INTRODUCTION

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
economys future productive capacity and, ultimately, a growth in the
standard of living. !y 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.
"
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. #eople commit money to investments with an e$pectation to
increase their future wealth by investing money to spend in future years.
For e$ample, if you invest %s. "&&& today and earn "& 'over the ne$t year,
you will have %s.""&& one year from today.
(n investment can be described as perfect if it satisfies all the needs of all
investors. So, the starting point in searching for the perfect investment
would be to e$amine investor needs. If all those needs are met by the
investment, then that investment can be termed the perfect investment.
)ost investors and advisors spend a great deal of time understanding the
merits of the thousands of investments available in India. *ittle time,
however, is spent understanding the needs of the investor and ensuring that
the most appropriate investments are selected for him.
The Investment Needs of an Investor
!y and large, most investors have eight common needs from their
investments+
". Security of ,riginal -apital.
/. Wealth (ccumulation.
0. -omfort Factor.
1. Ta$ 2fficiency.
3. *ife -over.
4. Income.
/
5. Simplicity.
6. 2ase of Withdrawal.
7. -ommunication.

Security of original caital! 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.
"ealth accumulation! This is largely a factor of investment performance,
including both short8term performance of an investment and long8term
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. (voiding discomfort is probably a greater need than receiving
comfort. %eputation plays an important part in delivering the comfort
factor.
Ta# efficiency! *egitimate reduction in the amount of ta$ payable is an
important part of the Indian psyche. 2very rupee saved in ta$es goes
towards wealth accumulation.
$ife Cover! )any investors look for investments that offer good return
with ade9uate life cover to manage the situations in case of any
eventualities.
0
Income! This refers to money distributed at intervals by an investment,
which are usually used by the investor for meeting regular e$penses.
Income needs tend to be fairly constant because they are related to lifestyle
and are well understood by investors.
Simlicity! Investment instruments are comple$, but investors need to
understand what is being done with their money. ( planner should also
deliver simplicity to investors.
Ease of %ithdra%al! This refers to the ability to invest long term but
withdraw funds when desired. This is strongly linked to a sense of
ownership. It is normally triggered by a need to spend capital, change
investments or cater to changes in other needs. (ccess to a long8term
investment at short notice can only be had at a substantial cost.
Communication! This refers to informing and educating investors about
the purpose and progress of their investments. The need to communicate
increases when investments are threatened.
Security of original capital is more important when performance
falls.
#erformance is more important when investments are performing
well.
Failures engender a desire for an increase in the comfort factor.
1
#erfect investment would have been achieved if all the above8mentioned
needs had been met to satisfaction. !ut there is always a trade8off involved
in making investments. (s long as the investment strategy matches the
needs of investor according to the priority assigned to them, he should be
happy.
The Ideal Investment strategy should be a customi:ed one for each investor
depending on his risk8return profile, his satisfaction level, his income, and
his e$pectations. (ccurate planning gives accurate results. (nd for that
there must be an efficient and trustworthy roadmap to achieve the ultimate
goal of wealth ma$imi:ation.
Choosing the Right Investment Otions
(fter understanding the concept of investment, the investors would like to
know how to go about the task of investment, how much to invest at any
moment and when to buy or sell the securities, This depends on investment
process as investment policy, investment analysis, valuation of securities,
portfolio construction and portfolio evaluation and revision. 2very investor
tries to derive ma$imum economic advantage from his investment activity.
For evaluating an investment avenues are based upon the rate of return, risk
and uncertainty, capital appreciation, marketability, ta$ advantage and
convenience of investment. The following Table should give the clear
picture relating to the investors investment decisions in various financial
market instruments. The choice of the best investment options will depend
on personal circumstances as well as general market conditions. For
e$ample, a good investment for a long8term retirement plan may not be a
good investment for higher education e$penses. In most cases, the right
investment is a balance of three things+ *i9uidity, Safety and %eturn.
3
Source8 Delhi Business Review X Vol. 8, No. 1 (January - June 2007)
4
Investment Otions in India
Source&Delhi Business Review X Vol. 8, No. 1 (January - June 2007)
'i#ed Deosits ; They cover the fi$ed deposits of varied tenors offered by
the commercial banks and other non8banking financial institutions. These
are generally a low risk prepositions as the commercial banks are believed to
return the amount due without default. !y and large these F<s are the
preferred choice of risk8averse Indian investors who rate safety of capital =
ease of investment above all parameters. *argely, these investments earn a
marginal rate of return of 486' per annum.
5
(overnment )onds ; The -entral and State >overnments raise money
from the market through a variety of Small Saving Schemes like national
saving certificates, ?isan @ikas #atra, #ost ,ffice <eposits, #rovident
Funds, etc. These schemes are risk free as the government does not default
in payments. !ut the interest rates offered by them are in the range of 5' 8
7'.
Money&*ac+ insurance 8 Insurance in India is mostly sold and bought as
investment products. They are preferred because of their add8on benefits like
financial life8cover, ta$8savings and satisfactory returns. 2ven if one does
not manage to save money and invest regularly in financial instruments, with
insurance, the policyholder has no choice. If he does not pay his premiums
on time, his insurance cover will lapse. )oney8back Insurance schemes are
used as investment avenues as they offer partial cash8back at certain
intervals. This money can be utili:ed for childrens education, marriage, etc.
Endo%ment Insurance ; These policies are term policies. Investors have to
pay the premiums for a particular term, and at maturity the accrued bonus
and other benefits are returned to the policyholder if he survives at maturity.
)ullion Mar+et ; #recious metals like gold and silver had been a safe
heaven for Indian investors since ages. !esides jewellery these metals are
used for investment purposes also. Since last " year, both >old and Silver
have highly appreciated in value both in the domestic as well as the
international markets. In addition to its attributes as a store of value, the case
6
for investing in gold revolves around the role it can play as a portfolio
diversifier.
Stoc+ Mar+et ; Indian stock markets particularly the !S2 and the AS2,
had been a preferred destination not only for the Indian investors but also for
the Foreign investors. (lthough Indian )arkets had been through tough
times due to various scams, but history shows that they recovered very fast.
)any types of scrip had been value creators for the investors. #eople have
earned fortunes from the stock markets, but there are people who have lost
everything due to incorrect timings or selection of fundamentally weak
companies.
Real Estate& %eturns are almost guaranteed because property values are
always on the rise due to a growing world population. %esidential real estate
is more than just an investment. There are more ways than ever before to
profit from real estate investment.
Mutual 'unds & There is a collection of investors in )utual funds that have
professional fund managers that invest in the stock market collectively on
behalf of investors. )utual funds offer a better route to investing in e9uities
for lay investors. ( mutual fund acts like a professional fund manager,
investing the money and passing the returns to its investors. (ll it deducts is
a management fee and its e$penses, which are declared in its offer
document.
Unit $in+ed Insurance ,lans & B*I#s are remarkably alike to mutual funds
in terms of their structure and functioning. premium payments made are
7
converted into units and a net asset value CA(@D is declared for the same. In
traditional insurance products, the sum assured is the corner stone. in B*I#s
premium payments is the key component.
"&
Need for the study!
To study the perception of the people about investment of their savings.
To understand basic re9uirement of the common man and their view
towards investment.

