.

INDEX
Chapter No. TITLE OF THE CHAPTER PAGE NO.
1 Introduction 7- 37

2 Review Of Literature
38-44

3 Research Methodology

• Objective Of Study 45-77

• Scope Of Study
• Limitations Of Study
• Data Collection, Analyses Interpretation

4 Finding, Suggestions And

78-80
Conclusion

1
 Introduction

An Avenues means investing money in something .It often referred to as investment alternatives
or investment strategies. There are numerous method to categories investing possibilities.

Surprisingly, no investment strategies can guarantee a high rate of return with no risk. Danger and reward
are proportionate in real world; that is , the greater the risk, the larger the return. It is vital , however, to
maintain a solid , long term portfolio that benefits you ,not the bank . This establishes the basis for investor
profiling.

When selecting an investing plan ,the investor’s risk tolerance should meet the product’s risk tolerance .It
is vital for an individual to recognise his for personal risk tolerance . Certain assets have the potential to
generate better inflation – adjusted returns that others but they also have a higher failure rate.

Between these two groups ,an investor should comprehend the distinction between financial and
nonfinancial assets .it encompasses both market – linked assets such as stock and mutual fund and fixed
income product such as bank fixed deposit and PPFs, the latter of which includes physical assets as gold
and real estate and more prevalent in India.

An investment is an activity of keeping aside a part of current money for future benefits . This an Investment
is a sacrifice of current money or other resources for future benefits .

There are several investment Avenues available to an investor to choose from.

One can invest money by:

o Keeping it in bank fixed deposit or o

Purchasing a long term Government bonds or
o Contributing in provident Fund or o Buying
corporate bonds or
o Purchasing equity shares of
companies or o Investing in mutual funds
scheme or o Investing in real estate or o
Investing in previous objects.

Risk and return are the crucial factors in an investment activity. The investment Avenues with higher
return are coupled with higher risk. For Example investment in equity is risky but it generates higher
returns as against bank fixed deposits where the return and risk both are lower.

2
Government also plays a significant role in regulating capital markets and safeguarding investment
Activities and investors’ interest in an economy. There are certain tax incentives given by Government to
the investors keeping in view broader objectives of growth & development of the economy.

Meaning and Definition

Definition :As per RBI definitions “ market for short term financial assets that are close substitute for money
, facilitates the exchange of money in primary and secondary market.”

Meaning :A segment of the financial market in which financial instruments with high liquidity very short
maturities are treated .(less than one year)

It does not actually deal in cash but deals with substitute of cash like trade bills, promissory note etc. which
can be converted into cash without any loss at low transaction cost.

Investment is parting with one’s fund, to be used by another entity for productive activity. It can mean
giving an advance or loan or contributing to the ownership capital or debt capital of a corporate business
unit or non corporate one.

3
 Objective of investment Avenues in Indian money market

There are four basic objectives of investment – to keep your money safe, to help your money grow
(capital growth), to develop an alternate stream of income and to be able to save on income taxes. Other
investment objectives include safeguarding your retirement phase and to support your future goals.

In this article, we you walk you through what investment is, why investment is important, why one should
invest, the most common objectives of investment,. And more.

What is investment?

An investment is an asset or an item which is acquired/purchased with the goal of generating income or
appreciation. So basically it is anything brought with the intention of multiplying it in the wrong run, the
term of its financial value. Some of the example of investment are estate , share, fixed deposits and gold
etc.

What are the major objectives of investment ?

There are 4 main objective of investment, viz. Safety , Capital Growth , Income Generation and Tax
Deduction. Let’s discuss these in detail.

Safety
By parking your funds in an investment scheme you can ensure that you do not outlive your savings. If
your primary goal is to safeguard your hard – earned money , you must invest in a guaranteed fixed –
return investment like a fixed deposit or a PPF. For employed individuals, an EPF serves the purpose in a
similar manner.

4
 Capital Growth

If your money is not growing, it is basically not an investment . That is why we have two different terms
– savings and investments. We save our money and then this saved money is invested for capital growth
,if it’s not mere savings.

To multiply your money, your investment portfolio must have some exposure high- risk option like
mutual funds , stock market, real estate and equity . With high risk possibility, you also get high return
probability – the key is to strike the right balance here!

Income Tax Deduction

Apart from the thee objectives investment discussed above , getting tax deduction is the next most popular
benefit of investment . Some of the best example of investment tax help in tax are like insurance policies
(80C for deduction on premium paid and 10(10 D ) for sum insured received ), pension plans (80CCC) and
NPS etc.

Marketability
Marketability is essential as it’s provides flexibility to Investment portfolio.

Liquidity
Liquidity is a vital objective for an investment. An investor has an objective of liquidity for investment so
as to ensure ready convertibility of investment into cash. This objective will enable him to meet
emergencies. Liquidity is desired by investors so that he can take advantage of various types of securities
and over range of companies and industries.

5
Type of investment

The following are the different types of investment available in India for a resident individual:
1. Stocks: One of the most prevalent and popular investment options is stock investing But how
does stock investing work? When you buy stock of a company, you become its shareholders.
Stock are ownership shares. Whether you profit and lose money on a stock is determined by
the company’s success or failure, the overall state of the stock market, and other factors.
2. Bonds: A bond is fixed – income security representing an investor’s debt to borrower. Buying
bonds implies that you are essentially lending money to the institution or the government. On
this loan, you get a fixed rate of interest which becomes your return on investment . The risk
factor is present in bonds as well. This risk will depend on the type of bond you buy.
3. Mutual funds: Mutual fund are essentially pools of money collected from multiple investors
and invested in various products to attain mutually agreed – upon goals. A fund manager
manages there funds.
4. Unit linked insurance plan(ULIP):ULIP is a plan sold by insurance funds that combines the
benefits of life insurance policy and investment into a single package ,unlike a traditional
insurance policy. Plus, you get to save on income tax as well. This make it a 3- way win at the
cost of one!
5. Public provident fund(PPF): PPF is a straightforward investing option which yields profitable
returns post retirement. It’s a government sponsored savings program that deposits your money
for a fixed period of time and pay you interest. Starting October 1,2018, it offers an 8% interest.
6. Fixed Deposit :Fixed deposits or popularly known as FDs are usually offered by banks and
financial institutions. FDs offer guaranteed returns and hence are the most popular investment
type in India. They have a tenure ranging between 7 days and ten years. Fixed deposit interest
rates range between 3%-7%. Moreover, senior citizens are offered additional interest on their
FD investments. The FD interest rates are higher than the savings account interest rate. The
interest payments are made monthly, quarterly, half-yearly, annually or at the time of maturity
as per investor’s choice. Investment in tax-saving FDs qualifies for tax benefits under Section
80C of the Income Tax Act, 1961. Moreover, the interest income is taxable as per the individual
investor’s income tax slab rates. If the interest income exceeds INR 40,000 per annum (INR
50,000 for senior citizens), then the bank levies a TDS of 10% (20% if PAN Card are not
disclosed).

7. Exchange-Traded Funds (ETF):The exchange-traded fund is a passive investment

option
that usually replicates the underlying index. In other words, ETFs portfolio matches the
composition of an Index in the same proportion. An exchange-traded fund mimics and tracks the
performance of the index. Hence ETFs are not actively managed by a portfolio manager.
6
 Furthermore, exchange-traded funds do not attempt to outperform their respective index. There
are different types of ETFs, for example, equity ETFs, bond ETFs, currency ETF, commodity
ETFs, etc. Also, one can easily buy or sell them on the stock market.
8. Golds: Gold has always been a go-to asset or investment for Indians. It is also an asset with
great emotional and social value. Buying gold coins, bars, biscuits, and jewellery on auspicious
days has been a tradition in India for ages now. An asset with such sentimental value has also
become popular in different forms. For example, gold bonds and gold ETFs are gaining
popularity recently.
Gold is used as a hedge to protect one’s portfolio against potential market risk. Investing in gold
doesn’t provide any regular income in the form of dividends and interest. However, it is a
relatively liquid asset and can offer inflation-beating returns.
9. Real Estate
Investing in real estate involves purchase, ownership and management of the physical
property. In other words, any investment in land, building, plant, property, etc. is considered
as real estate investment. Investors main aim of investing in real estate is to sell the asset at
a higher price in the future or generate regular income by way of rent.
Real estate investing best suits investors with a long term investment horizon. The prices of land
and property do not fluctuate a lot in the short term. Hence investors with long term goals should
look at investing in real estate. Before investing in real estate, investors have to be prudent and
do their research about the market prices and get the papers provided by the seller authenticated
by legal experts.
Real estate investing in India has shifted from owning physical property to owning a part of the
property with low investment. This is possible through REITs or Real Estate Investment Trusts.
Real Estate Investment Trusts (REIT) is an instrument with real estate properties as its
underlying assets and investors can buy a share of REIT to earn steady income in the form of
dividends. These dividends are paid from the rental income from the underlying properties.
Avenues Of Investing Money In India
There are multiple investment options to choose from in India:

I. Fixed Deposits
Fixed Deposits are regarded as one of the most popular investment in India. They provide a fixed rate of
return for a specific period and consider as a low- risk option.

Banks offer FDs. The interest rate varies from one deposit to another and changes from to time to time.
Although FDs have lock- in period ,most financial institutions permit loans and overdraft facilities against
them.

7
 II. Mutual Funds

When you invest in mutual funds, you invest in a vehicle that fools money from different investors and
channels this into diversified assets. Mutual fund schemes vary depending on the type of assets they
focus on equity funds invest in stocks, debts funds invest in fixed – income instruments, and hybrid
funds invest in both. Investors can make a lumpsum investment or direct a certain sum periodically
through systematic investment plans (SIPs) The returns you receive could depend on the fund’s
performance.

III. Recurring Deposits

Likes FDs, Recurring Deposits(RDs) allow an investor to save a specific sum in periodic instalments.
You can deposit a fixed sum Every month for a specific period with a bank. Like FDs, RDs are also low
– risk and provide guaranteed returns.

IV. Public provident Fund

The PPF is a long term savings schemes backed by the Government of India with the lock- in period of
15 years . However, PPF investment are eligible for tax deductions and are also relatively safe. The
government usually revises the PPF interest rate every quarter. Investors are also eligible for partial
withdrawals and loans against the PPF upon meeting certain conditions.

