- PROJECT REPORT -

[Submitted for the degree of B.COM(HONS.) in Accounting & Finance under

the University of Calcutta]

STOCK MARKET V/S MUTUAL FUNDS:

Tracing the Investment Pulse of Young Investors

SUBMITTED BY:
NAME: NIBEDITA SAHA
NAME OF COLLEGE: SIVANATH SASTRI COLLEGE
COLLEGE ROLL NO.: 221040
CU ROLL NO.: 221047-11-0159
CU REGN NO.: 047-1211-0448-22

SUPERVISED BY:
NAME OF SUPERVISOR: PROF. RAJYASRI CHAKRABORTY
NAME OF COLLEGE: SIVANATH SASTRI COLLEGE

1|Page
 SUPERVISOR’S CERTIFICATE

This is to certify that Nibedita Saha, a student of B.COM(Hons.) in Accounting & Finance of

Sivanath Sastri College under Calcutta University has worked under my supervision and

guidance for her project work and prepared a Project Report with the title “STOCK MARKET

V/S MUTUAL FUNDS: Tracing the Investment Pulse of Young Investors”.

The project report, submitted by her is her genuine and original work to the best of my

knowledge.

PLACE: Kolkata SIGNATURE:

DATE: NAME OF SUPERVISOR: Rajyasri Chakraborty

DESIGNATION: Faculty In Commerce

(Govt. Approved)

NAME OF COLLEGE: Sivanath Sastri College

2|Page
 STUDENT’S DECLARATION

I, Nibedita Saha, hereby declare that the following project with the title “STOCK MARKET

V/S MUTUAL FUNDS: Tracing the Investment Pulse of Young Investors”, submitted by me

for the partial fulfillment of my B.COM(HONS.) degree in Accounting & Finance under the

University of Calcutta is my original work and has not been submitted earlier to any other

University/Institution for the fulfillment of the requirement for any course of study.

I also declare that no chapter of this manuscript in whole or in part has been incorporated from

any earlier work done by others or by me. However, extracts of any literature which has been

used for this report has been duly acknowledged providing details of such literature in reference.

PLACE: Kolkata SIGNATURE:

DATE: NAME OF SUPERVISOR: Nibedita Saha

ADDRESS: B/60, Lake Gardens, Kolkata-700033

CU REGN NO.: 047-1211-0448-22

CU ROLL NO.: 221047-11-0159

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 ACKNOWLEDGEMENT

I would like to express my sincere gratitude to everyone who supported and guided me throughout
the completion of my project titled “Stock Market vs Mutual Funds: Tracing the Investment Pulse
of Young Investors”.

First and foremost, I extend my heartfelt thanks to my project supervisor, Prof. Rajyasri
Chakraborty, for her continuous support, insightful feedback, and valuable guidance throughout
the course of this research. Her mentorship has played a crucial role in shaping this project and
enhancing its quality.

I would also like to express my appreciation to the faculty and administration of Sivanath Sastri
College, affiliated with the University of Calcutta, for providing the academic framework and
resources that enabled me to undertake this project successfully.

A special thanks to all the respondents who participated in the survey and shared their views and
experiences. Their contributions formed the core of the primary data and enriched the findings of
this study.

This project has been a significant milestone in my academic journey. It not only deepened my
understanding of the Indian financial markets and investor behaviour but also helped me develop
practical research skills, data analysis abilities, and a more structured approach to problem-solving.

Lastly, I am deeply grateful to my family and friends for their constant encouragement, emotional
support, and patience during the entire research process.

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 INDEX

SL
CHAPTER TOPICS PAGE NO.
NO.
7
1.1 Background of Study
7
1.2 Justification of Study
8-11
1.3 Review of Literature
I INTRODUCTION
12
1.4 Objectives of Study
12-13
1.5 Research Methodology
14
1.6 Limitations of Study
16-17
2.1 Overview of Stock Market
18-19
2.2 Overview of Mutual Funds
CONCEPTUAL
FRAMEWORK IN 20
2.3 National Scenario
II NATIONAL &
INTERNATIONAL 20-21
SCENARIO 2.4 International Scenario
2.5 Comparison of Equity 21-26
Mutual Fund Inflows and NSE
Stock Market Turnover
28-44
3.1 Primary Data Analysis
DATA ANALYSIS &
III
FINDINGS 45
3.2 Findings
47
4.1 Conclusion
CONCLUSION &
IV
RECOMMENDATION 48
4.2 Recommendation
49
V BIBLIOGRAPHY
50-54
VI QUESTIONNAIRE

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 CHAPTER I: INTRODUCTION

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1.1 BACKGROUND OF STUDY

In today’s fast-paced and digitally connected world, the investment landscape has witnessed a
significant transformation. Among the most active participants in this shift are young investors—
individuals typically aged between 18 to 40—who are increasingly engaging with financial
markets through mobile apps, online platforms, and social media. The democratization of
investment tools and the widespread availability of financial information have empowered youth
to take control of their financial futures at an earlier stage than previous generations.

Two of the most prominent investment avenues capturing their attention are the stock market and
mutual funds. While the stock market provides direct ownership of shares and the potential for
high returns, it also comes with greater risk and volatility. On the other hand, mutual funds offer a
more managed, diversified, and relatively lower-risk alternative, which may appeal to those with
limited financial knowledge or a lower risk appetite.

By analysing primary data collected through a structured survey, this research seeks to uncover
the key drivers behind their decisions, the extent of their financial awareness, and the factors that
could further influence their investment journeys.

1.2 JUSTIFICATION OF STUDY

With growing financial awareness and easy access to digital platforms, young investors are
entering the investment space earlier and more actively. Among the most popular options they
explore are the stock market and mutual funds—each offering distinct levels of risk, return, and
involvement.

This study is relevant and timely for several reasons:

1. Emerging Trends: Young investors are shaping new patterns in investment behaviour,
influenced by fintech, social media, and digital tools.

2. Risk and Financial Planning: Understanding their preference between stocks and mutual
funds reveals insights into their risk appetite and financial goals.
3. Financial Literacy Needs: Highlighting gaps in knowledge can help design better
financial education targeted at the youth.