""
REVIE" O' $ITER-TURE
,sychology of Investments and Investors Preferences
2very individual investor must follow three principles of investing+ using a
long8term investing approach, following the right strategy to ma$imi:e the
return on investment and proper allocation of investible funds. While
applying these three principles, an individual investor has to confront hisEher
demographics, lifestyle and investment psychology. Whether the investorFs
age or occupation or family income has a role of play in making choice of
investment avenuesG Is the investor choice affected by his overconfidence,
reference group and framing of the available alternativesG The knowledge of
all these aspects is imperative for all progressive investors, researchers,
financial consultants, academicians, students and the marketer of the
financial products.
(uthor+
<r. C)rs.D Sushant Aagpal
)asics Of investment8!y <r.(.#.<ash, Sr.Faculty, #)I
In this paper he discusses the basic of investment and need for investment.
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
economys future productive capacity and, ultimately, a growth in the
"/
standard of living. !y increasing personal wealth, investing can contribute
to higher overall economic growth and prosperity.
-n Investors. re/uirements in Indian securities mar+et
!y8?.!alanaga >urunathan #ublished in <elhi !usiness review.
- reort on financial lanners in the gro%ing economy li+e India
!y8 Indian Institute of #lanning and )anagement8/&&4
"0
O)0ECTIVES O' T1E STUD2!
,RIM-R2 O)0ECTIVE
To Study the various investment avenues and the investors risk preference
towards it.
SECOND-R2 O)0ECTIVES
To find out the general demographic factors of the investors dealing in
capital market.
To find out the preference level of investors on various -apital )arket
instruments.
To find out the type of risk which are considered by the investorsG
To find out the ways through which the investors minimi:es their risk.
"1
RESE-RC1 MET1ODO$O(2
%esearch <esign
( %esearch design is purely and simply the framework of plan for a
study that guides the collection and analysis of data. The study is intended
to find the investors preference towards various investment avenues. The
study design is descriptive in nature.
TH#2 ,F %2S2(%-I8 <2S-%I#TI@2 %2S2(%-I
<escriptive study is a fact8finding investigation with ade9uate
interpretation. It is the simplest type of research and is more specific.
)ainly designed to gather descriptive information and provides
information for formulating more sophisticated studies.
Sampling <esign
Selection of study area+ The study area is in >walior.
Selection of the sample si:e+ "&&
Sampling )ethods
-onvenience method of sampling is used to collect the data from the
respondents. %esearchers or field workers have the freedom to choose
whomever they find, thus the name JconvenienceK. (bout "&& samples
were collected from >walior city and most of the respondents were
customers coming in to financial hubs and commercial comple$es.
'ormulation of the /uestionnaire
"3
Data collection
#rimary data ; collected through Structured Luestionnaire.
Secondary data ; 2arlier records from journals, maga:ines and other
sources.
Tools used for analysis
#ercentage analysis
-hi8s9uare test
?endall test
(A,@(
-orrelation (nalysis
)ultiple %esponse Table
"4
Data -nalysis and interretatrion!&
-ge of the resondent !&
Ta*le345
-ge
6 Of resondent
78&98 73
95&:8 9;
:5&38 7<
38 and a*ove
57
Total
588

