Investment Pattern of Investors (2)
April 5, 2017 | Author: Ne Ha | Category: N/A
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Garima Singh Chandel Geetam Sharma r Harsh Awasthi 0 agjeet Singh Î peha å Prabhat Kumar Prince Kumar Gupta A PriyaMahajan X Puneet Sharma
CUHP10MBA10 CUHP10MBA11 CUHP10MBA12 CUHP10MBA13 CUHP10MBA14 CUHP10MBA15 CUHP10MBA16 CUHP10MBA17 CUHP10MBA18
Preservation, inspiration and motivation have always played a key role in thesuccess of any venture. In the present world of cutthroat competition projectis likely a bridge between theoretical and practical working, willingly we haveprepared this particular project. We feel highly delighted with the way our project report on topic has been completed. Any accomplishment requires the efforts of many people and thiswork is not different. We would like to extend our sincere thanks to (Assistant Professor) CUHP for his co-operationand providing us good environment to work on and provide the fruitfulguidance to complete the project.
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Investment is the employment of funds with the aim of achieving additional income or growth in value. he essential quality of an investment is that it involves "waiting" for a reward. It involves the commitment of resources, which have been saved or put away from current consumption in the hope that some benefits accrue in future. Broadly speaking, an investment decision is a trade-off between risk and return. All investment choices are made at points of time in accordance with the personal investment ends and in contemplation of uncertain future.
? An investor is any party that makes an Investment.However, the term has taken on a specific meaning in finance to describe theparticular types of people and companies that regularly purchase equity ordebt securities for financial gain in exchange for funding an expanding company. ess frequently the term is applied to parties who purchase realestate, currency, commodity derivatives, personal property, or other assets. he term implies that a party purchases and holds assets in hopes ofachieving capital gain, not as a profession or for short-term income.
? ? M : (including trusts on behalf of individuals, and umbrella companies formed for two or more to pool investment funds)
M M , either individually or in groups M , which serve as investment collectives on behalfof individuals, companies, pension plans, insurance reserves, or otherfunds.
M M , including real estate investment trusts M , hedge funds, and other funds, ownership of which mayor may not be publicly traded investment.
?? ? - Investment or investingis a term with several closely-related meanings inbusiness management, finance and economics, related to saving or deferringconsumption. An asset is usually purchased, or equivalently a deposit ismade in a bank, in hopes of getting a future return or interest from it.
? ?? he term "investment" is used differently in economics and in finance.conomists refer to a real investment (such as a machine or a house), whilefinancial economists refer to a financial asset, such as money that is put intoa bank or the market, which may then be used to buy a real asset.
£ he investment decision (also known as capital budgeting) is one of thefundamental decisions of business management: managers determine theassets that the business enterprise obtains. hese assets may be physical(such as buildings or machinery), intangible (such as patents, software,goodwill), or financial (see below). he manager must assess whether thenet present value of the investment to the enterprise is positive; the netpresent value is calculated using the enterprise's marginal cost of capital.
£ In economics, investment is the production per unit time of goods, which arenot consumed but are to be used for future production. xamples includetangibles (such as building a railroad or factory) and intangibles (such as ayear of schooling or on-the-job training). In measures of national incomeand output, gross investment is also a component of Gross domesticproduct (GP), given in the formula . is dividedinto nonresidential investment (such as factories) and residential investment(new houses). "pet" investment deducts depreciation from gross investment.It is the value of the net increase in the capital stock per year.
£ In finance, investment is buying securities or other monetary or paper(financial) assets in the money markets or capital markets, or in fairly liquidreal assets, such as gold, real estate, or collectibles. aluation is the methodfor assessing whether a potential investment is worth its price.
£ Within personal finance, money used to purchase shares, put in a collectiveinvestment scheme or used to buy any asset where there is an element of capital risk is deemed aninvestment. Saving within personal finance refers to money put aside, normally on a regular basis. his distinction is important, as investment risk can cause a capital loss when an investment is realized; unlike saving(s) where the more limited risk is cash devaluing dueto inflation. In many instances the terms saving and investment are used interchangeably,which confuses this distinction. or example many deposit accounts are labelled as investmentaccounts by banks for marketing purposes. Whether an asset is a saving(s) or an investment depends on where the money is invested: if it is cash then it is savings, if its value can fluctuate then it is investment.