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1.3 REVIEW OF LITERATURE

Financial awareness and digital access have significantly shaped the investment habits of young
individuals aged 18 to 35. With increased exposure to financial content, many are turning to the
stock market and mutual funds to build wealth. While the stock market offers higher returns and
control, it demands greater knowledge and risk tolerance. Mutual funds, on the other hand, provide
professional management and lower risk. This review explores existing research to understand
young investors' preferences between the two and the factors influencing their choices.

1. “Significant Percentage of Young Adults Prefer to Invest in Stocks Directly

Rather Than MFs: Report”

Author: PTI

Published: November 11, 2024

A report by Fin One, an initiative of Angel One Ltd, indicates that 58% of young Indian investors
currently invest in stocks, while 39% favor mutual funds & 93% of young adults are consistent
savers, with the majority saving 20-30 per cent of their monthly income. Additionally, stocks have
emerged as the preferred investment choice, with 45 per cent of respondents favoring them over
more traditional options such as fixed deposits or gold.

2. “How Young Indians Are Saving and Investing in 2024: Stocks Surge Ahead
of Mutual Funds as Top Investment Choice”

Author: Livemint

Published: November 16, 2024

According to the Fin One: Young Indians’ Saving Habits Outlook 2024, 58% of young Indian
investors prefer stocks, while 39% opt for mutual funds. Safer options like fixed deposits (22%)
and recurring deposits (26%) see relatively lower adoption. This indicates a balanced approach
between high returns and stable savings among the youth. The report underscores a shift towards

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stock investments among the youth, influenced by digital platforms and financial literacy
initiatives. It also highlights that with 62%, YouTube is a primary source of education for savings
and financial planning among those surveyed. Family and friends remain the secondary source of
financial education for 52% of youth, surpassing popular finance influencers.

3. "Warren Buffett's Advice to First-Time Investors: Stock Picking Is Hard,

Buy an Index Fund"

Author: Morningstar India

Published: June 28, 2021

Warren Buffett emphasizes that most individual investors would benefit more from purchasing
low-cost index funds over attempting to pick individual stocks. He highlights the importance of
diversification, patience, and minimizing fees, suggesting that passive investing is a practical
approach for those new to the market.

4. “Stocks vs Mutual Funds: What Does Gen Z Prefer?”

Author: Poonam Behura

Published: November 14, 2024

This article highlights a Nielsen report indicating that 58% of Gen Z investors in India now invest
in stocks, compared to 39% in mutual funds. The preference for stocks is attributed to the pursuit
of higher returns and the accessibility provided by digital trading platforms.

5. “How Buffett and Munger Helped Americans Become Savvy Investors”

Author: New York Post

Published: January 18, 2025

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 Warren Buffett and Charlie Munger have significantly influenced American investment strategies
through their leadership at Berkshire Hathaway. For decades, the company’s Annual General
Meeting (AGM) of shareholders in Omaha became a must-see event, as it offers insights into
identifying promising investments and emphasize the importance of simplicity and adaptability in
investing. “What you formerly knew is never enough [in investing],” Munger told the 2018
meeting. “If you don’t learn to constantly revise your earlier conclusions and get better, you’re
like a one-legged man in an ass-kicking contest. “You have to get up each morning and try and go
to bed that night a little wiser than you were when you got up,” he said.

6. “Index Funds Are the Go-To Choice for India's Young Investors, Shows
Survey”

Author: Sunaina Chadha

Published: November 13, 2024

A survey by Motilal Oswal Asset Management Company reveals that 46-48% of investors under
43 favor index funds, reflecting a growing inclination towards passive investment strategies among
younger demographics seeking diversified and cost-effective investment options. Sectoral indices
remain a top choice among Index funds, with a marked preference for Indian sectoral indices over
commodities and smart beta funds among younger and middle-aged investors.

7. “Peter Lynch's Timeless Investment Wisdom for Modern Investors”

Author: Value Research

Published: August 2024

Peter Lynch's investment principles, such as "invest in what you know," remain relevant today.
His approach encourages investors to focus on understanding businesses and spotting opportunities
in everyday life, promoting long-term investment strategies over short-term market speculation.

8. “Why the Young Would Rather Buy Stocks Than Invest in Mutual Funds”

Author: Squirrels' Data Intelligence

Published: November 12, 2024

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 The article explores reasons behind young adults' preference for direct stock investments over
mutual funds, citing factors such as the pursuit of higher returns, greater control over investments,
and the influence of digital trading platforms. It highlights the significance of digital platforms and
technology, with 68% of respondents regularly employing automated savings tools, emphasizing
the growing influence of fintech on the financial practices of India's younger generation.

9. “Youngsters Prefer Mutual Funds Over Insurance and Fixed Deposits for
Retirement Planning”

Author: Anshul

Published: October 31, 2023

A survey by Bajaj Capital indicates that 75% of young investors in India prefer mutual funds for
retirement planning over traditional options like insurance and fixed deposits, reflecting a shift
towards market-linked investment instruments among the youth.

10. “4 Surprising Ways Gen Z Is Investing Differently Than Older Generations”

Author: Investopedia Staff

Published: February 2025

The article discusses how Gen Z investors are transforming investment practices by starting earlier,
utilizing digital platforms, and favoring assets like cryptocurrency and stocks over traditional
investment vehicles, indicating a significant shift in investment behavior compared to older
generations. More than half (56%) of U.S. Gen-Zers, aged 18 to 25, own at least some investments,
according to a 2022 survey conducted by the FINRA Investor Education Foundation and CFA
Institute. And they're getting an earlier start with investing compared to previous generations. Gen
Z started investing at age 19 on average, compared to age 25 for millennials, age 32 for Gen X,
and age 35 for baby boomers, according to a 2024 survey by Charles Schwab.