Fig8 3.0
"5
% Of respondent
20-30
25%
31-40
36%
41-50
27%
50 and
above
12%
20-30
31-40
41-50
50 and above
Income (rou of the Resondent
Ta*le347! Income (rou of the Resondent
Income grou 6 of Resondent
)ello% 5 lac 97
5&3 lac ;5
3&58 lac <
58 lac and a*ove &

Fig83.1
Fig83.1
(ccording to survey most of the %espondent income group is above 5
lac+s to 3 lacs.
=ualification of the resondents!&
"6
0- 1
32%
1-5
61%
5-10
7%
0- 1
1-5
5-10
Table3.0 Lualification
Lualification Investor C'D
Iigh School 0
>raduate 16
#ost >raduate "1
#rofessional /4
Others 9
Fig83.3
Different Investment -venues!&
"7
Graduate
48%
Post
Graduate
14%
Professional
26%
Others
%
!i"h #$hool
3%
!i"h #$hool
Graduate
Post Graduate
Professional
Others

Table 3.18 Individual preference in the investment avenues
Categories 1ighly ,referred >6?
Share mar+et @
Mutual fund 5<
Insurance 7A
)an+ 7@
,roerty 5@
Total 588
Fig83.4
-nalysis!&The survey result shows that individual does not chose e9uity as
highly referred investment tool. ,nly 6' people have preference on other
investment tool.
Investment 1oriBon
/&
8%
17%
2%
28%
18%
#hare %ar&et %utual fund 'nsuran$e ban& Propert(
Ta*le 343! Tye of investment referred
Term Investment >6?
S1ORT TERM 95
$ON( TERM :8
)OT1 7A
Total 588
Fig8 3.5
-nalysis! The survey result shows that most of the people invest in
the market for long term horiBon.
Resondent %ho have invested in e/uity mar+et
/"
31
40
2
0
5
10
15
20
25
30
35
40
45
#!O)* *+), -O.G *+), /O*!
#eries1
Table3.4+ invested in the e9uity market
Hes Ao
"7 6"
-nalysis!& (ccording to survey largely population is untouched with
e9uity investment only 5A6 resondent has invested in the e9uity
market.
Resondent first source of a%areness
Table3.5+ #ercentage of %espondent first source of awareness
)ediumE channel Investor C'D
Investor friends and relative 05
(dvertisement and
hoardings
/4
!rokerage firm "4
!anks /"
-nalysis!& (ccording to survey most of the people aware about e9uity
market through the investor friends and relative4
Income invested in e/uity
//
Table 3.6 #ercentage of income invest in e9uity shares
,ercentage of income ,ercentage of investor
)elo% 36 77
3 to 586 ::
58 to 786 7<
78 to 986 ;
22
44
27
6
0
5
10
15
20
25
30
35
40
45
50
/elo0 5% 5 to 10% 10 to 20% 20 to 30%
Per$enta"e of investor
Fig83.6
-nalysis !& The survey result shows that most of the people invest in
the e9uity market 38"&' of income.
-%areness a*out Religare securities
Table 3.7 %espondent who aware about Religare
/0
Hes Ao
50' /5'

