RISK AND RETURNS FROM VARIOUS INVESTMENT

Submitted by: Gaurav Swati Ripanu Megha Mukul

INVESTMENT OPTIONS IN INDIA1.Bank Fixed Deposits (FD) 2.Insurance policies 3.National Saving Certificate (NSC) 4.Public Provident Fund (PPF) 5.Stock Market 6.Mutual Funds 7.Gold Deposit Scheme 8.Real Estate

PURPOSE OF THE RESEARCHTo find out the investment pattern of different class of investor. To find out how investors get information about the various financial instruments. The type of financial instruments, they would prefer to invest. The duration for which they would prefer to keep their money invested. The rate of return they would likely to earn from the investment.

Information Collection FrameworkSelecting Method of data : Primary sources-getting respondent to answer the questionnaire.

Scaling Techniques : Quantitative Sample Selection : Salaried/Self Employed/Professional/Retired. Sample Size : 250

Type of Sampling : Simple

Analyses and Interpretation of DataGENDER AGE GROUP

27.60%Male Female

21.60%

16.80%18-25 25-35 35-45

72.40%

28.40%

33.20%

45 Above

EDUCATIONAL QUALIFICATION

Graduate

18.80% 18.80% 25.20%Post Graduate Professional Others

OCCUPATION

37.20%

11.60%

7.20%Salaried

34.00%47.20%

Self Employed Professional Retired

What is your frequency of investments?

FREQUENCY OF INVESTMENTS12.65%

26.13%22.04% 24.08% 15.10%

Weekly Monthly Quarterly Half Yearly Yearly

Respondents prefer weekly investments followed by half yearly.

What is the most preferred investment type?

6.12% 6.53%

8.16%

PREFERRED INVESTMENT TYPEBank Fixed Deposits

30.20%

10.20%3.67% 16.35% 17.14% 1.63%

National Service Schemes Insurance Policies Stock Market Commodities Real Estate

Bank Fixed Deposits are most preferred investment type.

DID YOU GET ADEQUATE RETURNS FROM YOUR INVESTMENTS? ADEQUATE RETURNS13.06%

Yes

No

86.94%

Most of the respondents feels that they are getting adequate returns.

YOUR DECISION TO INVEST DEPENDS UPON?0.43% 14.69% 18.77%

DECISION DEPENDENCYPast Performance Economic Scenario Industry Analysis Advice

21.22% 44.89%

Others

Most of the investment decisions are taken according to economic scenario followed by industry analysis

ARE YOU CURRENTLY SATISFIED WITH YOUR INVESTMENTS?

SATISFIED WITH INVESTMENT

19.18%

Yes No80.82%

Most of the respondents are satisfied by their investments

WHAT IS YOUR OBJECTIVE OF INVESTMENT?OBJECTIVE OF INVESTMENT

42.44%

36.73%

Return Tax Saving Savings

20.83%

Savings is the main objective of the investment

INVESTMENTS PRIORITIESAs per the respondents the ranks for the investments are as follows

1.Bank Fixed Deposits 2.Insurance Policies 3.Real Estate 4.Stock Market 5.Mutual Funds 6.Public Provident Funds 7.Commodities 8.National Saving Certificates

INVESTMENT DECISION5 4.5 4

3.5

3

RATING

2.5

2

1.5

1

0.5

0

Research Reports Rating

2.8

Family/ friends Opinion 4.6

Newspaper/ News Channel 3.9

Stock Broker Advice 3.2

Co Worker Opinion 4.4

WHAT TYPE OF INVESTMENT YOU OPT FOR?DEGREE OF RISK OF THE INVESTMENT6.12%

47.75% 46.13%

Less Risky Moderately Risky Highly Risky

Less Risky and Moderate Risky is highly preferable.