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1.4 OBJECTIVES OF STUDY

The key objectives of this research work have been enlisted below:

➢ To examine the investment preferences of young investors between the stock market and
mutual funds and identify the key motivators behind their choices.
➢ To analyze the level of awareness, knowledge, and confidence young investors possess
when engaging with mutual funds and direct equity markets.
➢ To assess the perceived risks, expected returns, and liquidity concerns that influence
young investors’ attitudes toward both asset classes.
➢ To study the influence of financial literacy, academic background, and professional
exposure on the investment decision-making process.
➢ To compare the short-term versus long-term investment outlook among young
individuals regarding mutual funds and stocks.
➢ To explore behavioral trends and psychological factors, such as risk appetite, herd
behavior, and fear of missing out (FOMO), that may impact their investment preference.

In conclusion, the study aims to bridge the gap between investor perception and actual financial
behavior, ultimately contributing to a deeper understanding of how and why the younger
generation navigates the modern investment landscape.

1.5 RESEARCH METHODOLOGY

4.1 Research Design

The study adopts a descriptive research design, aimed at understanding the investment preferences,
perceptions, and behaviours of young investors when choosing between stock markets and mutual

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funds. It explores patterns and factors influencing investment decisions among individuals aged
18–40.

4.2 Nature of the Study

This is a quantitative and qualitative study, based primarily on primary data collection through a
structured questionnaire, supported by secondary data from credible financial publications,
institutional reports, and online platforms.

4.3 Data Collection Method

• Primary Data: Collected through a self-administered online questionnaire circulated

among respondents aged 18–40. The questionnaire included both close-ended questions
(multiple choice, Likert scale) and open-ended questions to gather deeper insights.

• Secondary Data: Sourced from reports by financial institutions (e.g., SEBI, AMFI,
Zerodha), articles, investment platforms, and academic journals to support the comparative
analysis.

4.4 Sampling Method

A non-probability convenience sampling technique was used, targeting students, early

professionals, and young adults. A total of 50 responses were collected, ensuring adequate
representation within the selected age range.

4.5 Tools of Analysis

• Descriptive Statistics (percentages, frequencies) were used to analyse demographic and

categorical responses.

• Bar charts and tables were used for visual representation.

• Qualitative content analysis was applied to open-ended responses to extract common

themes and suggestions.

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1.6 LIMITATION OF STUDY

While this research aims to provide valuable insights into young investors' preferences between
stock markets and mutual funds, it is subject to certain limitations:

1. Limited Sample Size: The study is based on responses collected through a convenience
sampling method, which may not fully represent the broader population of young
investors across different regions and backgrounds.
2. Geographical Constraints: Most respondents are likely to be from similar educational
or social environments, limiting the geographical diversity and potentially influencing the
findings.
3. Self-Reported Data: The accuracy of the data depends on the honesty and awareness
level of the respondents. There is a possibility of biased or uninformed responses.
4. Short Time Frame: The study is conducted over a relatively short period, which may not
account for evolving trends or long-term behavioral patterns in investing.
5. Dynamic Nature of Financial Markets: Stock market and mutual fund performances
are subject to constant change due to economic, political, and global factors. This makes
it difficult to generalize findings over a longer term.

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 CHAPTER II: CONCEPTUAL
FRAMEWORK IN NATIONAL &
INTERNATIONAL SCENARIO

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2.1 OVERVIEW OF STOCK MARKET

2.1.1 Introduction
The stock market is a dynamic and integral component of the financial system that enables
companies to raise capital and investors to allocate funds toward productive uses. Functioning as
a barometer of economic activity, the stock market reflects investor sentiment, macroeconomic
conditions, and corporate performance. It facilitates the transfer of funds from savers to borrowers,
encourages efficient allocation of resources, and fosters economic growth.

2.1.2 Historical Development

• 17th Century: The Amsterdam Stock Exchange (1602) by the Dutch East India Company
is considered the first modern stock exchange.

• 19th Century: Establishment of major exchanges like the New York Stock Exchange
(NYSE) and London Stock Exchange (LSE) formalized equity trading and broadened
public participation.

• 20th Century: Landmark events such as the 1929 stock market crash, growth of
institutional investing, and deregulation (e.g., Glass-Steagall repeal) significantly
transformed markets.

• 21st Century: Advances in technology, algorithmic trading, and digital platforms

democratized investing; major events like the 2008 Global Financial Crisis and COVID-
19 crash influenced investor behavior and regulation.

2.1.3 Core Functions of the Stock Market

The stock market serves several essential functions in the financial ecosystem:

➢ Capital Formation

• Allows companies to raise long-term capital by issuing equity.

• Facilitates the growth of industries, job creation, and infrastructure development.
• Reduces reliance on debt financing, thus enhancing financial stability.

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 ➢ Liquidity Provision

• Offers a platform for the continuous buying and selling of securities.

• Reduces transaction costs and entry/exit barriers for investors.
• Improves price efficiency and investor confidence.

➢ Price Discovery

• Stock prices reflect collective investor beliefs about a company’s future earnings.
• Incorporates real-time information from financial reports, news, and economic data.
• Critical for decision-making by investors, regulators, and policymakers.

➢ Risk Diversification

• Enables investors to diversify across sectors, geographies, and asset classes.

• Facilitates risk-adjusted returns, guided by portfolio optimization strategies.
• Spurs the development of financial instruments like ETFs, derivatives, and REITs.

2.1.4 Market Structure and Participants

2.1.4.1 Primary Market

• Involves the issuance of new securities through Initial Public Offerings (IPOs) or Follow-
on Public Offerings (FPOs).
• Acts as a direct conduit between firms and investors.
• Pricing is influenced by book-building, underwriter analysis, and investor appetite.

2.1.4.2 Secondary Market

• Facilitates trading of existing shares.

• Key exchanges include the NYSE, NASDAQ, LSE, and Tokyo Stock Exchange.
• Liquidity, volume, and volatility here significantly affect price behaviour.

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2.2 OVERVIEW OF MUTUAL FUNDS

2.2.1 Introduction
Mutual funds are pooled investment vehicles that allow investors—especially individuals—to gain
exposure to diversified portfolios managed by professional asset managers. They play a critical
role in democratizing finance, promoting capital market participation, and fostering financial
inclusion. From retail to institutional investors, mutual funds offer a cost-effective, regulated, and
scalable solution for asset allocation across various instruments including equities, bonds, and
money markets.