V. Employee Provident Fund

The EPF is a retirement savings scheme specially for salaried employee. Monthly contributions are made
from an employee’s salary , while the employer contributes an equivalent amount to the corpus. EPFs are
eligible for a tax deduction under section 80C of the Income Tax Act,1961 and the final amount after
maturity is tax – free.
VI. National Pension scheme
PS is a retirement pension scheme introduce the Government in India. Through regular investment you
can build a corpus that can provide you with the regular pension after retirement. Can also withdraw
from the fund partially after retirement..
VII. Stock:
Stock refer to purchasing share in company, giving the investor ownership stake. It can be profitable when
of the company grows is future . Investing in stocks the long- term aids in capital appreciation.
Short – term trading, however, can be riskier.

VIII. Real Estate

Buying property is one of the most popular investment alternatives in the country. However, a property
for self consumption should never be considered as an investment. Investment in real estate is not just
limited to housing as the segments like office, commercial real estate, warehousing, student housing,
data centers, shared spaces is also gaining traction amongst the investors.

8
Location of the property is the most important factor that affects the price of the property and rental
income that is likely to be earned. Investments in real estate deliver returns in two ways- capital
appreciation and rentals. However, unlike other asset classes, real estate is highly illiquid.

IX. Gold

It is the most traditional form of investment amongst Indians, but possessing gold in the form of jewelry
has concerns related to safety and high cost in the form of ‘making charges’. However, buying gold coins
or biscuits is still an option but gold ETF could be ranked as a more viable one. Investment in gold
papers via ETFs is more safe and cost effective.

Despite being a liquid asset class, many novice investors are cheated with ‘duplicate’ or ‘mixed’ jewelry,
if purchased without proper knowledge or from a dubious jeweler.

X. Life Insurance

Insurance plans sold as life insurance shall not be considered as investment options as they provide risk
coverage in case of any mishap. However, many Indians consider insurance as an investment. Life
insurance is an instrument for the security of life. The main objective of other investment Avenues is to
earn a return but the primary objective of life insurance is to secure our families against unfortunate
events.

All investment are not equally Important. Basic investment needs must be fulfilled before others

If we put our save money where it will grow, then that’s investing. However, there are a number of
possibilities available when we want to invest and it is not possible to make choices without having a
way to classified things.

Let us not jump into classifying investments right away. Before we do that, we need to classify our need
for making an investment. Investments can be made for a huge variety of needs. You could be saving
for emergency medical funds which are usually required at a moment’s notice. Or you could be saving
for your retirement which is a few decades away, or anything in Between.

We have created a useful framework for thinking about these investment needs by dividing them into
four levels. Each level is more fundamental than the ones that comes after it. You should satisfy the
need at each

9
level before going on to the next one.

Those who know a bit about psychology may recognise this system as being based on the ‘Hierarchy of
Needs’, a concept proposed by psychologist Abraham Maslow. Maslow’s hierarchy dealt with basic
human needs like food, shelter, etc. In the same way, human beings deal with their higher needs after
simpler ones are satisfied. Here is the Hierarchy of Investing Needs:
Level 1 – Basic contingency funds: This is the money that you may need to handle a personal
emergency. It should be available instantly, partly as physical cash and partly as funds that can be
immediately withdrawn from a bank. Online banking and ATMs make it relatively simple to get this
organized.

Level 2::Cash in a savings account, then do not buy term insurance. If you do not have term insurance, then
do not start putting away money for your daughter’s college education, and so on.

Level 3:Savings for foreseeable short-term goals: This is the money needed for expenses that you plan to
make within the next two to three years. Almost all of this should be in minimal risk Avenues.

Level 4:Savings for long-term foreseeable goals: Same as level 3, except the planned Expenses re
more than three to five years away. This level could be invested in equity and Equity-backed
investments like equity mutual funds. One could think of many levels beyond this and really, the
details matter much less than the Concept. Depending on one’s circumstances, any of the levels may
have to be modified. For Example, you may have enough income-producing assets to make
insurance relatively less Important.

However, this does not decide how much to invest towards each need. This system aims at Preventing
you from going to a higher level unless the lower one is fulfilled. If you have not put Emergency cash in

10
a savings account, then do not buy term insurance. If you do not have term Insurance, then do not start
putting away money for your daughter’s college education, and so on.

11
 Inflation has been high in India and it is important to provision for the same

It is aptly said, what compound interest gives, inflation takes away. Put it another way – inflation is

Effectively the reverse of compound interest – it’s like decompound interest.

Since each year’s inflation occurs on top of the previous year’s inflation, it means that the effect is just
like that of compound interest. Consider a situation where you invest Rs.1 lakh of your money in a
deposit which earns you 8 per cent a year. At the same time, the prices are also generally rising at the rate
of 8 per cent a year. In such a situation, your compounding returns will just about keep pace with the
inflation.

The actual amount will Increase, but what you can do with it won’t increase in line. So, for example,
over ten years your Rs.1 lakh will become Rs.2.16 lakh. However, at the same time, on an average the
things you could have bought for Rs.1 lakh will also cost Rs.2.16 lakh. In effect, the purchasing power
of your Rs.1 lakh is not what it used to be ten years ago. The rise in the amount of money you hold is
just an illusion and is completely negated by a corresponding rise in prices.

But inflation may not be so kind as to stay at the level of the interest you are earning. What if it’s more?
And what if this goes on for a very long time. Suppose your returns are 8 per cent but inflation stays at
10 per cent and twenty years go by?

Your investment would grow to Rs.4.66 lakh but things that used to cost Rs.1 lakh would now cost
Rs.6.72 lakh. Now, the purchasing power of your Rs.1 lakh is just about Rs.15,000. Your investment has
actually made you poorer though many may not have realized the same! In our country, over the past
thirty to forty years, the inflation rate has been either the same or a little bit higher than many of the
deposits that are available. Unfortunately, far too many people think of the two problems as unrelated.
12
The common problem is the inability to account for inflation. People think in nominal terms and the
future impact of inflation is awfully hard to internalise. The real solution to this is that we should become
a low- inflation economy but since that’s clearly not on the agenda, savers should mentally always adjust
for inflation.

If Rs.1 crore sounds like the kind of money you’ll want twenty years from now then you’ll actually
need to have about Rs.4 crore if inflation rises by 7% every year. If you work backwards from there,
you’ll need to save about Rs.68,000 a month if the returns are 8 per cent. By the way, if you don’t
already use it then google ‘rule of 72’, which makes quick and rough calculations of this sort easier.

That’s a depressingly large amount, but there it is, there’s no escape from the arithmetic. What that
actually tells you is that over long periods of time, you need a form of investment that’s inflation
adjusted. That equity is risky, is drummed into all investors. However, it takes just a little thinking to
figure out that inflation is riskier. And to match inflation, and to get real returns on top of that, you have
to latch on to something that goes up with inflation anyway.

This is not difficult because the value of goods, services and assets in the economy is inherently
inflation- linked, that is adjusted to inflation. And so risky or not, equity and equity-linked investments
are options that may protect you from inflation.

Why is investing better than saving?

Investments hold the key to an investor’s future. They help to bridge the gap between their dreams and
reality. Following are some of the benefits of investing*:

A. To reach your financial goals:

Be it purchasing a house or buying a car, or paying for your child’s education or marriage, or even planning
for your retirement, investing can help you to meet your financial goals and objectives.
Investing your capital is the most optimum ways to achieve your long-term goals.

B. To beat inflation:
Investing your money also helps you to beat inflation. If you choose not to invest and rather keep your
money in a regular savings account, your money’s purchasing power may decline over time due to
inflation. Thus, to insure your money’s worth, it makes sense to invest in financial products that have the
potential to fetch inflation-beating returns.

C. To earn significant returns:

Investment Avenues such as stocks or mutual funds** have the potential to fetch significantly higher returns
than a savings account or bank fixed deposits.

13
 Balancing your savings between different investments is the key
Few of the ways that an investment can make money -are by lending to someone who pays interest; by
buying shares and thus becoming part owner of a business; or buy something like gold or real estate,
which can be expected to rise in value.
EQUITY INVESTING
When you buy shares in a business, your profits and losses can be large depending on how the business
does. Buying shares makes you part owner of a business. Of course, the share is too small for you to have
any say in how the business is run, but the financial rewards are the same as any other owner.

When the business pays out part of its profits as dividend, then as part owner you get your share. When
the business becomes more valuable, the price of its shares increase and your wealth too increases.
Like any business owner, you can decide to sell off all or some of your shares or keep them for future
gains. Conversely, if the value of the shares goes down, you could lose money. If the business starts
doing very badly, you could lose a large chunk of your investment.

DEBT INVESTING

A very different form of making gains is to lend money to someone. Note that unlike shares, we didn’t
say ‘lend money to a business’. Instead we said ‘lend money to someone’. That’s because you could be
lending not just to a business, but even to a government or some other entity. When we say lending, it
includes activities that you may not normally think of as a loan.

14
Lending just means giving someone money and getting interest income in return. For example, when
you make a deposit in a bank (it could be a fixed deposit or a savings account), you are lending money
to the bank. However, the scope of gains is sharply limited compared to investing in shares. When you
lend, your gains are limited to the interest rate that the business has agreed to pay you. No matter how
successful that
business may become, you are not going to get more than that. Of course, the risks are limited too. In
most kinds of deposits, the risk of not getting your interest is rather limited. So the rewards are
predictable and so are the risks

In the third kind of investment, the risks and rewards are the easiest to understand. You buy something, if
the price goes up that’s great and if it goes down then you lose money.

In terms of actually choosing an investment from the three, the complexity is of a different scale. Equity
is more complex than the others. There are literally hundreds of companies whose shares you could buy
from the stock market and it’s not easy to make the right choices. Fortunately, there are ways of making
the right choice easily.

ASSET REBALANCING

Asset rebalancing is the most useful and yet the most ignored idea in the world of investing. However,
it’s actually quite easy to implement, especially for mutual fund investors. It is worthwhile to carefully
understand the concept and see whether it can be worked into your portfolio. Asset rebalancing means
investing with a target in mind, in terms of how much of your

Investments should be in debt and how much in equity. Since the two won’t rise in tandem, the
‘rebalancing’ part involves periodically shifting money from one to the other in order to stay on the
target. However, that’s a simplistic view. It’s far better to do this on a rule-based principle. That way,
15
you are not forced to make a subjective judgement of when is the right time to decide that a certain
percentage of your investments should be in fixed income and the rest in equity.

For younger investors, the fixed income proportion could be as low as ten per cent, but it shouldn’t be
zero. For those with a more conservative approach, it could be higher. Retirees could have another
approach. But these are just guidelines.

Asset rebalancing means that instead of seeing the equity-vs-fixed income question as a black-vs white
binary choice, you should be seeing it as a shade of grey. Once every year or so, you could ‘rebalance’
your portfolio. What this means is, if the actual balance has veered away from your desired one, you
should shift money from one to the other in order to attain the original balance.

