Volume 7, Issue 4 (April, 2018) UGC APPROVED Online ISSN-2277-1166

Published by: Abhinav Publication

Abhinav National Monthly Refereed Journal of Research in
Commerce & Management
A STUDY ON INVESTORS AND THEIR BEHAVIOUR
PATTERN TOWARDS INVESTMENT WITH SPECIAL
REFERENCE TO MIDDLE-CLASS INVESTORS OF
NORTHERN REGION IN INDIA
Dr. Bhumija Chouhan1
Associate Professor
International School of Informatics and Management, Jaipur, India
Email:bhumijachouhan1@gmail.com

Sheenam Gogia2
Research Scholar
Jagannath University, Jaipur, India
Email:sheenam.gogia19@gmail.com

ABSTRACT
Investment forms an important portion of the economy as it provides returns and helps in grow of the
capital. For this, it is very essential that one should invest properly by considering all the aspects for
effective investment, it is very important to have the knowledge regarding various avenues available in
the market and risk return associated with these avenues. Thus, it has become very essential to
carefully understand the behaviour pattern of the investors mainly middle class. The present study can
be relevant to understand the attitude, behaviour and the investing patterns of the middle-class
investors in India. The study focuses on analysing the investment pattern of the Middle-class investors
of northern part of India and aspects that are considered while making investment decisions. The study
will help in identifying the investment options which the investors prefer and to adopt proper strategies
to earn good profits by various Financial Institutions.
Keywords: Utopian, Antagonistic, Gender, Social index, Social infrastructure, Grassroots

INTRODUCTION
For economic expansion, it is required to invest all the savings in a meaningful way. How much
money is invested by people out of total savings, frequency of their investments, financial instruments
in which they invest, and risk aversion shows their behaviour pattern. The investors always aim at
maximizing returns on his/her investment, along with capital protection. Investments form an
important part of the economy and lifeline of earning income. With the savings invested in various
options available to the people, the money acts as the driver for growth of the country. 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. The cost of living is simply what it cost to buy the goods
and services you need to live. The sooner one starts investing the better. By investing early, investors
allow the 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: ·

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 Abhinav National Monthly Refereed Journal of Research In
Commerce & Management
1. Invest early
2. Invest regularly
3. Invest for long term.
Thus, it is mandatory to have financial knowledge so that people can behave rationally while investing
their money. While savings are more in India, where the savings are invested is a cause for concern.
Investments by common man have been more into either bank fixed deposits, risk-free government-
backed securities and low-yielding instruments, or in non-financial assets.
Since, the middle-class households in India had gained attention towards economists, policy makers
and marketers. Therefore, it is very important to understand the behaviour of the investors and their
investment pattern investment pattern of Middle-income class group and objective of their investment
LITERATURE REVIEW
Avinash Kumar Singh (2006) studied “Investment Pattern of People" undertaken to analyse the
investment pattern of people in Bangalore city and Bhubaneswar analysis of the study was undertaken
with the help of survey conducted. After analysis and interpretation of data it is concluded that in
Bangalore investors are more aware about various investment avenues & the risk associated with that.
All the age groups give more important to invest in equity & except people those who are above 50
give important to insurance, fixed deposits and tax saving benefits.
Securities and Exchange Board of India (SEBI) and NCAER (2000) 'Survey of Indian Investors' has
reported that safety and liquidity were the primary considerations which determined the choice of an
asset. Ranked by an ascending order of risk perception fixed deposit accounts in bank were considered
very safe, followed by gold, units of UTI-US64, fixed deposits of non-government companies, mutual
funds, equity shares, and debentures.
Brown, Ivkovic, Smith, and Weisbenner (2008) found in their study that Individual’s financial
investment decisions might be stimulated by approval from peers and family and they found it easier
to learn about taking financial decisions by discussing with their friends than by using other
mechanism. Even without verbal commendation or suggestion, people observed the behavior of others
and learned in the course of interaction with them.
Funfgeld and Wang (2009) conducted a study on the financial attitude and behaviour of German-
speaking part of Switzerland on daily financial affairs. The paper revealed five underlying dimensions
on financial attitudes and behaviour, i.e. anxiety, interests in financial issues, decision styles, need for
precautionary savings and spending tendency. Moreover, gender, age, and education were found to
have significant impacts. Graham et al. (2009) have recognized that perceived expertise leads to
overconfidence among investors regarding investing their hard-earned money.
RESEARCH GAP
There are not many studies conducted and available related to the studying investors attitude towards
investment region wise in India. Most of the studies are based on secondary data which sometimes
does not provide adequate results. So present study is intended to study behavior patterns and
preference of Middle-class investors of various cities in Northern region of India.
OBJECTIVE OF THE STUDY
1. To study the behaviour of investors and the pattern of investment of middle-class of Northern
Region.
2. To know the various aspects that investors, consider while making investment.