2.2.2 Historical Development

• 18th Century Origins: The first pooled investment scheme was created in the Netherlands
in 1774.
• 1924: Launch of the first modern mutual fund in the U.S., the Massachusetts Investors
Trust.
• 1970s–1990s: Emergence of innovations such as index funds (e.g., Vanguard), money
market funds, and the rise of 401(k) retirement plans in the U.S.
• 2000s–Present: Introduction of ETFs, algorithm-driven fund management, and ESG-
themed mutual funds.
• 1963 (India): Establishment of the Unit Trust of India (UTI), marking the start of the
Indian mutual fund industry under government and RBI collaboration.
• Post-1980s (India): Industry liberalization with entry of public and private sector funds,
bolstered by SEBI regulations in the 1990s to improve transparency and investor
confidence.

2.2.3 Core Functions and Advantages

Mutual funds offer numerous benefits that make them attractive to a wide range of investors:

➢ Professional Management

• Managed by certified fund managers or investment committees with specialized

knowledge.
• Active or passive strategies used to align with fund objectives.

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 ➢ Liquidity

• Open-end mutual funds allow redemption at Net Asset Value (NAV) on any trading day.
• Enhances accessibility and flexibility for investors.

➢ Economies of Scale

• Large pool of funds leads to lower transaction costs and better pricing in markets.
• Reduced management fees compared to individual investment management.

2.2.4 Classification of Mutual Funds

Mutual funds are categorized based on structure, asset class, investment objectives, and
management style:

2.2.4.1 By Structure

• Open-Ended Funds: Unlimited shares, bought/sold at NAV.

• Closed-Ended Funds: Fixed capital, traded on exchanges like stocks.
• Interval Funds: Periodic redemption windows.

2.2.4.2 By Asset Class

• Equity Funds: Invest primarily in stocks; high return potential, high risk.
• Debt Funds: Invest in bonds, government securities, and debentures.
• Hybrid Funds: Mix of equity and debt to balance risk and return.
• Money Market Funds: Short-term, low-risk investments like T-bills.

2.2.4.3 By Investment Objective

• Growth Funds: Capital appreciation over time.

• Income Funds: Regular income through dividends or interest.
• Balanced Funds: Stability through diversification.
• Index Funds: Replicate performance of market indices (e.g., S&P 500).

2.2.4.4 By Management Style

• Actively Managed Funds: Seek to outperform the market through research and timing.
• Passively Managed Funds: Mirror market indices with lower turnover and fees.

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2.3 NATIONAL SCENARIO: Investment Preferences of Young
Investors of India

In recent years, young Indian investors have shifted from traditional assets like fixed deposits,
gold, and real estate toward market-linked investments such as stocks and mutual funds, driven by
digitization and increased financial literacy. Mobile trading apps, fintech platforms, and
government initiatives have made investing more accessible and attractive to millennials and Gen
Z.

Retail participation in the stock market has surged, with over 40% of new demat accounts opened
by individuals aged 18–30. Mutual funds, especially through Systematic Investment Plans (SIPs),
have also seen rapid growth, favored for their structured approach and risk mitigation.

Young investors today exhibit a more risk-tolerant mindset compared to previous generations,
seeking higher growth opportunities. Regulatory support from SEBI and AMFI, alongside
awareness campaigns like “Mutual Funds Sahi Hai,” has bolstered investor confidence and
education.

Conclusion

The national investment landscape in India is undergoing a youth-led transformation. Both the
stock market and mutual funds are emerging as preferred choices, each catering to different
investor profiles within the younger generation. While direct equity appeals to those with higher
risk tolerance and market knowledge, mutual funds serve as a balanced vehicle for those seeking
professional management and diversification. Understanding this evolving investment pulse is
essential for policymakers, financial advisors, and institutions aiming to foster long-term financial
inclusion and wealth creation in India.

2.4 INTERNATIONAL SCENARIO: Investment Preferences of Young

Investors Globally

Young investors worldwide are increasingly active in stock markets and mutual funds, driven by
digital platforms and changing financial goals. Millennials and Gen Z use online trading apps
offering commission-free trades and fractional shares, heavily influenced by social media.

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Mutual funds and ETFs remain key for long-term wealth building, with preferences for index,
ESG-themed, and target-date funds, often accessed via robo-advisors. Globally, young investors
favor low-cost, passive investing combined with selective higher-risk stocks, emphasizing
sustainability and thematic sectors.

Fintech innovations have democratized investing access, while regulators enhance protections and
education to support this growing, tech-savvy generation.

Conclusion

Internationally, young investors are at the forefront of a dynamic shift in investment culture. While
the stock market offers them autonomy and rapid growth opportunities, mutual funds provide a
more guided and diversified path toward long-term financial security. The choice between the two
often depends on factors such as financial knowledge, access to technology, income levels, and
individual goals. As global markets become increasingly interconnected and digitally driven,
understanding the cross-country trends in youth investment preferences is crucial for developing
inclusive and adaptive financial systems.

2.5 Comparison of Equity Mutual Fund Inflows and NSE Stock

Market Turnover in India from April 2024 to March 2025:

Equity Mutual Fund Inflows (₹ Crore)

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 SIP NOTABLE
MONTH NET INFLOWS
CONTRIBUTIONS HIGHLIGHTS

Data not Inflows declined 16%

Apr 18,917
available from March 2024.
2024

Record high inflows,

Data not
May 34,697 driven by
available
2024 sectoral/thematic funds.

Data not Data not _

Jun
available available
2024
Data not Data not _
Jul
available available
2024
Data not Data not _
Aug
available available
2024
Data not Data not _
Sep
available available
2024

Inflows declined by
Data not
Oct 16,863 50.99% from September
available
2024 2024.

Inflows increased by
Data not
Nov 35,943 113.11% from October
available
2024 2024.

SIP contributions crossed

Dec ₹26,000 crore for the first
41,156 26,459
2024 time.