When equity is growing faster than fixed income—which is what you would expect most of the time—
you would periodically sell some equity investments and invest the money gained from the sale in fixed
income so that the balance would be restored. When equity starts lagging, you periodically sell some of
your fixed income investments and move that money into equity.

Some readers would have seen the fly in the ointment, or rather, two flies. One is the amount of
monitoring or work required; and two, the tax implications from periodic sales and investments. Both are
easily taken care of by using a balanced fund. These funds are the most underappreciated idea in mutual
fund investing.

Balanced funds do all this automatically in a tax efficient manner. More importantly, when the equity market
Goes down, balanced funds are expected to fall too, but the fall is relatively less. While balanced funds
typically invest more than 65 per cent of their assets in equity to qualify as equity mutual funds for tax
reasons, less aggressive rebalancing options are also available. The Monthly Income Plans or MIPs
typically keep equity at less than 20 per cent or so and can be a good option for more conservative
investors looking for low equity exposure.

16
Specifying exact goals that investments must achieve is a crucial step in eventually meeting those
goals

Understanding and deciding on investment objectives is a crucial stage which many people are unable to
do. The importance of doing this well- and the pitfalls of doing it badly- are demonstrated by the
following example, which an analyst came across while studying real-world investment portfolio.

The investors were a retired couple who, despite having a good understanding of investing, were unable
to figure out whether they were on the right track for their goals. They had investments in a number of
funds, mostly equity. They also had a number of needs for which these investments were made. One,
they needed a monthly amount regularly to meet household expenses. Two, they needed emergency
funds that could be withdrawn at short notice for unforeseen uses. Three, they had some large
familyrelated expenses coming up in about three years. And four, there was the money they would need
in the long run to fund their monthly living expenses far into the future as prices rose and needs changed.

Even though this couple had chosen their funds well, they were having problems understanding whether
they were on the right track. What they needed was nothing out of the ordinary. In fact, many others have
more complex needs. Even so, it was difficult for them to be confident that their investment portfolio was
indeed the right one for the job.

But that wasn’t their fault. Understanding how an investment portfolio maps onto a set of different needs
is practically impossible. Some of the needs are contradictory. For example, the short-term income
needs require stability while for the long-term nest egg, high returns are more important. Looking at a
list of ten or more funds; with SIPs, dividends and withdrawals of varying amounts flowing in and out;
with different performance and quality levels; and different expectations of risk and returns, it is
impossible to figure out, even roughly, whether the portfolio will do the job.

So what’s the solution? Some sophisticated analytical tool that will give us an insight? No, actually, it’s
something that someone in your family probably already practices, or at least used to in the decades gone
by. The solution is bags- separate bags for each need.

Do you have a grandma in your family who used to save money by keeping it in little bags, each for a
different purpose? Lots of us do, or at least did in earlier days. Many of us know of women in the older
generation who would run her family’s entire life’s finances on this basis. They typically have little
pouches with a drawstring around its neck, like a pyjama. When the husband brings home his monthly
salary, they put some money in the vegetables pouch, some in the milk pouch, some in the household
servant’s pouch and the dhobi pouch and so on. There were also a few bigger pouches that were meant

17
for savings, as for a daughter’s wedding. This pouch would be converted into some gold trinket or the
other every few months. While financially sophisticated readers will call this system primitive and
suboptimal, it has a lot going for it. It was a simple system, easy to implement and easy to understand
and above all, it worked. Most importantly, it incorporated one of the golden rules of personal investment
management- separate portfolios
for separate goals. The old lady would not have been such an organised household manager if she had kept
all the money into one big bag, and nor should you.

18
 Features of Investment Avenues
Both working and creating your own business are viable options for earning money. Investing is another
way to earn money. Let us look at features of investment Avenues further in this topic.
Future Earnings will be Secure

There are dividends available to anyone with a large sum of money. Both saving and investing money earn
you money. Forecasts indicate that sales will likely continue to grow in the coming months.

In today’s environment, there is no way to survive without earning money. Self-management of one’s
own health conditions As an industry expands in size, the returns on investment increase
proportionately, so time is of the essence here.

Security
The more planning you do, the more money you can save in a variety of ways. Investing despite doubt
Before you make a financial decision, ensure that you understand the risks involved. To determine what
will happen in the future, you must first determine what it is. Tax Implications
Tax planning should be simple. It is necessary to evaluate the tax burden connected with investment
income. Small investors attempt to get a high rate of return while assuming minimal risk. Taxes are
irrelevant to criminals.
Predictable Income

Wealthy investors receive dividends. It pays to be frugal. We anticipate sustained revenue generation.
Profitability is crucial. Make an investment in one’s own sickness As an industry grows, investment
incentives increase proportionately. Time is critical.Itnables investors to make fewer errors when
investing. Each one is labelled with a name or number. The day interest becomes due and must be paid,
often known as the due date. Diversification refers to the practise of holding a diverse range of equities in
one’s portfolio.

Liquidity Value
Fluidity is advantageous in a variety of settings. Investing in stocks is a prudent course of action. They are
always available for sale or borrowing. The investor get immediate access to funds. The Financial
Ramifications
All that should be require is a straightforward method of tax payment. It is critical to consider the taxes
associated with earning money through investing. Small investors desire to earn a high rate of return
while minimizing their risk of loss. Tax evasion is a frequent method use by criminals to avoid paying
their taxes.
Equilibrium

Additionally, the money you have now will be put to good use in the future. In the future, the amount of
money that a pool of capital could purchase. The investing power of an investor is determine by the
amount of money he or she possesses.
19
 Legality

A legal asset is one that has the potential to be exploited to recover money. Avoid unlawful securities at all
costs. Investors are require to operate lawfully, thus refrain from doing so. They are responsible for the UTI
and LIFE funds, as well as any other assets they manage. You should address any risks associated with
asset pooling.

20
Importance of Investment Avenues
It is critical to know the importance of investment Avenues. You must know that importance of investment
in economy for your detailed research on the topic. As a group, some people would rather save than invest
their money. However, in a rapidly changing environment, this may not be sufficient to safeguard your
money.
A bank account or a safe deposit box are not always the most secure methods to store your money. Your
investment’s value may increase, which may assist you in dealing with inflation.

Compound interest can assist you in amassing a substantial sum of money. Investing can also assist you
in achieving long-term goals such as purchasing a home, travelling, or saving for a rainy day fund after
retirement.

Advantages of Investing in Money Market

Here’s why you should invest in the money market-

Maintains Liquidity in the Market

One of the most crucial functions of the money market is to maintain liquidity in the economy. Some of
the money market instruments are an important part of the monetary policy framework. RBI uses these
short- term securities to get liquidity in the market within the required range.

Provides funds on a short notice

Money markets allow investors to withdraw their funds on very short notice. Hence, it is advised that
institutions borrow funds from the market instead of borrowing from banks, as the process is hassle-free
and the interest rate is also lower than that of commercial loans. Sometimes, commercial banks also use
these money market instruments to maintain the minimum cash reserve ratio as per the RBI guidelines.

Utilisation of surplus funds

Money Market makes it easier for investors to dispose of their surplus funds while retaining their
liquid nature and offering significant profits on the same. It facilitates investors’ (such as banks,
non-financial corporations, state and local government) savings into investment channels.

Financial mobility
The money market enables financial mobility to investors by allowing easy transfer of funds from one
sector to another, thereby ensuring transparency in the system. High financial mobility is important for
the overall growth of the economy as it promotes industrial and commercial development.

Implementation of monetary policies

21
A developed money market helps RBI in efficiently implementing monetary policies. Transactions in the
money market affect short term interest rate which gives an overview of the current monetary and banking
state of the country. This further helps RBI in formulating the future monetary policy, deciding long term
interest rates, and creating suitable banking policy.

ELEMENTS OF INVESTMENT
For evaluating an investment Avenues, the following elements are important.

i. Rate of return
ii. Risk
iii. Marketability iv. Tax-shelter
v. Convenience

RATE OF RETURN
A return may be from yield such as dividend, interest or through capital appreciation. Capital
appreciation is the difference between the purchase price and sale price of the Investment. The formula
for calculation of rate of return is as follows:

Return = (Maturity value-Initial investment value)+ Dividend Initial investment value

For example Mr X purchased a share of Tata company for ₹ 100 . in the year 2013-2014. He
received ₹ 10 Dividend each year and finally sold the share or ₹105 in 2014-15. His return would be
: (105-100)+10
100 =15%
Risk

22
The risk of an investment refers to the variability of its rate of return: that is how much Individual
outcome deviates from the expected value. For example, if an investor expects To earn 18% return but
he actually earns 15%, then it means he has failed to minimize his Risk. This risk can be minimized be
formulating portfolios. A simple measure of Dispersion is the range of values, which is the difference
between the highest and lowest Value. Other measures used in finance are as follows.

a. Variance: It is the mean of the squares of deviations of individual returns around their Mean value.
b. Standard deviation: It is the square root of variance.
c. Beta: This reflects the volatility of return in response to market swings.

MARKETABILITY

a. An investment would be termed highly marketable or liquid if:

b. It can be transacted quickly. In other words, it should be readily convertible into cash. c. The
transaction cost is low.
d. the price change between two successive transactions is negligible.

The liquidity of a market may be judged in terms of its depth, breadth, and resilience. Depth refers to the
existence of buyers as well as sellers at current market price. Breadth Implies the presence of buying as
well
as selling orders in substantial volume. Resilience Means that new orders emerge in response to price
changes. Generally, large and well Established companies enjoy high marketability of its shares whereas
small companies Have low marketability in their formative years. High marketability is a desirable
Characteristic and low marketability is, of course, an undesirable one.

TAX SHELTER
The investor plans his investment considering his tax status as well as tax benefits Provided by some
investments. Tax benefits can be of following three kinds.

Initial tax benefits: It refers to the tax relief enjoyed at the time of making the Investment. For example, an
investment in Public Provident Fund gets tax benefit under Section 80C of the Income tax act.

Continuing tax benefit: It is tax shield associated with the periodic returns from the Investment. For
example, dividend paid by Indian companies is tax free in the hands of Recipients in India.

Terminal tax benefit: A terminal tax benefit refers to the relief when an investment is Realized or
liquidated. For example, LTCG is exempt if shares are sold through Recognized stock exchange and
where security transaction tax is paid.

CONVENIENCE

23
It refers to the ease with which investment can be made (readily) and looked after (easily). The degree of
convenience associated with investments varies widely. For Example, investment in a saving bank
account can be made readily and it does not require Any maintenance effort. But if investment is to be
made by purchasing a house, there may Be legal hassles and maintenance efforts are also required.