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In real estate, investment is money used to purchase property for the sole purpose of holding or leasing for income and where there is an element of capital risk. Unlike other economic or financial investment, real estate is purchased. Broad of speaking, a person can make use of his income in three alternatives. hey are saving, investment and expenditure. If he saves more then he will have to reduce on his expenses and vice versa. o meet the current and future financial requirement of the person, a right combination of these is essential. hese few lines explain the importance of a right combination ofthe three activities. his is what we mean by investor investment pattern & thus comes the need of awareness initiatives for this concept.
An Investor has many objects for doing the investment some are doing investment for security purpose some are doing for high return purpose and some for tax benefits. Same income and age group people follow differentpattern of investment and to understand this pattern is very complex. esearchers try to find out the investment pattern of Investor¶s in Mutual und & ife Insurance.
r ?? ? he options for investing our savings are continually increasing, yet every single investment vehicle can be easily categorized according to three fundamental characteristics - safety, income and growth - which also correspond to types of investor objectives. While it is possible for an investor to have more than one of these objectives, the success of one mustcome at the expense of others. Here we examine these three types of objectives, the investments that are used to achieve them and the ways in which investors can incorporate them in devising a strategy. M Perhaps there is truth to the axiom that there is no such thing as a completely safe and secure investment. Yet we can get close to ultimate safety for our investment funds through the purchase of government-issued securities in stable economic systems, or through the purchase of the highest quality corporate bonds issued by the economy's top companies. Such securities are arguably the best means of preserving principal while receiving a specified rate of return. he safest investments are usually found in the money market and include such securities as reasury bills ( -bills), certificates of deposit, commercial paper or bankers' acceptance slips; or in the fixed income (bond) market in the form of municipal and other government bonds, and in corporate bonds. he securities listed above are ordered according to the typical spectrum of increasing risk and, in turn, increasing potential yield. o compensate for their higher risk, corporate bonds return a greater yield than -bills.
M However, the safest investments are also the ones that are likely to have the lowest rate of income return, or yield. Investors must inevitably sacrifice a degree of safety if they want to increase their yields. his is the inverse relationship between safety and yield: as yield increases, safety generally goes down, and vice versa. Most investors, even the most conservative-minded ones, want some level of income generation in their portfolios, even if it's just to keep up with the economy's rate of inflation. But maximizing income return can be an overarching principle for a portfolio, especially for individuals who require a fixed sum from their portfolio every month. A retired person who requires a certain amount of money every month is well served by holding reasonably safe assets that provide funds over and above other income-generating assets, such as pension plans.
M - ! his discussion has thus far been concerned only with safety and yield as investing objectives, and has not considered the potential of other assets to provide a rate of return from an increase in value, often referred to as a capital gain. Capital gains are entirely different from yield in that they are only realized when the security is sold for a price that is higher than the price at which it was originally purchased. (Selling at a lower price is referred toas a capital loss.) herefore, investors seeking capital gains are likely not those who need a fixed,ongoing source of investment returns from their portfolio, but rather those who seek the possibility of longer-term growth. Growth of capital is most closely associated with the
purchase of common stock, particularly growth securities, which offer low yields but considerable opportunity for increase in value. or this reason, common stock generally ranks among the most speculative of investments as their return depends on what will happen in an unpredictable future. Blue-chip stocks, by contrast, can potentially offer the best of all worlds by possessing reasonable safety, modest income and potential for growth in capital generated by long-term increases in corporate revenues and earnings as the company matures. Yet rarely is any common stock able to provide the near-absolute safety and Income-generation of government bonds.