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 Inflows declined by
Data not 3.56% from December
Jan 39,688
available 2024.
2025

Inflows declined by
Data not 26.19% from January
Feb 29,303
available 2025.
2025

SIP contributions grew by

Mar 25,082 25,926 34.53% year-on-year.
2025
SIP contributions hit a
Apr 24,269 26,632 record high.
2025

NSE Stock Market Turnover (₹ Crore)

NSE EQUITY NOTABLE HIGHLIGHTS

MONTH TURNOVER
_
Data not available
Apr 2024
_
Data not available
May 2024

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 All-time high monthly
1,602,690 turnover.
Jun 2024

_
1,535,407
Jul 2024
_
1,380,676
Aug 2024
_
1,311,066
Sep 2024
_
1,535,320
Oct 2024
Significant increase in
3,915,075 turnover.
Nov 2024

Continued growth in turnover.

4,399,879
Dec 2024
Peak turnover observed.
4,540,780
Jan 2025
Slight decline from January
4,150,759 2025.
Feb 2025

_
Data not available
Mar 2025

Note: The above data is compiled from publicly available sources, including AMFI and
Moneycontrol. Some months may have missing data due to unavailability in the cited sources.

Comparative Conclusive Analysis: Mutual Funds vs Stock Market (Apr

2024 – Apr 2025)

1. Investment Trends & Volatility

• Mutual Funds displayed a more stable yet selective growth pattern. Peaks occurred in May,
November, and December 2024, showing investor confidence during specific windows,
possibly driven by thematic funds and SIP campaigns.
• Stock Market Turnover, on the other hand, experienced a sharp and continuous surge from
October 2024 to January 2025, peaking in January 2025, indicating high volatility and
active trading—a sign of intensified speculative or short-term participation.

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 Inference:

Mutual funds attracted more long-term, risk-averse investors, while the stock market catered to

short-term, active participants responding to market conditions.

2. Participation Type: Passive vs Active

• Mutual fund investments, especially SIPs, reflect systematic and disciplined investing
behaviour, appealing to young investors seeking guided wealth creation without daily
market monitoring.
• The surge in NSE turnover suggests frequent and high-volume trading, pointing to the
presence of experienced or speculative investors who are more market-savvy.

Inference:

Young investors new to finance likely preferred mutual funds, while experienced or risk-

tolerant youth engaged more directly in the stock market.

3. Response to Market Conditions

• Mutual Fund inflows declined post-January 2025, possibly due to market saturation or
valuation concerns.
• In contrast, stock turnover remained high until February 2025, reflecting extended interest
in active trading despite market corrections.

Inference:

Mutual funds show cautious, reactive investor behaviour, while stock market participants

demonstrate greater risk appetite and momentum-chasing behaviour.

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4. Accessibility and Appeal

• Mutual funds, with SIPs starting from ₹500/month, are more accessible to students and
first-time earners. Their simplicity and professional management make them popular
among young investors looking for convenience.
• Stock market investing requires market knowledge, timing, and emotional discipline,
which may be less appealing to beginners despite offering higher potential returns.

Inference:

Mutual funds are the preferred choice for young investors beginning their financial journey,

whereas the stock market attracts those willing to learn and actively manage their investments.

Conclusion

The analysis reveals a divergence in investment preferences among young investors:

• Mutual Funds are favoured for their low risk, ease of investment, and professional
management, making them ideal for long-term goals and beginners.
• The Stock Market appeals to risk-tolerant individuals seeking greater returns and control,
though it requires active involvement and higher knowledge.

Overall, mutual funds may be the preferred investment vehicle for the majority of young
investors, but a significant and growing segment is also exploring direct stock market investments,
especially during bullish phases.

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 CHAPTER III: DATA ANALYSIS &
FINDINGS

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3.1 PRIMARY DATA ANALYSIS

This section analyzes primary data gathered through a structured questionnaire targeting young
investors aged 18–40. The survey explored factors such as risk appetite, return expectations,
investment knowledge, and platform preferences in choosing between stocks and mutual funds.
Descriptive statistics and visual tools like charts and graphs were used to interpret the responses.
The findings provide key insights into the investment behavior and decision-making patterns of
youth investors, forming a solid foundation for comparison and conclusions in this study.

BASIC INFORMATION

3.1.1 AGE

TABLE: Classification of respondents based on age

AGE GROUP RESPONSES PERCENTAGE (%)

Under 18 1 12
18-25 41 82
25-30 6 4
Above 30 2 2

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INTERPRETATION
The data reveals that the majority of respondents (82%) fall within the 18–25 age group, indicating
a strong representation of young adults in the study. This aligns well with the research objective
of understanding the investment behavior of young investors. A smaller proportion belongs to the
25–30 age group (12%), while only 4% are above 30 and 2% are under 18. This suggests that the
findings will primarily reflect the perspectives, preferences, and financial attitudes of individuals
in their early adulthood, who are at a critical stage of beginning their investment journeys.

3.1.2 GENDER

TABLE: Classification of respondents based on Gender

GENDER RESPONSES PERCENTAGE (%)

Male 31 62
Female 19 38
Others _ _
Prefer not to say _ _

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INTERPRETATION

The gender distribution of respondents shows a higher representation of males (62%) compared to
females (38%). No respondents identified as “Others” or chose “Prefer not to say.” This indicates
a male-dominant sample, which may influence the overall findings of the study, particularly if
gender-based investment preferences or behaviors differ. However, the presence of both genders
ensures that insights reflect a balanced view, even if not perfectly proportioned.

3.1.3 EDUCATIONAL QUALIFICATION

TABLE: Classification of respondents based on Educational Qualification

EDUCATIONAL
RESPONSES PERCENTAGE (%)
QUALIFICATION
High School 6 12
Undergraduate 36 72
Postgraduate 5 10
Professional Course 1 2
Others 2 4

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INTERPRETATION

The majority of respondents (72%) are undergraduates, indicating that most participants are
currently pursuing or have recently completed their higher education. This is followed by high
school graduates (12%) and postgraduates (10%), with a minimal number from professional
courses (2%) and other educational backgrounds (4%). The data suggests that young individuals,
particularly those in their undergraduate years, are showing significant interest in investments,
aligning with the study’s objective of analysing the investment preferences of the youth.