General Characteristics of Money Market

Money market is the short-term money market where financial assets that are the close
substitute of money. Money market can exist anywhere where borrowers and lenders
desires to enter into short term credit transaction as in any other market. Money market also
has three constituents like any other market —
(1) Money market has buyers and sellers in the form of borrowers and lenders.
(2) It has a commodity in the form of instruments like Treasury Bill and Commercial Paper etc.
(3) It has a price in the form of rate of interest.
The term “Money Market” refers to the various firms and institutions dealing with several
types of “near money”. Near money consists of assets which can be converted into cash
without any loss.
One of the features of money market is that it is not a one market but the collection of
markets such as call and notice money market and bill market etc. All these markets have
close inter-relationships.
An ideal money market is one where there are enormous number of participants.
Larger is the number of participants greater is the depth of the market.
It’s only the money market which solves the problem.
If the problem is that of cash out flow more than cash receipts, they go to the money
market looking for funds. If the problem is that of excess cash inflow, then the problem is
again set off by money market for temporary fund deployment. Thus, it is the money
market which meets short-term requirements of borrowers and provides profitable Avenues
to the lenders.
The term money market is also known as a wholesale market. The volume of funds, traded
in the market, are very large. There are skilled personnel to undertake the transactions.
Trading in the market is attend beyond the telephone followed by written confirmation
from both the borrowers and lenders.
Depending on supply of funds, Indian Money Market is divided into two markets:
(a) The organized money markets
(b) The unorganized money markets.
The participants in the organized money market are the Reserve Bank of India (RBI),

24
Commercial Banks, Co-operative Banks, Unit Trust of India (UTI), Life Insurance
Corporation of India (LIC), General Insurance Company (GIC). Discount and Finance House of India (DF
HI), Industrial Development Bank of India (IDBI), National Bank of
Agriculture and Rural Development (NABARD), Industrial Credit Investment
Corporation of India (ICICI), Corporate bodies. The RBI has close links with money
Market and it can justly be regarded as an important constituent of money market as it plays
the vital role of controlling the flow of currency and credit in the market.
The unorganized sector consists of indigenous bankers who engage the banking business on
traditional lines. Indigenous bankers follow their own rules of banking and finance.
Attempts have been made by RBI to bring them under the organized market. But
indigenous bankers as an aggregate not accepted the conditions prescribed by RBI.
The instruments in the money market are call money’, Treasury Bills, Commercial Bills, Commercial
Paper, Certificate of Deposits, Interbank Participation.
Money market has two strata:
(a) the primary market and
(b) the secondary market.Where the lenders and borrowers directly deal with money or through brokers it
is known as primary market. To make the instruments more liquid, the secondary market has been
built up. Discount and Finance House of India Ltd. has been set up by the Reserve Bank of India to
provide an active secondary market for money market.

In order to enable the small investors to get access to the money market so as to
benefit from its yields, the Reserve Bank of India has issued broad guidelines to allow
banks and the subsidiaries to set up Money Market Mutual Funds (MMMF) similar to
mutual funds for stock market. MMMFs pool the investors funds through MMMF
Unit/deposit account and invest this fund in money market instruments.
With the liberalization and deregulation process initiated by RBI, several innovations
25
have been introduced. But even then, the money market is not free from the following rigidities:

• Absence of integration

• Disparity of interest rates in different center

• Resistance of the unorganized money market

• High volatility

• Restricted/Limited number of players

• Limited number of instruments

• Absence of transparency in transactions

Efficient Money Market: The Conditionalities: -

Political stability in the country.

Presence of highly organize 5 commercial banking

systems. Effectiveness of central banking authority.

26
Existence of demand for temporary surplus funds.

No fixed place for conduct of operations, the transactions can be conducted even on the Phone and
therefore, there is an essential need for the presence of well-developed Communications system.

Dealings can be done with or without the help the brokers.

The short-term financial assets that are dealt in are close substitutes for money, financial Assets

being converted into money with ease, speed, without loss and with minimum transaction cost

Fund are traded for a maximum period of one year.

History of Indian Money Market: -

Till 1935, when the RBI was set up the Indian money market remained highly Disintegrated, unorganized,
narrow, shallow and therefore, very backward. The planned Economic development that commenced in the
year 1951 market an important beginning In the annals of the Indian money market. The nationalization of
banks in 1969, setting up Of various committees such as the Sukhoi Chakraborty Committee (1982), the
Vague Working group (1986), the setting up of discount and finance house of India ltd. (1988), The
securities trading corporation of Improvise (1994) and the commencement of Liberalization and
globalization process in 1991 gave a further fillip for the integrated and Efficient development of India
money market.
Call money market is the oldest in the history of money market in India which provides The institutional
arrangement for making the temporary surplus of some banks available to Other banks which are
temporarily in short of funds. The rate of interest paid on a call Loans is known as the call-rate. The call
rate in India was used to be determined by market Forces till 1973. Due to the credit squeeze introduced

27
by RBI in May 1973 in the form of Raising ‘he bank rate and tightening of refinance and rediscounting
facilities, the call rate Had reached as high a level as 30% in Dec. 1973. Due to this alarming l*vel of call
rate it Became necessary to regulate it within a reasonable a limit.

Therefore, the Indian Bank Association in 1973 fixed a ceiling of 15% on the level of call Rate. Since the
IBA has lowered the ceiling of 15% to 12.5% in March 1976, 10% in Jane1977, 8.65 in March 1978 and
10% in April 1980. In India the call rate has always Exceeded the bank rate except in the freak year 195566.
The difference between two rates Increased as the RBI tightened its refinancing an5 rediscounting facilities
till 1975-76.

In 1980-81, the call rate was much higher than the bank rate. After 1981, call rate was Slightly higher than
the bank rate.

After Discount and Finance House of India (D.F.H.I.) commenced its operation in April 1988, it was
permitted by R.B.I. to act as an arranger of funds in the call market. However, with effect from 28 th
July 1988, it has been allowed to participate both as the Lender and as borrower in the call notice
market. The call rate has seen freed from Administrative ceiling in 2 stages.

Effective from October 1988, the operations of D.F.H.I., in the call market were Exempted from the ceiling
on the call rate.

With effect from. 1” May 1989, the callings in the call rate and interbank term money Rate were
withdrawn. As a result, the call rate ns freely determined by the forces of Demand for and supply of call
loan. There are now 2 call rates in India one is the

Inter-bank call rate and the other is the lending rate of D. H.I. in the call market. The Bill Market Scheme
was introduced by RBI in January 1952, before 1952, the banks Were getting additional cash from RBI
by selling their government securities. But now According to bill market scheme, a bank
can grant loan to its customers against their Promissory notes and it can use the same
promissory notes to borrow from the Reserve Bank. All that the Bank is required to do is to
convert these promissory notes into usance Promissory notes maturing within 90 days. Initially
it was restricted to
the schedule Bank with a deposit Rs.10 crores and above, (b) loans with minimum limit of Rs.10 lakhs
individual bills, the minimum value of each being 1 lakh rupees. The scope of the scheme was broadened
from time to time.
❖ by making more banks eligible to borrow under the scheme ❖ by reducing the minimum limit
of advances.
❖ by reducing the minimum eligibility value of bills.
❖ by extending the scheme to export bills with minimum usance of 180-Days.

28
 Chapter 2

Review of literature

S. Umamaheshwari, S. Ashok Kumar (2014) Awareness, environment level

of exposulre Intensions, beliefs, responsibilities are the factors responsible

for deciding investment policies.Behavioural pattern helps in preparing

various schemes for investments. Temperament of salaried strata based on

investment awareness and expected rate of investment Return.

N. Dharani , et. Al. (2014) Investment attracts all people irrespective of their occupation, Education
and social status. Women also involve in investment activities. Women’s below age of 30 are involve
in investment activities. Women’s with graduation are involve in more investment Activities. Women’s
with income of 50001 to 100000 are involve in investment activities.

Bhawana Bhardwaj, et. Al. (2013) National output is increase for future by Investment. iInvestment
dependents upon awareness about investment opportunity, level of.Evaluation of investment opportunities
and selection of investment options. Research states that Maximum respondents have selected as Bank
deposits and Provident fund as investment Avenues. Investors preferred stability in return of investment.

S. Umambheswari, M. Ashok Kumar (2013)When one know the existence of a new thing is Known as
awareness. External sources are responsible for creating, modifying and shaping Investment decision of
investors. Television, Radio, Print media, personal consultation for expert, relatives, friends etc are
responsible for decision investment decision.

R. Sreepriya, P. Gurusamy (2013) Additional income or growth in value can be achieved by Investment.
Waiting for rewards is the main characteristic of investment. Investment is allocation Monetary resources
to get returns over given period. Surplus funds are invested with different Channel by salaried class people.
This research analyses the different investment Avenues. 81Percent respondents faced problem at the time
of investment.

L. Pandiyan, T. Aranganathan. (2012) Decision making process on savings and investment is

Affected by the attitude of the respondent. Study analyses shows that level of attitude of male and
Female, female group are not interested in investment but more wrong investment decisions are made
by male group. Respondent of 520 years of age are neutral opinion on investment.Investment pattern is
affected by the family size too.

S. Umamaheshwari, M. Ashok Kumar (2014)This study is to find the relationship between

Demographic and social factors that affects the invest decision of respondent like investment Attitude,

29
investment awareness and return on investment. This study analyses the priorities of Salary classed
people regarding investments. Different factors that affect the decision of Respondents such as age,
gender,income

Varsha Virani (2013) Investment plans are important to meet consequences in future, to meet Financial
goals. Economic development is boosted with the help of investments. Investment in Bank helps in
circulation of funds for nations development. Financial independence, increase in Wealth, and personal
goals can be achieved through investments. Investment Avenues are divided Into high risk and low risk
instruments.

V. R. Palanivelu, K. Chandrakumar (2013) This study divides the investment in different Categories
like Equity with high rate of return and risk , Debts with fixed interest rate on Investments, Fixed deposits
with bank , insurance , public provident fund low rate of return on Investment and secured. Data analyses
reveals that 40percent respondents like to invest in Insurance, 30 percent respondents like to invest in
bank deposits, 18 percent like to invest in Gold and real estate.

J. Sidharthul Munthaga, M. Nazer (2013) Employment of funds with intension of getting Returns on
it is called as investment. Study examines the impact of factors on investment Behavior of people, and to
understand the attitude of investors towards various investment Options. Data analyses reveals that 56
percent private employees, 30 percent Self employed and 14 percent public sector employees adopted
professional services for investment. Graduate Respondents are more attentive towards investments.