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? "# An investor may pursue certain investments in order to adopt tax minimization as part of his or her investment strategy. A highly paid executive, for example, may want to seek investments with favourable tax treatment in order to lessen his or her overall income tax burden. Making contributions to an IA or other tax-sheltered retirement plan, such as a 401k, can be an effective tax minimization strategy
Many of the investments we have discussed are reasonably illiquid, which means they cannot be immediately sold and easily converted into cash. Achieving a degree of liquidity, however, requires the sacrifice of a certain level of income or potential for capital gains. Common stock is often considered the most liquid of investments, since it can usually be sold within a day or two of the decision to sell. Bonds can also be fairly marketable, but some bonds are highly illiquid, or non-tradable, possessing a fixed term. Similarly, money market instruments may only be redeemable at the precise date at which the fixed term ends. If an investor seeks liquidity, money market assets and non-tradable bonds aren't likely to be held in his or her portfolio. In brief, choosing a single strategic objective and assigning weightings to all other possible objectives is a process that depends on such factors as the investor's temperament, his or her stage of life, marital status, family situation , and so forth. You need only be concerned with spending the appropriate amount of time and effort in finding, studying and deciding on the opportunities that match your objectives.
Î ?? ? ? A common man in India generally go with postal saving schemes, fixed deposits or other bank deposits for their investment. hey don't look beyond that. But, if they can update themselves then definitely can get a good return. ne more thing is Indian investors don't want to take risks. hey are risk averters not lovers. But, they always try to find best option. here are so many investment options in the market.
" It is the most popular investment option in India. It yields up to 6.5% to 10% annual return depends on the Bank and period. o invest in this option minimum period is 15 days and maximum period is 7 years and above. It is a very safe investment option. Because, all banks run their operations under the guidelines of eserve Bank of India.
his option is more popular in rural India. It yields up to 4 % to 7% annual return depends on period.
his is the safest investment option. Because, µpational saving certificate' is come under government of India. Here, you can start your investment with 100 rupees and no upper limit. ock in period will be 6 years. And yield will be 8% annual. You can also get income tax deduction up to one lakh rupees investment in µpational saving certificate'.
Public provident fund is also a government backed investment instrument. You can start your investment by 500 rupees and maximum 70,000 rupees in a financial year. And yield will be 8.5% annual. You can also get income tax deduction up to one lakh rupees investment in Public Provident und. Here, lock in period is 15 years.
Mutual und is nice option to get quick return. But, it's a risky investment option. Because, companies collect money from investors and invest in stock markets and money markets. And whatever return is come out that is distributed between investors. But, if you are ready to take risk then you can investment in stock market also. It's a great option to get more returns. But, before investing in stock markets you should have a good knowledge about its operation. Because, lots of uncertainties prevail in the market. Apart from all these instruments some more options are in the market, like, bond and debentures. It is a long-term debt instrument used by governments and large companies to obtain funds. But, investment should be done in prudent way according to their requirement and risk taking capability.
? ? he various financial instruments, for example Govt. securities , Commercial Papers, Certificate of eposits, Preference Shares, Call Money Market etc, available in the Indian financial markets. his paper provides a brief description of all of these. Several financial instruments are available in the Indian money market. hese are government securities, or G-sec, preference shares, commercial papers, equity shares, discussed below. - In India, mainly the institutional investors buy the government securities. he government, both State and Central, and the government certificate of deposits, call money market and industrial securities. hese are authorities, for example, state electricity boards, municipalities etc issue it. Commercial banks are the biggest investors who buy the G-securities. he government collects money through the Gsecurities to finance its several new infrastructure development projects or to meet its present needs. he government itself issues the risk of default for G-sec, for it. hese carry a fixed dividend rate and a special right to dividends over the private equity holders. Currently, all the preference shares in the Indian Market are `redeemable¶, that is, they have a fixed period of maturity. herefore, sometimes they are termed as hybrid variety.
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hese are issued mainly by the corporate businessmen to fund their working capital needs. Commercial Papers are issued generally for short-term maturities. Commercial papers are not secure and subject to market risks, so those corporate bodies that have a good credit history will only be able to use this financial instrument.
0 It is a "high return risk" instrument. quity shares don't have any fixed return rate and thereby, no period of maturity.
Î $% hese are very similar to the Commercial papers. But the Cs are issued mainly by the commercial banks.