3.1.4 Are you currently employed?

TABLE: Classification of respondents based on Employment

OPTIONS RESPONSES PERCENTAGE (%)

Yes 34 68
No 11 22
Maybe 5 10

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INTERPRETATION

The majority of respondents (68%) reported being currently employed, suggesting a stable source
of income that could potentially be directed towards investments. Meanwhile, 22% are not
employed and 10% are uncertain or engaged in part-time/irregular work. This employment
distribution highlights that a significant portion of young individuals surveyed are financially
active, which may influence their capacity and willingness to invest.

➢ INVESTMENT AWARENESS AND PREFERENCES

3.1.5 Are you aware of the following investment options?

TABLE: Classification of respondents based on Investment Awareness

INVESTMENT
RESPONSES PERCENTAGE (%)
OPTIONS
Stock Market 46 92
Mutual Funds 46 92
Fixed Deposits 41 82
Public Provident Funds 32 64
Cryptocurrency 34 68
Real Estate 39 78
Others 2 4

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INTERPRETATION

The data shows that a large majority of respondents are highly aware of mainstream investment
options, with 92% aware of both the stock market and mutual funds. Traditional instruments like
Fixed Deposits (82%) and Real Estate (78%) also enjoy significant recognition, indicating that
these remain popular and trusted avenues. Awareness of Cryptocurrency (68%) and Public
Provident Funds (64%) is relatively moderate, suggesting growing but cautious interest,
particularly in digital assets. Only 4% mentioned 'Others', implying that unconventional
investment options are either less known or less preferred among the surveyed group. Overall, the
responses reflect a well-rounded awareness of both traditional and modern investment avenues
among young investors.

3.1.6 Ideal age for an individual to start investing

TABLE: Classification of respondents based on their perception of ideal age to

start investing

AGE RESPONSES PERCENTAGE (%)

Below 18 9 18
18-25 33 66
25-30 7 14

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 Above 30 1 2

INTERPRETATION

The majority of respondents (66%) believe that the ideal age to start investing is between 18–25,
indicating a strong preference for early financial involvement once individuals attain legal
adulthood and possibly begin earning. A smaller group (18%) even suggests starting before 18,
showing growing awareness about financial literacy among teenagers. 14% consider 25–30 as the
right time, likely aligning with career stability, while only 2% prefer investing after 30,
highlighting a consensus on the importance of starting early to benefit from compounding and
long-term gains.

3.1.7 Tendency to invest in Stock Market

TABLE: Classification of respondents based on their tendency to invest in Stock

Market

OPTIONS RESPONSES PERCENTAGE (%)

Yes 26 52
No 11 22

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 Planning to 13 26

INTERPRETATION

52% of respondents have invested in the stock market, showing growing interest in direct equity.
Another 26% plan to invest, while 22% have not, likely due to risk or lack of knowledge. Overall,
78% are either investing or considering it, reflecting a positive trend.

3.1.8 Tendency to invest in Mutual Funds

TABLE: Classification of respondents based on their tendency to invest in

Mutual Funds

OPTIONS RESPONSES PERCENTAGE (%)

Yes 24 48
No 14 28
Planning to 12 24

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INTERPRETATION

Nearly half of the respondents (48%) have already invested in mutual funds, reflecting a significant
trust in professionally managed investment options. An additional 24% are planning to invest,
indicating growing popularity of mutual funds among potential investors. However, 28% have not
invested, possibly due to limited awareness, preference for other instruments, or concerns about
returns. Overall, mutual funds are a widely considered option, with 72% of respondents either
currently investing or intending to do so.

3.1.9 Preference of investments

TABLE: Classification of respondents as per their preference of investment

options

OPTIONS RESPONSES PERCENTAGE (%)

Yes 26 52
No 11 22
Planning to 13 26

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INTERPRETATION

A majority of respondents (52%) demonstrated a clear preference for investing, reflecting a

proactive approach to wealth building. Another 26% are in the planning stage, indicating growing
interest in financial investments. Meanwhile, 22% do not currently prefer investing, likely due to
risk aversion, limited awareness, or financial constraints. Overall, over three-fourths of
respondents are either actively investing or considering it, highlighting a positive trend in
investment awareness among young individuals.

➢ Reason behind such preference

• Many respondents prefer stocks due to:

o Higher potential returns.

o Greater liquidity compared to assets like real estate.

o Direct control over investments.

o Suitability for long-term growth and achieving financial goals.

o Excitement or personal interest in high-risk, high-reward options.

• Mutual funds are favoured by others because:

o They offer greater stability and are perceived as safer.

o They involve professional management and diversification.

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 o Easier entry point for beginners with limited market knowledge.

o Useful for long-term goals like retirement and education.

o Some options provide tax benefits (e.g., ELSS under Section 80C).

• A number of participants prefer both options:

o Believing in a balanced portfolio to manage risk and return.

o Recognizing that mutual funds offer stability while stocks offer growth.

o Depending on investment goals, time horizons, and market conditions.

• A few responses were undecided or humorous, reflecting:

o Lack of sufficient knowledge.

o Personal quirks or casual attitudes toward investing.

o The need for better financial education and awareness.

• Overall, the responses show a wide spectrum of attitudes, from risk-taking and growth-
oriented to safety-focused and conservative, highlighting the varying investment mindsets
of young investors.

➢ RISK & RETURN PERCEPTION

3.1.10 Risk Appetite

TABLE: Classification of respondents based on their risk appetite with regard to

investing

OPTIONS RESPONSES PERCENTAGE (%)

Very High 4 8
High 17 34

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 Moderate 25 50
Low 4 8
Very Low 0 0

INTERPRETATION

Half of the respondents (50%) exhibit a moderate risk appetite, indicating a balanced approach
toward investing—willing to take some risk but not overly aggressive. 34% have a high-risk
appetite, showing a strong willingness to accept volatility for potentially higher returns. A small
fraction (8% each) falls under low and very high-risk categories, reflecting the extremes of
cautious and aggressive investment behaviour. Notably, no respondents reported a very low risk
appetite, suggesting that most young investors are at least somewhat open to taking calculated risks
with their investments.