Naila Iqbal (2013)The study examines the how a product or service has become entrenched with A given
consumer market. Penetration is checked with the amount of sales that is generated in Market. Product
generating 20 percent of sales within given market would said to have higher Rate of market penetration.
Mutual fund industry is known as Urban industry. Mutual funds are considered to be less risk and more
profit.

Juwairiya P. P. (2014) An economical activity which fascinate people from all walks of life is

Called as investment. Investors face problem in choosing investment Avenues from various

Options. Systematic investment plan is a tool to create a wealth by investing small amount of

B. N. Panda, J. K. Panda (2012) The study analyses the difference in perception of investors

in Decision of investing on the basis of age and gender. Various investment options are

examined in These research such as Secured deposits, Life insurance policies, Provident fund ,

Pension Schemes, Bonds, Debentures, Equity shares, Mutual funds, Real estate, postal

schemes etc.

30
Investment decisions are to be taken by self and has to wait to see the results of it, which Fascinates some

investors.

N. Srividhya, S. Visalakshi (2013)The study analyses various Avenues of investment such as

Government deposits, bonds, real estates, post office saving certificates life insurance policies,

mutual funds etc. study covers Government colleges, Private colleges and aided colleges.

Odoemenem, et. Al. (2013) Investment is laying money now for return in future. Study reveals That
policy makers does not make comprehensive and adequate saving schemes for rural area. Which leads
to inadequate savings and Investments by small scale farmers. The study analyses Socio-economical
status of the respondents. Purpose of saving is to take care of families and not To invest.

S. Prasanna Kumar (2014) Investment and savings are two different things. Investment means Saving
with a hop that some benefit will arise in future. Investment options are available like Bank deposits , NRO
funds, Real Estate, Shares and Bonds etc. Respondent of the study reveals That majority of respondents
selected deposit as a mode of investment..

UjwalaBairagi, CharuRastogi (2013) The study states the Household investors preferred Investments in
Bank Deposits. Household investments are the major determinant of gross Dominal savings. Majority
respondents selected the option of Bank deposits and Insurance Policies. Study analyses the awareness
about investment Avenues which state that respondent Between the age of 41 to 50 years are more aware
about investment options.

Kaushal Bhatt (2013)Utilization of resources in order to increase income or production output In future
is kwon as investment. Data analyses states that Graduates are more intended to save Money and they are
aware about various investment Avenues. Businessman tends to invest more as Compared to salaried
man.
Respondent want more safety and securities to their money.

Rajeshwari Jain (2014) Investment is the consumption and saving opportunity in future Expressed in
monetary terms. Two classes of investments like Fixed income statements i.e. Preference shares , Bonds,
fixed deposits and Variable income investment i.e. equality capital, Proprietary ownership. Data shows
that respondents between the age group of 26 years to 35 Years are involve in investment activities.
Unmekha Tare, Vishal Mehta (2012) The study analyze that the large number of investment Outlets
are available to investor. By analyzing advantages and disadvantages of investment Avenues investor can
select appropriate investment plan for self. Data examination states that 32Percent investors selected LIC
/ NSS, 31 percent investors had selected Fixed deposits, 9 percent Investors selected Mutual funds 6
percent investors opt for Chits and Jewellary etc. Investment Management

31
is a Science as well as an Art.Ravi Vyas (2012)This study finds the form of investments preferred by
investors. Mutual fund Investment is a secured investment with good returns on investments. Data
analyses shows that Maximum respondent invest in Gold followed by bank deposits and Insurance
schemes. Mutual Fund investments are very limited. For Safety, Liquidity, Reliability, and high
Returns Mutual fund has average score among investors

Gauri Prabhu, N. M. Vechalekar (2013) Mutual funds is a platform to participate in the Indian capital
market. Money collected is invested in shares, debentures and other securities. This study examines the
awareness about the mutual fund among investors. Data analyses states that Respondents between age
group 19 years to 35 years intended to invest more. Private sector employees invest more.
Priyanka Jain (2012) The study analyses the various investment Avenues available for the Investors. It
state Equity shares has low return but high capital appreciation, risk liquidity, Marketability, tax benefit,
Debentures has high return but low risk liquidity and marketability. Bank deposits have moderate returns
but low capital appreciation and risk liquidity.

Gaurav Chhabra, Ankesh Mundra (2014)The study state various invest options available with The
investors. In earlier time because of non availability of banking system investors use to keep Hard cash,
gold and silver ornament , precious stones etc as savings. Now investment are made Through bank,
insurance policies, mutual funds , pension funds, collective investment schemes,Investment clubs.

T. N. Murty, P. V. S. H Sastry (2014)Investors choice with the objective of return optimization Is

investment in the stock market instruments or securities. Stock market securities are affected By various
internal and external factors. Study examines the perception of small investment Investors towards
returns on investment.

A.N. Paunikar (2014) Equity Linked Saving Schemes are similar to equity diversification Schemes with
tax saving benefit under section 80C. The study aims at understanding scheme- wise benefits under Equity
Linked Saving Schemes for tax saving. Data analysis shows that Equity Linked Saving Schemes has better
returns on investments.

Tuan-Hock Ng, et. Al. (2011) This paper examines the influence of demographic and investment
Experience on retirement planning intension. Data analyses reveals that investors at age of 20 to 29 are
more concern about investment for retirement. Singles invest more in EPF for retirement Over the married
people.

Simran Saini, et. Al. (2011)In past few years Indian mutual fund has gained lot of popularity.The
diversified risk and diversified investment structure of mutual fund contributed in growth of mutual funds.
This study analyses the growth of mutual fund industry in India. Data analyses State hat tax benefit is the
main factor followed by high returns for investing in mutual fund.

32
Yogesh P. Patel, Charul Patel (2012)This study is to examine the behavioural pattern of Investments
and various investment alternatives among salaried people working in private sector. Data analyses states
that majorities of Male respondents are intended to invest more. Maximum Investment in range between
1 lakh to 2 lakhs.

Manoj Kumar (2013) Employment of funds on assets with the aim of earning income or capital
Appreciation is called as investment. The investor with excess cash can invest in securities like Real
estate, gold, bank deposits etc. The study is to understand the preference of investors Towards other
investment alternatives and to know the preference towards investment between Shares and mutual
funds.

A.nanth (2013)This study analyses the investors attitude towards various forms investment. Investments
are classified as marketable and Non marketable, High risk and low risk Investments. Share market is
high risk investment with high returns, Commodity market has no risk funds are risk investment with
good returns.

Sanjay Kanti Das (2012) A tool that allows the small investors to access a well diversified Portfolio of
bonds, equities and other securities is known as Mutual Fund. Most Suitable Investment Avenues for
common man is mutual fund as it provides opportunity to invest in Diversified, professionally managed
securities at low cost.

N.Geetha, M. Ramesh (2011) This study Examines the factors responsible for investment Behaviour of
people and different investment options available. Equity are high risk and high Return investment with
liquidity, debts are low risk and fixed return instruments, Mutual funds And bonds are low risk with
normal returns instruments, Company deposits and bank deposits Has low risk and low returns, post office
savings , PPF and insurance policies are no risk Investment with low returns, Real estate and Gold has no
returns on investment but has capital Appreciation.

Avinsah N (2014)The study analyses the investment behaviour by examining various invest Avenues.
Data analyses reveals that Most of the respondents have selected bank deposit as their First option for
investment followed by real estate. Below 30 years respondents invest more in Real estate whereas above
60 years preferred LIC policies. Full time salaried people are more Aware about different investment
Avenues.

Heena Kothari (2012), The study analyses the investment behaviour towards investment Avenues in
Indore city. The study is consisting of private and public banking employees as they Have regular
income,retirement benefits, safety and security of income. Analyses of data states.

Ashly Lynn Joseph, M. Prakash (2014) Buying of financial product or any valued item with
Anticipation of positive returns will received in the future is called as investment. Study analyses
The different investment options such as Bonds, Cash, Real Estate etc.
33
J. Paul Sundar Kirubakaran (2013) The Study analyses the behaviour of an investor. This Study
brings out the relationship between risk of investment and protection of investment. Nearet 59 percent
respondents stick to the protection of investment rather risk for good returns. Respondents have
protecting investment as a main priority.

Samreen Lodhi, (2014) The study determines the influence of financial literacy, accounting
Information, openness to experience on decision making of investors. Investors are categorized As
Risk taker or Risk Averter. Risk taking, preference investment in shares (risky investment),Risk
aversion, information asymmetry and shares investment.

Smita Mazumdar (2014) Individuals invest rationally with intention of maximizing utility for Given
level of risk. This study examines the relationship between investment behaviour and level of knowledge
risk investment with high returns, Commodity market has no risk funds are risk investment with good
returns.

Sanjay Kanti Das (2012) A tool that allows the small investors to access a well diversified Portfolio of
bonds, equities and other securities is known as Mutual Fund. Most Suitable Investment Avenues for
common man is mutual fund as it provides opportunity to invest in Diversified, professionally managed
securities at low cost.

N.Geetha, M. Ramesh (2011) This study Examines the factors responsible for investment Behaviour of
people and different investment options available. Equity are high risk and high Return investment with
liquidity, debts are low risk and fixed return instruments, Mutual funds And bonds are low risk with
normal returns instruments, Company deposits and bank deposits Has low risk and low returns, post office
savings , PPF and insurance policies are no risk Investment with low returns, Real estate and Gold has no
returns on investment but has capital Appreciation.

Avinsah N (2014)The study analyses the investment behaviour by examining various invest Avenues.
Data analyses reveals that Most of the respondents have selected bank deposit as their First option for
investment followed by real estate. Below 30 years respondents invest more in Real estate whereas above
60 years preferred LIC policies. Full time salaried people are more Aware about different investment
Avenues.

Heena Kothari (2012), The study analyses the investment behaviour towards investment Avenues in
Indore city. The study is consisting of private and public banking employees as they Have regular
income,retirement benefits, safety and security of income. Analyses of data states.

Ashly Lynn Joseph, M. Prakash (2014) Buying of financial product or any valued item with
Anticipation of positive returns will received in the future is called as investment. Study analyses
The different investment options such as Bonds, Cash, Real Estate etc.

34
J. Paul Sundar Kirubakaran (2013) The Study analyses the behaviour of an investor. This Study
brings out the relationship between risk of investment and protection of investment. Nearet 59 percent
respondents stick to the protection of investment rather risk for good returns. Respondents have
protecting investment as a main priority.

Samreen Lodhi, (2014) The study determines the influence of financial literacy, accounting
Information, openness to experience on decision making of investors. Investors are categorized As
Risk taker or Risk Averter. Risk taking, preference investment in shares (risky investment),Risk
aversion, information asymmetry and shares investment.