Know about Religare
73
27
1es
.o
Fig8 3.7
-nalysis!&
(ccording to the findings )ost of the people C50'D know about the
%eligare securities.
,reference for selecting *ro+ing firm
/1
Table3."&+ investor preference while selecting broking firm
-nalysis ! according to survey while selecting the broker firm people gives
first preference to brokerage charge C1/'D then other services.
/3
Category Ran+ 5
!rokerage :7
services 98
%esearch calls 5;
,thers 57
SB))(%H ,F FIA<IA>S+
From -orrelation test, it is found there e$ist a positive correlation
between the income percentage on investment and the participation
in cash market.
From ,ne Way (A,@( it is found that there is significant
difference between the annual income and the income percentage
towards investment.
From the )ultiple %esponse test, it is found that the investors who
invest around 38"&' of their investment mostly considers the market
riskC"6'D as the major risk which prevails in the market.
From the )ultiple %esponse test, it is found that the investors whose
investment is around "&' of their income, consider that the
affordable margin amount for investment in <erivatives is up to
%s"&&&&E8.
)ost of the aggressive investors are in /"81& yr. age group. They
should be concentrated as prospective clients.
/4
$IMIT-TIONS O' T1E STUD2
This is a two months study only.
<ata available was not sufficient, there was lack of availability
of data as most of it was confidential for the companies.
Sample si:e is two small.
*anguage is one of the construe during 9uestioner filling
#ortfolio re9uires the churning of proportion of investment in
each sector as well as company from time to time to give
better returns.
/5
CONC$USION
In the current scenario, investing is very important and investing in stock
markets is a major challenge ever for professionals.
The young people should start investing earlier so that they can reap the
benefits of investing in future.
#eople should keep their eye open and keep updating themselves about
various investment avenues so that they can get safe returns.
/6
References!
)arketing %esearch by > - !eri8 third edition ; M /&&&, Tata )c>raw8
Iill #ublishing -ompany *td.
Investment )anagement8 @.?. !halla.
www.nseindia.com
www.stockedge.com
www.religareonline.com
/7
=uestionnaire
". Iow did you come to know about e9uity related investmentG
CaD !rokerage firms CbD investor friends = relatives
CcD (dvertising = hoardings CdD banks
/. Which factor do you consider most important while choosing an investment optionG
CaD Iow 9uickly will I be able to increase wealthG
CbD The opportunity for steady growth
CcD The amount of monthly income the investment will generate
CdD The safety of investment principal
0. What is the investment hori:on you preferG
CaD Short term investment
CbD *ong term investment
CcD !oth

4.Please indicate your preference on the following investment avenues
-ategories Iighly
Favorable
Favorable Aeutral Bnfavorable Iighly
Bnfavorable
CaD Share )arket
CbD)utual Funds
CcD Insurance
CdD!ank <eposits
CeD #roperty

0&
3. <o you want to invest in share marketG
CaD Hes CbD Ao
IF YES THEN PLEASE ANSWER..
4. What is your percentage of your income do you invest in e9uity shares
aD !elow 3'
bD 3 ; "& '
cD "& ; /&'
dD (bove /&'
5. Iave you heard about %eligare Securities *td.G
CaD Hes CbD Ao
6. Hou are associated with which broking firmG
NNNNNNNNNNNNNNNNNNNNNNNNNNN..
7.#lease indicate your preference for selecting broking firmN.
-ategories %ank8" / 0 1 3
CaD !rokerage
CbD Services
CcD%esearch C-allsD
CdD(dditional Features

T1-NC 2OU
0"