å he loans made in the call money market are mainly short term in nature. Call money market mainly deals with the interbank markets. hose banks that are suffering from a short-term cash deficit borrow cap from the call money market.
pormally the big corporate bodies are used to issue this to fulfil their long-term requirements regarding working capital. he £ ebentures £ equity £ shares fall under this category.
å S A BApK IpIA CApAA BApK r PUp AB pA IpA BApK 0 Ip A BApK CMMC Î S A BApK PA IAA å HC BApK ICICI BApK & IApC I IpSUApC X I IpSUApC CPA Ip ' KApGA C-PA I BApK . IBI BApK
?- ?? Ip IICA Ip CUS MS PpC: with the survey on investment pattern, we can identify customer preference towards investment in different options .
he study will be helpful for the companies who are involved in investment banking to adopt a proper marketing strategy.
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he main objective of the study is to find out the investment pattern of the investors in raman and its sub-urban areas. o determine what factors influence them while they choose a particular investment, a particular company and in which particular scheme they prefer to invest and to find out whether they are satisfied with their investment decision or not.
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? IpS S 50 -? ApM SAMPIpG In random sampling, each item or element of the population has an equal chance of being chosen at each draw.
u he task of data collection is begins after a research problem has beendefined and research designed/ plan chalked out. ata collection is to gather the data from the population. he data can be collected of two types: £ £
` he Primary data are those, which are collected afresh and for the first time,and thus happened to be original in character. Methods of collection of Primary data are as follows: £ Interview £ Questionnaire
he Secondary data are those which have already been collected by someone else and which have already been passed through the statistical tool. Methods of collection of Secondary data are ournals, Websites and books. ?? ? M M M M M
Using available information bserving Interviewing (face-to-face) Administering written questionnaires ocus group discussions
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Usually there is a large amount of data that has already been collected by others, although it may not necessarily have been analysed or published. ocating these sources and retrieving the information is a good starting point in any data collection effort.
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BSA Ip is a technique that involves systematicallyselecting, watching andrecording behaviour andcharacteristics of living beings, objects or phenomena.
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An Ip IW is a data-collection technique that involvesoral questioning of respondents,either individually or asa group.
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A WI p QUS IppAI (also referred to as self-administeredquestionnaire) is adata collection tool in which written questions arepresented that are to be answered by therespondents in writtenform.
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A focus group discussion allows a group of 8 ± 12informants to freely discuss a certain subject with theguidance of a facilitator or reporter.
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his study will let us know the financial capacity of the people of raman and its sub-urban areas.
Corrective measures can be taken for the overall development of the region. his study helps in estimating the purchasing power of the people. his study helps to know about the response of the people of raman regarding the investment opportunities.
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In every research there are chances of errors and constraints. We have foundfollowing limitations in our study. Sample size, which we have taken, is very small, on the basis of which efficient decision can¶t be taken. espondents were biased in their responses because they were more in favour of the brand they were using. Co-operation from respondents, this was the major problem. Most of the people were at their work. So they did not have enough time to give all replies. he population surveyed was not open to questions related to their personal income i.e. either they fell hesitant in disclosing the facts about their incomes or they were simply not interested. he respondents were not in the favour to disclose their address and contact number because they believed that they would be contacted through telemarketing. ime factor. Cost factor.
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his study is based on the investment pattern of the people in and around raman and its suburban areas. So it will help acquaint us with the investment pattern of the local people. Also it will help find scope and opportunities for the future trends in the area. Also it will help in finding business potential in this area regarding mutual funds and other such options. Also this study is expected to contribute to incorporate future and new trends in the investment pattern in the area.
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he literature review includes the academic books, journals, internet access,magazines etc. - ( - he information regarding the statistical tools and their limitations in different fields the research is given in this section. his section explains why to use correlation and what are the 47 situations in which correlation can be used, and what does correlation means. ) he information regarding the basics of research and research methodology, what are the different types of research designs, what is problem statement, what are the sources of data collection and what are the methods of data collection is given in this section he information regarding nature of financial management, portfolio management, risk-return relationship, options, derivatives and valuation of shares have been understood from this book. )) he information about the basic knowledge and working of mutual funds in India is taken from this book.