Smita Mazumdar (2014) Individuals invest rationally with intention of maximizing utility for Given
level of risk. This study examines the relationship between investment behaviour and level of
knowledge . Financial knowledge leads to investing in different investment Avenues such as Equity,
gold, real estate,
fixed deposits etc. study examines the aggressive investors, averse Investors and moderate risk taker with
the help of financial knowledge.

M. Nandhini, D. Sivasakth (2013) Mutual Fund is the most likely investment for the common Man as it
provides an opportunity to invest in a diversified, professionally managed securities at A relatively low
cost. Main objective of investment is wealth accumulation for investor according To these study. Mutual
funds provides moderate rate of returns on investment with minimum risk

CHAPTER 3

RESEARCH METHODOLOGY

The research methodology aims to find the perfect Investment schemes for investors.

In this procedure, Research is examined and appropriate ideas and identified The

knowledge which is the best appropriate topic to the Investment.

At the time of Primary stage, the data collected

Or analyzed by individual investors. Secondary data Collected from various sources

such as, journals, webs, Magazines, research papers, etc.

Problem Statement:

The study under investigation here is related to Analyzing the growth potential of Bank FD’s, Mutual
Funds, Equity (Stock Market). Investors are very much confused About where to invest the money in the
market. As we know The bank gives less amount but a fixed amount. The mutual Fund also gives a 12%

35
fixed amount, another amount Depending on the market. The stock market is depending on The economy
of the country. As investors are most conscious Of their money to invest in any of the markets.

Statistical Tools

There are different types of statistical techniques that Are used in the analysis of data. The following are
some Tools used for analysis the data. Data representation:-

● Pie Charts

● Bar Graphs

● Tables

● Formulas
Mutual Fund:

Annualized Return –
If selecting, annualized returns policy then the measure Of an increasing the value of your investment
fund on the Basis of annual return, for example, you have invested Rs.2 Lakhs in an Mutual Fund scheme.
In a period of three years, Your investment has growth of Rs.2.8 Lakhs. In this Scenario, the absolute
return of your investment is 40% , But because the effect of annualized return is calculated on
compounding therefore the return should be 11.99 %.

Total Return :-
It referring that actual return which you will accruing From the investment. It includes both capital gain
and Dividend. For example, let’s assume you have investment Rs. 1 lakh in Mutual Fund Schemes, and
the Net Asset Value is Rs.20. From when you purchase the investment of Rs.1 Lakh and the net asset
value of Rs.20, It indicates that you Purchased 5000 units. After some years later, Net Asset Value of
Mutual Fund Scheme Investment Increased by Rs.22 and the value of units will be increased by Rs.1.1
Lakh, that means (5000units x Rs.22 per unit) which Indicates that you earn capital gain Rs 10,000 from
your Investments.
Now in this Scenario dividend is declared by The company of Rs.2 per unit over the year, overall Rs.10,000
dividend paid to Investors Rs. 10,000(5,000units X Rs. 2 per unit),Therefore your total earning shall be
Rs.10,000 + Rs.10,000=Rs.20,000(Dividend + Capital Gains amount) which means you earning total 2
returns.
Methodology is an essential part of research to find answer to the research objective that initiate the same.
Therefore, it figures as an important part of the study. This Chapter focuses on the design and research
method utilized in the study. In addition, the Procedure followed to collect, capture, process and analyzed
data is presented. The Research approach used in the study is presented below: -

36
 Sample Unit: -

Sample size determination is the process of choosing the number of Respondents/observations to include
in a statisticalsample. It is an important feature of a Research study because on the basis of sample size
data is collected and interpreted to give Accurate and appropriate The correct and appropriate sample size
is said to give more accurate results. For Example, in a census, data is collected from the entire population.
Therefore, the sample Size is equal to population of the country. Keeping in mind the rate of non-response
and Non- availability of respondents, the sample size wastaken between 25 – 50 science students of
Mumbai University. It was Random sampling method that was considered to Decide the sample size.

Type of research: -
My research is based on descriptive research. It helps to know qualitative and Quantitative aspects of
study. It studies the characteristics of Indian Money Market and See to it that how we can bring more
agencies in India. It is used because this topic is Being studies only to understand the concept and the
problem it faces. However, my Research also studies Review of Literature which acts as a base for
Descriptive study.

Sampling Objective: -
The objectives are designed to have a particular direction to the study like what aspect Of the topic is
going to be studied. A topic can be studied from various parameter, the Objectives designed for a project
gives an idea that in what manner the topic is studied, What is the flow of project, what are the variables
selected for the project, etc.-To find out individual investors for the age group of 18-55 years.

Sampled size: -
Sample size determination is the process of choosing the number of Respondents/observations to include
in a statistical sample. It is an important feature of a Research study because on the basis of sample size
data is collected and interpreted to give accurate and appropriate results.
The correct and appropriate sample size is said to give more accurate results. For Example, in a census, data
is collected from the entire population. Therefore, the sample Size is equal to population of the country.
Keeping in mind the rate of non-response and Non-availability of respondents, the sample size wastaken
between 25 – 50 science Students of Mumbai University. It was Random sampling method that was
considered to Decide the sample size.
Due to the sample size being smallthere may be slight inaccuracy of data that can be Rectified by further
study. (100 respondents)

SAMPLE DESIGN: -The sample design used to represent the survey data in is the form of Pie-Charts
and Bar-Charts based on the 80 respondents of the survey. Probability sampling was used to collect
responses.
Data Collection: -

37
Data for the study was collected from the primary as well as secondary sources.

PRIMARY SOURCE OF DATA COLLECTION: -

Primary source of data collection consisted of survey method. The survey was collected Through a
Structured Questionnaire. The questionnaire was prepared keeping in mind The objectives of the study
and factors that were to be considered for the study. Questionnaire was prepared in such a manner that
it could be easily understood by the Respondents. The questionnaire being structured was in a single
format to save time of the Respondents.

SECONDARY SOURCE OF DATA COLLECTION: -

The secondary source of data collection is assessed to gain information and knowledge About our research
problem that may be previously discussed by some other researcher. The secondary is referred to know
what has already been discussed and what more Scope can be there for research.

The secondary data is taken from selective websites and from online publication of Some researchers. The
secondary data was useful for the study of Review of Literature. We could study various aspects of
different researchers which gave us an idea about the Factors being previously discussed and also the
conclusions drawn from them. It also Gave us an insight on what more could be studied to solve the
research problem.

Data Analysis; -

The application of statistical tools and techniques for the data collected by means of Questionnaires is been
classified tabulated analyzed and summarized with the help of Statistical tool percentage method.
Limitation of the study: -
The project is based upon various financial instruments that are available in India and the perception level
of the customer about these financial instruments. For which there will be the need of information from
the customer about their knowledge of these financial products. The various limitations of the study are:
❖ The study is based on limited scope of area.
❖ Whole market cannot be collected.
❖ Total number of financial instruments in the market is so large that is needs a lot of source of
analyze them all.
❖ Handing and analyzing such the varied and diversified data needs a lot of time and resources.
❖ Reluctance of the people to provide complete information about themselves can affect the validity
of resources.
❖ Due to time and cost constraints study is conducted is only area of Ghaziabad and Noida.
❖ The lack of knowledge is customers about the financial instruments can be major limitations.
❖ The information can be biased due to the use of questionnaire.

38
 Objective of Study: -

The objective of the project are as follows: -

• To study about INDIAN MONEY MARKET AND its related aspects like its types and The
instruments.
• To study about the history, participant, organizational structure of INDIAN MONEY
(MONETORY) MARKET.
• To find out the investors saving preferences.
• To study about overcoming the short-term deficit.
• To enable liquidity in the markets.
• To understand all about different investment Avenues available in India.
• To find out how the investors get information about the various financial instruments.
• To find out the savings habits of the different customers and the amount they invest in various
financial instruments.
• In which type of financial instruments they like to invest.
• How long they prefer to keep their money invested.
• What is the return that they expect from the investment.
• What are the various factors that they consider before investing.
• To give a recommendation to the investors that were they should invest.

Scope of the study

The study enables to have a better knowledge of investing option available in the market. The study
highlights some of the most important investing option available with the Indian investors. It’s gives an
overview of pros and cons of investing in different Avenues and also help in choosing best from them.

Hypothesis: -
Hypothesis is referred as the presumption made by an individual to study the research Project. These
presumptions are made in a way to satisfy the objectives framed for the Projects. Framing of hypothesis
is a research as in this step the research problem or the Problem statement is designed on which the entire
research is based.

The hypothesis or the research problem of the study is designed in such a manner to Find out the relationship
between the variables, i.e. does the effect has any impact on the Other. We can also say that the following
hypothesis will let us know how closely they Are correlated with each other.

H0 :- past prices are not reflected on present price

H1 ;- Past prices are reflected on present price

39
 H0 :-it has no impact on economy growth.

H1: - it has impact on economy growth.

H0: - undercome the short-term deficit.

H1: - overcome the short-term deficit.

H0: - there is no flow of liquidity in the market.

H1: - there is flow of liquidity in the market.

CHAPTER 4

DATA ANALYSES

An analysis is made on the reposes reserved from 100 investors. The objective of

the report is to be find out the investor’s behaviour on various investment

Avenues, to find out the needs of the current and future investors.

The questionnaire contains various questions on the investor’s financial experience, based on these
experiences an analysis is made to find out of a pattern in their investments.

Based on these investment experience of the 100 sample investors an analysis is made an interpretation may
be correct or my be not correct but care is taken to draw a valid and approval interpretation.

Analysis made only from the information collected Through questionnaires no other data or information
is taken in to consideration for purpose of the analysis.

40
Analysis of the survey:

Parameter No. Of Percentage

Investors

Gender
Male 58 58%
Female 42 42%
Total 100 100%
Age group
Below 20 0 0
Between 20-30 35 35%
Between 30-40 35 35%
Above 40 30 30%
Total 100 100%
Qualification
Under 7 7%
Graduates
Graduates 46 46%
Post graduates 39 39%
Others 8 8%
Total 100 100%
Occupation
Salaried 52 52%
Business 22 22%
Professional 14 14%
House wife 11 11%
Retired 1 1%
Total 100 100%
Annual
Income
Below rs 200000 37 37%
Rs.200000-400000 31 31%
Rs.400000-600000 18 18%
Above rs. 600000 14 14%
41
 Total 100 100%
Interpretation : Table 1about show, that 58 (58%) of the investors are male and the rest 42(42%) are
females. Generally, bear the financial responsibility in Indian society, and therefore they have to make
investment (and other) decisions to fulfil the financial obligations.

