of the flavors of the financial season.
One of the myths regarding financial planning is that only rich individuals and
HNIs can undertake this. This perception exists because most players in the market
target these people, as they are very profitable customers. However, anyone can
use financial planning. In fact, individuals should use effective financial planning to
build their wealth over the years.
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68. CONCLUSION
• The young people should start investing earlier so that they can reap the benefits
of investing in future
• People should keep their eye open and keep updating themselves about various
investment avenues so that they can get safe returns
• Growth of capital acts as a primary objective behind investments
• Day by day the economy of the country is growing and there are various
investment options available for the people in which they can invest and can get
returns but they should consider various factors such as risk factor, time horizon,
safety, fixed returns, past performance before investing in any such instrument.
• Any investors portfolio should comprise of different investment instruments such
as equity shares, insurance, fixed deposits etc because if the portfolio is
diversified it gives a good returns in long term and contains less risk so ones
portfolio should be diversified.
• There is a great need to provide awareness of various investment opportunities
available so that each and every investor or an ordinary people can take
opportunity and can get benefit of capital appreciation.
• Mostly Investors are taking financial decisions independently, which depicts
that there is a need of financial planners to approach these investors in a
proper manner so as to provide value additions to the saving potential
and portfolio
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70. Business Today
Business India
Capital Markets
Dalal Street
Business & Economy
QUESTIONNAIRE
Hello Sir/Madam, I am pursuing bba from swami Sahjanand College of commerce and
management). In fulfillment of our course curriculum I am required to do a Research
study. The topic which I had selected is ‘attitude of retail investor towards
investment and diverse investment stratagies’ I would appreciate if you could kindly
spend few minutes of your valuable time and help us in filling this questionnaire. The
data collected through this survey is purely for the academic purpose and will be kept
completely confidential.
PERSONAL DETAILS
1. Name:
2. Age:
(a) 20
-30 (b) 31-40 (c) 41-50 (d) 51 & above
3. Gender:
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71. (a) Male (b) Female
4. Educational qualification:
(a) High School (b) Graduate (c) Post Graduate
(d) PhD. (e) Others
5. Occupation:
(a) Profession (b) Businessman (c) Govt servant (d) Employee
(e) Student (f) Others
6. Annual income:
(a) Below 1, 00,000 (b) 1, 00,000 - 5, 00,000 [ ]
(c) 5, 00,000 - 10, 00,000 (d) Above 10, 00,000
SURVEY QUESTIONS
Q1) what is your Annual savings?
a) 10 % to 20 %
b) 20 % to 30 %
c) 30 % to 40 %
d) More than 40 %
Q2) Which type of Instrument do you prefer for your Investment?
(Tick the most preferred one)
(a) Public provident fund (b) Fixed deposits (c) Mutual funds
(d) Equity shares (e) Post office scheme (f) Gold
(g) Real estate (h) Forex (i) IPO’S
(j) Insurance (k) Govt bonds (l) others
Q3) What is the purpose of the Investment?
(a) Safety (b) Returns (c) Retirement planning
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72. (d) Tax benefits (e) Beating inflation (f) Liquidity
(g) Others
Q4) On what basis you will Invest in any particular Financial Instrument?
(a) Past Performance (b) Portfolio (c) Fund Manager
(d) Fundamental/Technical Analysis (e) Market Sentiment
(f) If any other please specify………………………………………………
Q5) Where do you prefer for Investment?
(a) Government banks (b) Private banks (c) NBFC’S
(d) Public sector (e) Private sector (f) others
Q6) How do you take Financial Decisions?
(a) Independently (b) Advise from Friends/Relatives
(c) Advise from banks (d) NBFC’S advisors
(e) Financial advisor (f) others
Q7) If Independently, then what do you see while Investing?
a) Risk Factor
b) Fixed returns
c) History of instrument
d) Future growth
e) Trend of other investors
Q8) Which Tendency do you prefer the most?
(a) Low risk, low return (b) Moderate risk, moderate return
(c) High risk, high return (d) Low risk, high return
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73. Q9) What is the investment horizon you prefer?
(a) Less than 6 months (b) 6 months to 1 year (c) 1 year to 3 year
(d) More than 3 years
Q10) How much return you expect from any Financial Instrument?
(a) 10% to 20 % (b) 20% to 30% (c) 30% to 50% (d) More than 50 %
Q11) Are you satisfied with your investment decision, Please rate?
(a) Highly satisfied (b) Satisfied (c) Less satisfied (d) Not satisfied
THANK YOU
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