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" oday investors are smart and prudent when it comes to investing. hey look for investment options that create maximum value based on their needs and desires. In raman and its suburban areas, it is perceived that majority of the investors prefer to invest their funds either in bank deposits or in gold. his brings us to the assumption that investments in mutual fund are not so popular among the general public. A study was conducted to f ind out the general investment pattern of the residents in raman and its sub-urban areas in order to identify customer¶s preference towards investment in different investment options. A survey was conducted on 50 respondents comprising of individual investors among all income groups
spread across the area. Information was collected using questionnaires and by conducting direct interviews. he survey revealed that, contrary to the assumption made prior to the survey life insurance corporation and fixed deposits were found preferable among the investors. Moreover investors tend to look into the current economic conditions before investing. When it comes to investing, investors tend to have a low risk appetite as a sudden crash in the markets creates a panic and makes more people move away from the stock market. Some of the investors who have invested in mutual funds have been deceived by mutual fund agents and brokers by miss-selling financial products. hey were in favour of setting up a provision for investor grievance re-dressal which can help them to address their complaints or suggestions.
Investor is any party that makes an investment. In finance these are the people and companies that purchases equity and debt securities in exchange of funding and expanding company. So, the investment is what the investor invests.conomists refer to a real investment (such as a machine or a house), whilefinancial economists refer to a financialasset, such as money that is put intoa bank or the market, which may then be used to buy a real asset. So the study performed gave the following results of sample of 30 people: he maximum age group that responded to the questions were of age 30 ± 45 yrs. heir occupation was mainly business. he people were paying no income tax were 22 persons and the rest were paying income tax. he yearly income of 16 people were 1 -3 lakhs. Minimum people invested in the mutual funds i.e. 2 in number. Also maximum investment was seen in IC and the number of people invested was 26. Percentage of income invested yearly by 23 persons was 0 ± 20 % of their income. he amount invested mainly for child planning purposes and little money was invested in education planning process. Around 23 people had taken loan for the above mentioned purposes and rest didn¶t take any type of loan. 26 people had invested for long term process and rest for short term and the main purpose was for returns and tax saving. But maximum of the people invested for returns. hus, the people here invested very less for the education purpose and their main focus was on the investment in the business.
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++++++++++++++++++++++++++++++++++++++++++++++++++++++++++++++ ++++++++++++++++++++++++++++++++++++++++++++++++++++++++++++++++ " ++++++++++++++++++++++++++++++++++++++++++++++++++++++++++++++++ ++++++++++++++++++++++++++++++++++++++++++++++++++++++++++
+++++++++++++++++++++++++++++++++++++++++++++++++++++++++++++ ----------------------------------------------------------------------------------------------------- % a) 18 ± 30
b) 30 ± 45
c) 45 ± 55
d) 55 & above
b) private services
c) business
%! a) Government service d) thers r% " a) Yes b) po 0% ! a) Below 1lakh
b) 1-3lakhs
c) 3-5lakhs
d) 5lakhs & above
Î% a) PP b) fixed deposit c) mutual funds d) real estate
e) gold f) IC
å% ! * a) 0-20% b) 20-35% c) 35-50% d) 50% & above %! ! ! a) child planning b) education planning c) retirement planning
d) tax planning
&% !
a) yes b) no If yes then tick one or more applicable- a) Housing loan b) vehicle loans
c) education loan
e) Marriage loan X% ! ! a) Short term (0-5yrs)
b) long term (5 & above)
'% a) eturns
b) liquidity c) wealth
d) tax savings
d) business loan
- £ 9th edition by ³I.M. Pandey.´ icaspublication house pvt ltd. £ 2nd edition by ³C.. Kothari´ .pew ageinternational publication, £ 14th edition by ³S.P. Gupta&M.P.Gupta.´SultanChand & Sons publication. £ 3rd edition May 2006 by ³Association of Mutualunds in India.´ http://www.insurance.com/ifeArticles.aspx http://www.amfiindia.com http://www.investopedia.com/articles/basics/04/032604.asp http://finance.indiamart.com/taxation/income_tax/tax_plan ning.html http://www.indiainfoline
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