When it comes to age, it was found that 35%are young and significant number under the age group of
2030. 35% of them are in the age group of 30 to 40.30% of them are above 40 year of age. There is no
investors below 20 year of age.

Nearly 52% of the investors belong to the salaried class, 22% were business class, 14%were professional,
11% were housewife and the rest were retired.

It was found that irrespective of annual income they earn all the investors interested in investments since
today’s inflated cost of living is forcing everyone to save for their future needs and invest those saved
resources efficiency, 39(39%) of the individual Investors covered in the study are postgraduates;46(46%)
investors are graduates and 7(7%) of the investors are undergraduate, and 8(8%) investors are categorized
As others who are either illiterates, had less education than under graduation or who are more qualified
than Post graduates. It is interesting to note that most investors(covered in the study) can be said to possess
higher education (Bachelor’s Degree and above), and this factor will increase the reliability of conclusions
drawn about the matters under investigation. 37(37%) of the investors are earning less than 2 lakhs per
annum,31(31%) investors are earning between 2 lakhs and 4 lakhs, 18(18%) investors are earning between
4 lakhs and 6 lakhs,14(14%) investors are earning more than 6 lakhs per annu. Since most of the investors
are below 4 lakhs annual earning, many of them are non-risk rakers.
TABLE 2 OTHERS CHARACTERISTICS OF SAMPLES INVESTORS

INVESTORS WILLING TO LOSE PRICIPAL AMOUNT

PARAMETERS NO OF INVESTORS PERCENTAGE

YES 5 5%
No 95 95%
Total 100 100%

42
 NO OF INVEATORS

YES
NO

Interpretation :

Since many of the investors annual earnings are below 2 lakhs and 4 lakhs, many of them do not take
the risk of losing their principal investment amount.95% of the sample investors are not ready to lose
their principal investment amount.5%are ready to take risk of losing their principal up to certain exit.
TABLE: TIME PERIOD PREFERED TO INVEST

PARAMETERS NO OF INVESTORS PERCENTAGE

SHORT TERM 10 10%
MEDIUM 60 60%
LONG TERM 30 30%
TOTAL 100 100%

43
 NO OF INVESTORS

SHORT TERM
MEDIUM
LONG TERM

INTERPRETATION:
Interesting to know that many of the investors prefer to invest their money for medium term i.e. from 1-5 year,
instead of short term or long term.10%preferred short term, and 30%preferred long term.
TABLE FREQUENCY OF MONITORING THE INVESTMENT

PARAMETER NO OF INVESTORS PERCENTAGE

Daily 17 17%
MONTHLY 35 35%
OCCASIONALLY 41 41%
OTHER 7 7%
TOTAL 100 100%

44
 NO OF INVESTORS

DAILY
MONTHLY
OCCASIONALLY
OTHERS

INTERPRETATION:
Due to the busy life schedule, many of the investors are not able to blend time in monitoring their
investments, only 17% of the investors are monitoring their investments daily, 35% are monitoring on a
monthly basis, 14% the majority investors are monitoring their investments occasionally. Many of them
whom have invited in safe investment Avenues do not bother their investments, about some of them forget
about the investment for many years.
TABLE INVESTMENT IN EQUITY MARKET

PARAMETERS NO OF INVESTORS PERCENTAGE

YES 30 30%
No 70 70%
Total 100 100%
Out of the total sample investors only 70% of the investors invest in equity shares market through their
DEMATE A/C, 30% of the investors never invested in equity shares. The investors who invest in equity
shares market are asked others questions, what would they do if the stock market falls immediately after
their investments, many of them replied that they would wait till the market increases instead of these are
a loss, very few answered that they wood average the investment by buying some more shares.

TABLE : FAMILY BUDGET

PARAMETERS NO OF INVESTORS PERCENTAGE

YES 73 73%

45
 No 27 27%
TOTAL 100 100%

NO OF INVESTORS

YES
NO

73% of the sample investors had a monthly family budget for daily their expenditure. 27% of the
investors replied they never thought of having a budget calculation a few think of having a budget but
never implemented so far. Many people with excess money never cared to make any family budget.
TABLE: INVESTMENT TARGET

PARAMETERS NO OF INVESTORS PERCENTAGE

YES 48 48%
NO 52 52%
TOTAL 100 100%
It’s interesting is know that almost same proportion of investors have different through, 48 of the investors
have an investment target every year, and 52% of the investors do not go for investment. On postal
questioning many of the investors who had an investment target every year are not able to reach these
targets due to contingent expenses. Few investors invest regularly but never thought of having a target
every year.

46
Interpretation: -From the above data we can see that 49% of the respondents invest in capital Market,
54% of respondents invest in money market mutual fund, 60% invest in Banks and 20 % invest in real estate

47
Do you have any knowledge about money markets instruments

SR. NO PARTICULAR FREQUENCY PERCENTAGE

1 YES 75 75%
2 NO 8 8%
3 MAY BE 6 6%
4 HEAD BUT DON’T 11 11%
KNOW

Interpretation: -
From the above analysis we can see that 75% have heard about money market and Knows about that, while there
are 6% people who aren’t sure about this, 11% people Have heard about the term money market but have no
knowledge about that and then About 8% of the respondents don’t know anything about money market
How to would you like to hold your money instruments ?

SR. NO PARTICULAR FREQUENCY PERCENTAGE

1 LONG TERM 78 78%
METHOD
2 SHORT TERM 22 22%
METHOD

48
 Interpretation: -
From the above data 78% of the people like to keep money market instruments for long Term method
while other people which are about 22 % keep it for the short-term Method. We can see that most of them
are willing to keep their investment for long them.
How much risk will you be willing to take

SR.NO PARTICULAR FREQUENCY PERCENTAGE

1 LOW 13 13%
2 AVERAGE 19 19%
3 MEDIUM 51 51%
4 HIGH 17 17%

49
 Interpretation: -
From the above data we can see that 13% respondents will take low level of risk, while 17% of respondents
will take high amount of risk. 19% of respondents will take risk at Average level. Most of the respondents
are willing to take average number of risks.

Is recession had affected your investment decision?

SR. NO PARTICULAR FREQUENCY PERCENTAGE

1 YES 86 86%
2 NO 14 14%

50
 Interpretation: -
From the above data we can see that 86% respondents experienced that recession has Affected their
Investment decision while 14% respondents were not affected by recession.

TABLE: FINANCIAL ADVISOR

PARAMETERS NO OF INVESTORS PERCENTAGE

YES 23 23%
NO 77 77%
TOTAL 100 100%

51
 NO OF INVESTORS
90
80

70

60

50

40 NO OF INVESTORS

30

20

10

0
YES NO

77% of the investors had a financial advisor, the never approached an investor for there financial needs,
the reason may be inadequate income and excess expenditure, and there wouldn’t surplus money to
worry about.23%of the investors have financial advisors, who manage their investments.
TABLE:OBJECTIVE OF INVESTMENT

PARAMETERS VOTES WEIGHTS RANKING

CHILDREN’S 71 29 1
EDUCATION
RETIREMENT 47 19 3
HOME PURCHASE 38 15 4
CHILDREN ‘S 30 12 5
MARRIAGE
HEALTHCARE 57 23 2
OTHERS 5 2 6
TOTAL 248 100

52
 VOTE
OTHERS

HEALTH CARE

CHILDREN MARRIAGE

VOTE
HOME PURCHASE

RETIREMENT

CHILDRENS EDUCATION

10 20 30 40 50 60 70 80

Show the savings objective of the sample investors, investors are given option to select one or more
savings objectives, since there may be one or more anwers, weight are given for each parameter based
on the vote given by the investors, the maximum weightage represent many investors have that as main
objective.
Based on the weight calculate rank is given in the order of maximum weightage given by investors. The
first rank given to children’s education, many investors feel that, Investing Money for the future of the
Childs education is very important than any other needs. Many of the investors are in the age group of
20- 30and30-40 as of now they are thinking of saving for their children marriage. So children’s marriage
is given last rank. After children’s Education investors are saving for their own health care. There is a
greater need for Indian to save for there health care who are living a mechanical life, Retirement and
home purchase are given subsequent rank after health care.

53
 TABLE:PURCHASE BEHIND INVESTORS

PARAMETERS VOTE WEIGHT RANK

WEALTH CREATION 37 22 4
TAX SAVINGS 43 25 3
EARN RETURNS 45 27 1
FUTURE 44 26 2
EXPENDITURE
TOTAL 169 100

VOTES
50
45
40
35
30
25
20 VOTES

15
10
5

WEALTH CREATION TAX SAVINGS EARN RETURN FUTURE

EXPENDITURE

All Investment have every common purpose for inviting , they have more than one purpose for
investing their money. Salaried people Invest for tax saving, and for future expenditure , business
people Invest for earning returns. Almost all the investors have all the 4 purpose behind the investing
their money.

TABLE: FACTORS CONSIDERING BEFORE INVESTING

PARAMETER VOTES WEIGHTS RANK

SAFETY OF 60 43 1
PRINCIPAL

54
 LOW RISKS 35 25 2
HIGH RETURNS 27 19 3
MATURITY PERIOD 16 11 4
TOTAL 138 100

60

50

40
VOTES
30
#REF!
#REF!
20

10

0
SAFETY OF LOW RISKA HIGH RETURNS MATURITY
PRINCIPAL PERIOD

When the investors are asked about the factors considering before investment many of them have
voted for safety of principal of low and risk. First rank given to safety of principal and 2nd to vote low
risk. Here there are some contradicting results, some expert high return at a very low risk, and this is
not possible in practical Indian investment Avenues. Investment believes in a proved principal, “higher
the risk higher the return, lower the risk lower the return”. Investors need to know about this principal
before investing.

Independent Variables and Dependent variables

There are total four independent Variables

1. Age Group
2. Occupation
3. Qualification
4. Annual income

There can be many dependent variables

❖ Level of risk tolerance

55
 ❖ Percentage of income that can be invested
❖ Time period that can be taken for investments
❖ Savings objectives
❖ Investment preference
These independent variables can be compared with any dependent variables for finding the relations
between the parameters.

In my analysis I have taken occupation categories for comparison with dependent variables investment
preference and age group comparing with the dependent variables level of risk tolerance.