3.1.11 Better returns

TABLE: Classification of respondents based on their perception of yield of rate

of return from investments

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 OPTIONS RESPONSES PERCENTAGE (%)

Stock Market 30 60
Mutual Funds 10 20
Both Equally 7 14
Not Sure 3 6

INTERPRETATION

60% of respondents see the stock market as offering better returns, showing a strong preference
for equities and higher risk tolerance. 20% favour mutual funds for their managed, lower-risk
nature, while 14% view both options equally. Only 6% are unsure, indicating limited awareness.
Overall, equities are the most preferred investment choice.

3.1.12 Risk Probability

TABLE: Classification of respondents based on their perception of rate of risk

in Stock Market & Mutual funds

OPTIONS RESPONSES PERCENTAGE (%)

Stock Market 39 78

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 Mutual Funds 5 10
Both Equally 4 8
Not Sure 2 4

INTERPRETATION

78% of respondents view the stock market as riskier, highlighting its reputation for volatility. Only
10% see mutual funds as riskier, while 8% consider both equally risky. A small 4% are unsure.
Overall, the stock market is widely seen as a high-risk, high-reward option.

3.1.13 Preference of Investment horizon

TABLE: Classification of respondents based on their preferred investment

horizon

PERIODS RESPONSES PERCENTAGE (%)

Short-term (<1 year) 3 6

Mid-term (1-5 years) 30 60
Long-term (>5 years) 17 34

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INTERPRETATION

The majority of respondents (60%) prefer a mid-term investment horizon of 1 to 5 years, indicating
a balanced approach that allows for moderate growth while maintaining some liquidity. 34%
favour long-term investments exceeding 5 years, reflecting a commitment to wealth accumulation
and a tolerance for delayed returns. Only 6% prefer short-term investments of less than a year,
suggesting a limited interest in quick gains or high liquidity. Overall, the data shows a strong
inclination toward sustained investment durations, with most respondents focusing on medium to
long-term financial goals.

➢ BEHAVIORAL & INFLUENCING FACTORS

3.1.14 Sources affecting Investment decisions

TABLE: Classification of respondents based on their perception on investing

STATEMENT 1 (%) 2 (%) 3 (%) 4 (%) 5 (%)

I invest based on my
1 2 1 2 15 30 16 32 17 34
own research

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 I follow trends and
social media for 15 40.5 6 16.2 0 0 12 32.4 4 10.8
investment tips
I prefer low-risk
2 4 6 12 16 32 13 26 13 26
investment options
I feel confident in
making my own 1 2 5 10 11 22 13 26 20 40
investment decisions
I think the stock market
is too risky for beginner 3 5.6 10 18.5 13 24.1 16 29.6 12 22.2
investors

INTERPRETATION

The chart shows that most respondents rely on their own research for investment decisions, with
strong agreement levels (4 and 5). Fewer depend on trends or social media, indicating a preference
for independent judgment. Many respondents prefer low-risk investment options, reflecting
moderate risk tolerance. Confidence in making personal investment decisions is high, with strong
agreement across respondents. Additionally, a majority believe the stock market is too risky for
beginners, highlighting cautious sentiment toward market entry. Overall, the data suggests
confident yet risk-aware investors who favour self-guided decisions over external influences.

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3.1.15 Factors influencing Investment decisions

TABLE: Classification of respondents based on the influencing factors to make

investment decisions per individual

OPTIONS RESPONSES PERCENTAGE (%)

Family or Friends 9 18
Social media 5 10
Financial Advisors 9 18
News & Financial
12 24
Reports
Personal Research 15 30

INTERPRETATION

Personal research is the most influential factor for investment decisions, with 30% of respondents
relying primarily on their own analysis. News and financial reports follow at 24%, indicating a
strong dependence on credible, data-driven sources. Family or friends and financial advisors each
influence 18% of respondents, showing a balanced trust in personal networks and professional
guidance. Social media has the least influence at 10%, suggesting limited reliance on informal or
trend-based sources. Overall, the data reflects a preference for informed, independent decision-
making supported by reliable information.

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3.2 FINDINGS

Sure! Here's a shorter bullet-point version of your analysis, keeping the key insights intact:

• 82% of respondents are aged 18–25, showing strong youth interest in investing; 62% male,
38% female.

• 72% are undergraduates; 68% are employed, indicating financial independence.

• 92% are aware of both the stock market and mutual funds; 66% believe 18–25 is the ideal
age to start investing.

• 52% currently invest in stocks; 48% in mutual funds. Around 25% plan to invest soon.

• 50% have a moderate risk appetite; 34% high; very few report low or very high tolerance.

• 60% believe the stock market offers better returns; 20% prefer mutual funds; 14% see both
as equal.

• 60% prefer mid-term investments (1–5 years); 34% long-term; only 6% short-term.

• Personal research (30%) is the top decision driver, followed by news (24%) and
family/advisors (18%). Social media influences only 10%.

• 40% feel confident in investing; 34% strongly base decisions on own research.

• Many agree they prefer low-risk investments, but 52% find the stock market too risky for
beginners.

• 74% are eager to learn more about personal finance and investing.

• Key suggestions include more financial literacy programs, user-friendly apps, risk
protection, mentorship, and gamified learning.

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 CHAPTER IV: CONCLUSION &
RECOMMENDATION

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4.1 CONCLUSION

The comparative analysis of mutual funds and the stock market, supported by both primary survey

responses and secondary financial data, reveals clear trends in the investment preferences of young

investors.

Mutual funds, particularly equity-oriented and SIP-based investments, have emerged as the

preferred choice among young and first-time investors. This preference stems from their

systematic approach, lower risk exposure, ease of entry, and professional fund management, all of

which resonate with the financial goals and risk tolerance levels of young individuals.

On the other hand, the stock market has shown significantly higher turnover and volatility,

especially in the latter half of 2024 and early 2025. This indicates a strong level of activity among

seasoned or risk-tolerant investors, possibly including a small segment of young investors who are

more financially literate, confident, or speculative in nature.