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 Abhinav National Monthly Refereed Journal of Research In
Commerce & Management
SCOPE OF THE STUDY
The study will attempt to study the investment preferences among the middle-class families and will
help in identifying the factors which investors consider while making investment decisions.
Sample Size: 250 Respondents from cities (Delhi & Jaipur) of Northern region
Data collection: Questionnaire through Electronic mail and social media
DATA ANALYSIS AND INTERPRETATION
Age of the Respondents
Dimension Category Percentage
25 & Less 19%
Age 25-35 45%
36-54 26%
55 & above 10%

From the above table and graph it can be concluded that majority of respondent are from 25-35 years
of age. 19 percent of investors are below 25 years of age. Only 10 percent of investors belong to age
more than 55 years. A small proportion belongs to higher age group of greater than 50 years.
Education Background of the Respondents
Dimension Category Percentage
Under Graduate 6%
Education Graduate 42%
Post Graduate 48%
Others 4%

It can be concluded from the above table and graph that majority of respondents are graduate (42
percent) and post graduate (48 percent) and only 6 percent of investors are undergraduate. Hence the
result of the opinion includes perspective of all categories of investors with different education
backgrounds.
Marital Status of the Respondents
Dimension Category Percentage

Single 24%

Marital status Married 40%

Dimension Married with 36%

Child/Children

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It can be concluded from the above table and graph that majority of respondent are married (40
percent) with child responsibility (36 percent) and about 24 percent of respondents are single or
unmarried.
Occupation of the Respondents
Dimension Category Percentage

Government 16%
employee
Occupation
Private sector 54%
employee

Retired 8%

Self-employed 22%

From the graph, it is seen that a large proportion (54 percent) of sample in engaged in private sector
organization. Out of the total sample, about 16 percent have government job. 22 percent are self-
employed and only 8 percent belong to retired class.
Annual Income

Dimension Category Percentage

90,000 – 2, 00,000 8%
Annual Income 2.00.00-5, 00,000 33%
5, 00,000-10, 00,000 45%
10,00,000 & above 14%

Above data revealed that a large proportion (45 percent) of sample belong to 5-10 LPA group. 33
percent of investors have 2-5 LPA income. Only, 14 percent belong to higher income group of 10 LPA
and above income group

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Time period of investment
Period of investment Percentage

Long -term (more than 5 years) 23%

Medium (1-5 years) 58%

Short-term (less than one year) 19%

Grand Total 100%

It revealed that a large proportion of investor like to invest for medium time period of 1-5 year
followed by short term investment plan (less than one y )
Risk-Return pattern

Risk-Return Pattern Percentage

Low risk - High return 59%

High risk - High return 35%

Low risk-Low return 5%

High risk- Low return 1%

Grand Total 100%

From the table, it revealed that a large proportion of investors of northern region like to invest in Low
risk - High return investment option (59 percent). 35 percent of investors desire to invest in High risk -
High return portfolio
Preference of the investment
Rank North Percent

1 Fixed Deposits 15%

2 Savings account 15%

3 Public Provident fund 11%

4 Life Insurance 11%

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 Abhinav National Monthly Refereed Journal of Research In
Commerce & Management
5 Mutual funds 11%

6 Government securities 8%

7 Real Estate 8%

8 Gold/Silver 7%

9 Post office savings 7%

10 Chit funds 6%

11 Debentures 11%

From the above table, it can be concluded that for the north region investor’s top 5 most popular
avenues for investments are Fixed Deposits, Savings, Life Insurance, PPF and Mutual funds. Investors
of this region give more preference to fixed deposits and saving account as, they are safe form of
investment.
Factors considered for making investment decision
Reasons Percentage

Returns they provide 42%

Future growth 31%

Risk involved 15%

Past performance 7%

Others 5%

Grand Total 100%

From the above table, most of the investor’s investment decisions depend on the return they provide
and future growth. 15 percent of investors believe that their decision depends on risk involved in the
investment. 7 percent believe on the past performance of the investment options.
Level of Investment experience
Reasons Percentage

Moderate (Comfortable with Fixed deposits, post office

savings) 55%

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Knowledgeable (Bought or sold individual shares, bonds) 29%

Beginner (No investment experience) 9%

Experienced (Frequently trading in shares, commodities etc) 7%

Grand Total 100%

Table and graph revealed that a majority of investors consider themselves to have a moderate
experience in investment decisions (55%), which mean that they are comfortable with fixed deposits,
post office savings. 29 percent of respondents judge themselves as Knowledgeable as they possess
experience in buying and selling shares, bonds. Only 7 percent investor considered as experienced in
frequently trading in shares, commodities etc.
FINDINGS
The major findings from the study were that Respondent have shown positive attitude towards the
Investment. Majority of the respondents who preferred investment are between 25-35 years of age and
are post graduates. The Middle-class Investors of northern part of India mostly preferred Fixed
Deposits, Savings and Life Insurance for Investment. The reason for selecting these avenues have
found to be for High return and future growth. The main objective of doing Investment by the
Investors is to meet future expenses and for tax saving purpose. This shows that Respondents mostly
preferred low risk and safe avenues.
CONCLUSION
Investing decisions are supposed to be rationally decided on real bases and is very necessary for the
investors to invest all savings in a meaningful way, and then only returns are possible. It is concluded
from the study that Investors prefer safe and secured investment avenues in order to earn returns and
save tax. The investment is generally done to save taxes and meet future expenses. The Middle-class
investors of Northern Part of India mostly preferred are Fixed deposits, Life Insurance, Public
provident Fund for investing their money. Thus, Savings and investment should be properly planned
for each year in order to meet the investment objectives. It is necessary to invest all the savings in a
meaningful way in order to maximize returns on the investment.
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