TABLE: DEMOGRAPHIC BASED ON OCCUPATION

SALARIES

PARAMETER NO. OF SALARIED PERCENTAGE

AGE GROUP
BELOW 20 0 0%

BETWEEN 20 – 30 22 42%

BETWEEN 30 - 40 18 35%

ABOVE 40 12 23%

TOTAL 52 100%

56
QUALIFICATION
UNDER GRADUATES 0 0%

GRADUATES 21 40%

POST GRADUATES 25 48%

OTHERS 6 12%

TOTAL 52 100%
ANNUAL INCOME
BELOW RS.200000 15 29%

RS.200000 - 400000 15 29%

RS.400000 – 600000 17 33%

ABOVE 600000 5 10%

TOTAL 52 100%
BUSINESS

PARAMETER NO.OF BUSINESS PERCENTAGE

AGE GROUP
0 0%
BELOW 20
2 9%
BETWEEN 20-30
10 45%
BETWEEN 30-40
10 45%
ABOVE 40

TOTAL 22 100%
QUALIFICATION
5 23%
UNDER GRADUATES
11 50%
GRADUATES
6 27%
POST GRADUATES
0 0%
OTHERS

TOTAL 22 100%
ANNUAL INCOME
11 50%
BELOW RS.200000-200000
5 23%
Rs.200000-400000
1 5%
RS.400000-600000
5 23%
ABOVE 600000

TOTAL 22 100%

57
PROFESSIONAL

PARAMETER NO. OF PROFESSIONAL PERCENTAGE

AGE GROUPS
0 0%
BELOW 20
8 57%
BETWEEN 20-30
2 14%
BETWEEN 30-40
4 29%
ABOVE 40

TOTAL 14% 100%

QUALIFICATION
UNDER GRADUATES 0 0%

GRADUATES 6 43%

POST GRADUATES 6 43%

OTHERS 2 14%

TOTAL 14 100%
ANNUAL INCOME
BELOW RS.200000 2 14%
8 57%
Rs.200000-400000
RS.400000-600000 1 7%
3 21%
ABOVE 600000

TOTAL 14 100%
HOUSEWIFE

PARAMETER NO. OF HOUSEWIFE PERCENTAGE

AGE GROUP
0 0%
BELOW 20
4 36%
BETWEEN 20-30
3 27%
BETWEEN 30-40
4 36%
ABOVE 40

TOTAL 11 100%

58
QUALIFICATION
1 9%
UNDER GRADUATES
6 55%
GRADUATES
2 18%
POST GRADUATES
2 18%
OTHERS

TOTAL 11 100%
ANNUAL INCOME
9 82%
BELOW RS.200000
1 9%
Rs.200000-400000
0 0%
RS.400000-600000
1 9%
ABOVE 600000

TOTAL 11 100%
ASSUMPTION

As a part of the analysis 1assumed that preference for investment Avenues is dependent on the
occupation of the investors. Hence preferred investment Avenues are derived from the demographic
of the sample investors based on the occupation.
PREFERENCE BASED ON THE OCCUPATION

TABLE: PREFERRED INVESTMENT AVENUES FOR SALARIED

INVESTMENT VOTES WAIGHTS RANK

AVENUES
LIFE INSURANCE 35 16 1
GOLD 25 12 2
BANK FIXED 24 11 3
DEPOSIT
MUTUAL FUND 23 11 4
REAL ESTATE 23 11 5
POST DEPOSIT 20 9 6
SAVINGS 18 8 7
PPF 17 8 8
NSC 16 7 9

59
 EQUITY SHARES 14 7 10
SAVINGS ACCOUNT

215 100%
Since the investor has an option to invest in more than one investment Avenues, weights are given on the
basis of preference to Investment Avenues. The Avenues which is given maximum weightage by the
investors is ranked first. First ten rank are given to the first ten preferred investment Avenues. First
preference is given to life insurance, second to investing in gold, Third to bank fixed deposit. Tenth
preference is given to bank saving account.
PREFERRED INVESTMENT AVENUES FOR BUSINESS PEOPLE

INVESTMENT VOTES WEIGHTS RANK

AVENUES
BANK FIXED 13 16 1
DEPOSIT
INSURANCE 13 16 2
REAL ESTATE 11 14 3
MUTUAL FUND 10 12 4
GOLD EQUITY 8 10 5
SHARES 7 9 6
CHIT FUNDS 6 7 7
POST OFFICE 5 6 8
SAVINGS 4 6 9
SAVINGS ACCOUNT 4 5 10
NSC
PPF

TOTAL 81 100
Thinking of the business people is almost same to that of Salaried people, both are similar in preferring
insurance and bank fixed deposit, but given third preference to real estate. Gold is given 5th place here.
Last place is given to national savings certificates.

TABLE:- PREFERRED INVESTMENT AVENUES FOR PROFESSIONALS

60
 INVESTMENT VOTES WEIGHTS RANK
AVENUES
BANKS FIXED 10 19 1
DEPOSITS
INSURANCE 10 18 2
GOLD 6 11 3
REAL ESTATE 6 11 4
POST OFFICE 5 9 5
SAVINGS
SAVINGS ACCOUNT 4 7 6
MUTUAL FUND 4 7 7
PPF 3 6 8
BONDS 3 6 9
GOVERNMENT 3 6 10
SECURITIES

TOTAL 54 100

There is no much difference in the preferences for professionals when compared to salaried and business
people. Professionals does not prefer mutual fund (7th rank), where salaried and business people prefer at
4th place. Professionals are more interested in post office savings rather than mutual funds. As business
1st
people professional are prefer bank fixed deposits place, then life insurance. Professionals does not
prefer national savings certificates at all, eliminated it from the top 10.

TABLE:- PREFERRED INVESTMENT AVENUES FOR HOUSEWIFE

INVESTMENT VOTES WEIGHTS RANK

AVENUES
GOLD 9 18 1
INSURANCE 9 18 2
BANK FIXED 8 16 3
DEPOSIT 5 10 4
REAL ESTATE 5 10 5
POSTE OFFICE 4 8 6
SAVINGS 4 8 7
CHIT FUNDS 3 6 8

61
 EQUITY 2 4 9
SAVINGS 1 2 10
ACCOUNTS
NSC
MUTUAL FUND

TOTAL 50 100

Indian housewife love gold as such as themselves. Housewife have given first rank to pushing insurance
and bank fixed deposit to seconds and third place. Housewife gave least preference to mutual funds. They
are more attracted to traditional investment avenues like gold, real estate, post office savings and chit
funds.
TABLE:- PREFERRED INVESTMENT AVENUES – OVERALL

INVESTMENT VOTES WEIGHTS RANK

AVENUES
BANK FIXED 67 17 1
DEPOSIT 55 14 2
INSURANCE 50 13 3
GOLD 45 12 4
REAL ESTATE 38 10 5
MUTUAL FUND 35 9 6
POST OFFICE 29 8 7
SAVINGS 25 6 8
EQUITY SHARES 25 6 9
SAVINGS ACCOUNT 22 5 10
NSC
PPF

391 100

62
Suggestions and recommendations

▪ Due earn good return with the less capital risk, a investor have to be active while designing his
portfolio.
▪ Every attributes of investor life his age level, income level, his expectation level of effect on their
portfolio design.
▪ An investor should go with well diversified portfolio in compare to stick on only one and two
investment Avenues.
▪ Investors should take decision carefully because updation of portfolio is a costly affairs.
▪ Investors should update his knowledge continuously to grab good opportunities in market.
▪ Investors should make the investment with proper planning keeping in mind their investment
objectives.
▪ Investors should also consults the brokers or agents to seek information and advice but their
decision should not merely be based on agents advice rather the decision should be based on their
careful investigation.
▪ The investors should select a particular investment option on basis of their need and risk tolerance.
▪ The investors should diversify their investment portfolio in order to reduce the risk. The investors
should continuously monitor their investments.
▪ The companies should provide all relevant information to the investors.
FUNDING:-

▪ The study reveals that male investors dominate the investment market in india ▪ Most of the
investors possess higher education like graduation and above.
▪ Majority of the active and regular investors belong to accountancy and related employment; non
financial management and some other occupations are very few.
▪ Most investors opt for two or more sources of information to make investment decision.
▪ Most of the investors discuss with their family and friends before making an investment decision.
▪ Percentage of income that they invest defend on their annual income, more the income percentage
of income they invest.
▪ The investors decision are based on their own initiative.
▪ The investment habit was noted in most of the people who participated in the study.
▪ Most investors in prefer to park their funds in Avenues like life insurance, FD, Gold and real
estate.
▪ Most of the investors get their information related to Investment through electronic media (TV)
next to print media (newspapers/business newspapers / magazines).
▪ Most of the investors are financial illiterate.
▪ Increase in age decrease the risk tolerance level.

63
▪ Women are attracted towards investing gold than any other investments Avenues.
• The researcher has investigated 70 responses of India &
• It comes to know that 80% of people are knowing about The investment schemes where the
remaining 20% is Unknown.
• The main reason for people is higher return in the future With a secured amount of invested
money.
• Most of the people invest more in FD so that they get a Fixed amount of return at low return.
• From table no. 7 We come to know that 50% of people Invest in FD, 30% of people invest in
mutual funds and Only 20% of people invest in the stock market.
• They invest less amount in the stock market because they Think it is not giving proper return or
any fixed return Amount as FD and a little bit of mutual fund and mutual Fund give 12% of a
fixed amount of invested amount. But they don’t know that the stock market gives more Than
this investment.
• From table no. 6 we come to know that if we invest 2 Lakh rupees in a debt fund and fixed deposit
at a rate of Interest of 7% for 3 years after tax deducted we get a Total amount in debt fund Rs.
35094 and in fixed deposit We get Rs.26500. So from this, we come to know that We get more
amounts in return in debt funds than in Fixed deposit amounts.
• From table no. 1 we came to know that people invest 90% in mutual funds and the 2 nd invested
option is most Preferable by people is 70% in metal and the 3rdInvested option is bank deposit i.e.
60%.

64
 CONCLUSION
The study confirms the earlier finding with regard to the relation between age and risk tolerance level of
individual investors. The present study has important implications for investment manager as it has come
out with certain interesting facets of an individual investors. The individual investor still prefer to invest in
financial products which give risk free returns. This confirm that Indian investors even if they are of high
income, well educated, salaried, independent and conservative investors prefer to pay safe.The investment
products designers can design products which can cater to the investors who are low risk tolerant and use
TV as a marketing media as they seem to spend long time watching TVs.
After the study of various investment avenues through The investigation, it comes to know that the
people who are Investing their money are well known about investing Avenues that are present in the
current market in India but Still, people are more preferred with bank deposits than Other investments.
The study of investors tells that the safety And high return of money as a vital factor while saving their
Money in any investment, so other options of investing Amount is less found less preferable in
investment by People.
People refer mostly to normal interest amounts Rather than heavy risk that they can get more amount in
Return. From the analysis people started investing amounts In the stock market to earn more profit by
taking high risk. Also they can balance their risk with investing in secured Investment avenues such as
bonds, debentures

65