Primary data collected through surveys further supports this contrast. A majority of respondents

indicated a preference for mutual funds due to their simplicity, reliability, and long-term returns,

while a smaller segment showed interest in stock trading, attracted by higher return potential and

direct control.

In conclusion, while both mutual funds and stock markets have their unique appeal, mutual funds

are currently the more popular and accessible investment avenue for the majority of young

investors in India. However, with growing financial literacy and digital access, the interest in

direct stock market participation is also expected to rise in the coming years.

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4.2 Recommendations for Financial Institutions To Better Engage
Young Investors

1. Financial Education & Awareness

• Implement structured financial education and interactive workshops at school and college
levels to teach investing basics and risk management.

• Provide practical training through simulations and hands-on tools like SIP calculators and
gamified platforms to build confidence.

• Broaden investment awareness by educating youth about diverse financial instruments

beyond popular stocks and indices.

2. Digital & Social Media Engagement

• Leverage social media platforms to share simplified and engaging content.

• Design mobile-first digital platforms and apps that are easy to navigate and informative.
• Use influencer marketing or relatable content to connect with youth in their language and
style.

3. Personalized Support & Guidance

• Provide one-on-one mentorship or advisory services for beginners.

• Encourage investors to “start small” and set personalized risk limits to avoid large losses
early.
• Offer customized plans based on age, goals, and risk appetite.

4. Risk Management & Trust Building

• Introduce risk protection mechanisms, like beginner-friendly funds with loss caps.
• Offer low-risk options like money market funds, CDs, and SIPs as entry-level products.
• Be transparent about potential risks and realistic returns to set proper expectations.
• Build trust through clear, authentic communication.

5. Community & Motivation

• Create investment communities or clubs where young investors can share experiences.
• Use peer influence and community engagement to keep interest alive and sustained.
• Celebrate success stories of young investors to inspire others.

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 CHAPTER V: BIBLIOGRAPHY

❖ Association of Mutual Funds in India (AMFI). Mutual Fund Monthly Data Reports.

Retrieved from https://www.amfiindia.com

❖ National Stock Exchange of India (NSE). Monthly Market Turnover Reports.

Retrieved from https://www.nseindia.com

❖ Zerodha. (2024). Reviewing 2024: A Year of Transitions. Retrieved from

https://zerodha.com/z-connect/business-updates/reviewing-2024-a-year-of-

transitions

❖ ET Money. (2024). Mutual Fund vs. Stocks: Which One is Right for You? Retrieved

from https://www.etmoney.com

❖ Moneycontrol. (2024). Stock Market and Mutual Fund Investment Trends Among

Young Investors. Retrieved from https://www.moneycontrol.com

❖ Economic Times. (2024). Young India’s Investing Habits: Changing Patterns in a

Digital Age. Retrieved from https://economictimes.indiatimes.com

❖ Investopedia. (n.d.). Stock Market vs. Mutual Funds: Key Differences. Retrieved from

https://www.investopedia.com

❖ Reserve Bank of India (RBI). (2024). Report on Financial Literacy and Inclusion.

Retrieved from https://www.rbi.org.in

❖ Primary Survey Data. (2025). Survey Conducted Among 18–35-Year-Old Investors

Across Kolkata via Google Forms.

❖ Upstox- www.upstox.com

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 CHAPTER VI: ANNEXTURE

QUESTIONNAIRE
Research Topic: Stock Market vs Mutual Funds: Tracing the
Investment Pulse of Young Investors

Section 1: Basic Information

1. Name:

___________________________________________________________

2. Email:

___________________________________________________________

3. Age:

• Under 18
• 18 – 21
• 22 – 25
• 26 – 30
• Above 30

4. Gender:

• Male
• Female
• Other
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 • Prefer not to say

5. Educational Qualification:

• High School
• Undergraduate
• Postgraduate
• Professional Course (CA, CFA, MBA, etc.)
• Other

6. Are you currently employed?

• Yes
• No
• Maybe

Section 2: Investment Awareness and Preferences

7. Are you aware of the following investment options? (Select all that apply)

• Stock Market
• Mutual Funds
• Fixed Deposits
• Public Provident Fund (PPF)
• Cryptocurrency
• Real Estate
• Other

8. At what age do you think an individual should ideally start investing?

• Below 18
• 18 – 21
• 22 – 25
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 • 26 – 30
• Above 30

9. Have you ever invested in the Stock Market?

• Yes
• No
• Planning to

10. Have you ever invested in Mutual Funds?

• Yes
• No
• Planning to

11. Which investment option do you prefer?

• Stock Market
• Mutual Funds
• Both
• Neither

12. Why do you prefer the selected option?

_____________________________________________________________

Section 3: Risk and Return Perception

13. How would you rate your risk appetite?

• Very High
• High
• Moderate
• Low
• Very Low
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14. In your opinion, which option offers better returns?

• Stock Market
• Mutual Funds
• Both Equally
• Not Sure

15. In your opinion, which option carries higher risk?

• Stock Market
• Mutual Funds
• Both Equally
• Not Sure

16. What is your preferred investment horizon?

• Short-term (Less than 1 year)

• Medium-term (1 to 5 years)
• Long-term (More than 5 years)

Section 4: Behavioral and Influencing Factors

17. How much do you agree with the following statements? (1 = Strongly
Disagree, 5 = Strongly Agree)
Statement 1 2 3 4 5
I invest based on my own research. ☐ ☐ ☐ ☐ ☐
I follow trends and social media for investment tips. ☐ ☐ ☐ ☐ ☐
I prefer low-risk investment options. ☐ ☐ ☐ ☐ ☐
I feel confident in making my own investment decisions. ☐ ☐ ☐ ☐ ☐
I think the stock market is too risky for beginner investors. ☐ ☐ ☐ ☐ ☐

18. What influences your investment decisions the most?

• Family or Friends
• Social Media Influencers / YouTube
• Financial Advisors
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 • News and Financial Reports
• Personal Research

Section 5: Final Thoughts

19. What suggestions would you give to financial institutions to better engage
with young investors?

_________________________________________________________________

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