AVERAGE RATE OF RETURN YOU EXPECT?AVERAGE RATE OF RETURN EXPECTED

7.75% 21.23%

Up to 10% 30.61%More than 10% Up to 15% More than 15% up to 20% More than 20% 40.41%

Most respondent expect More than 15% up to 20%

WHICH INVESTMENT HAS GENERATED YOU THE MOST REVENUE?INVESTMENT WHICH HAS GENERATED MOST REVENUE TO THE RESPONDENT Bank Fixed Deposits5.71% 5.71% 18.36% 3.65% National Service Schemes Insurance Policies Stock Market 4.90% 22.49% 15.51% Commodities Real Estate Mutual Funds 7.35% 16.32% Public Provident Funds Others

Real Estate has generated highest profit to the respondents.

ACCORDING TO YOU WHICH INVESTMENT IS MOST RISKY?2.86% 2.86%

RISK FACTOR OF THE INVESMENT0.82% 0.40% 1.22%

0.82%

Bank Fixed Deposits7.35%

National Service Schemes Insurance Policies Stock Market

21.63%

Commodities Real Estate62.04%

Mutual Funds Public Provident Funds Others

Investing in Stock Market in most risky according to respondents

What is your investment horizon?INVESTMENT HORIZON

41.23% 58.77%

Short Term (0-3 Yrs.) Long Term (3 yrs. above)

Long term investment is mostly preferred by respondents

How do you overcome the risk existing in financial market?

HOW DO RESPONDENTS OVERCOME THE RISK2.04% Financial Expert 24.49% 29.80% 43.67% News Paper Friends / Co-workers Others

Most of the respondents seek the advice of financial experts

COMPARISON B/W SALARIED, SELF EMPLOYED PROFESSIONAL & RETIRED ON FOLLOWING BASIS:1. INVESTMENTS OPTIONS2. FREQUENCY OF INVESTMENT 3. OBJECTIVE OF INVESTMENT

INVESTMENT OPTIONS35

3025 20

1510 5 BANK MUTUA COMM INSURA DEPOSI L ODITIES NCE TS FUNDS SALARIED 30 2 11 3 SELF EMPLOYED 25 7 22 9 PROFESSIONAL 13 0 6 2 RETIRED 6 0 3 2 Series5 0 0 REAL STOCK ESTATE MARKE S T 10 11 12 26 3 1 0 2 OTHER S 11 6 2 1

PPF 5 5 2 3

NSC 0 4 0 0

FREQUENCY OF INVESTMENT35 30 25 20 15 10

50 SALARIED SELF EMPLOYED PROFESSIONAL RETIRED WEEKLY 2 28 1 0 MONTHLY 24 17 6 7 HALF YEARLY 15 28 9 7 QUATERLY 13 20 4 0 YEARLY 29 23 9 3

OBJECTIVE OF INVESTMENTS60 50

4030 20 10 0 RETURNS TAX SAVINGS SAVINGS

SALARIED 13 43 27

SELF EMPLOYED 48 30 38

PROFESSIONAL 24 12 27

RETIRED 3 2 2

CONCLUSION:1. According to the survey done the most preferred investment options are Stock Markets, Fixed Deposits and Insurance. Most of the people said that this is because they incur greater returns and less risk. Fixed Deposits stands on the top position amongst the investing options followed by Insurance Policies and stock Market. Most of the people get information regarding these through Newspapers as well as magazines according to the analysis. Friends and relatives provide almost equivalent information and helps in making decisions. The major factor that the investors keep in mind is- Savings. Mostly people invest to maximize their savings while other majorities invest for returns and tax savings. Majority of the investors like to invest for a short duration of 1-3 years. Salaried, professionals and retired prefer to invest in fixed deposits whereas self employed prefer to invest in stock markets. Main objective for investment for salaried is tax savings whereas for self employed is returns.

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Limitations of Research: The study was limited to only eight investment options. The area of survey is limited (only Delhi, NCR, Mumbai, Allahabad) due to time constraint. Some people do not provide true information by questionnaire survey.

ITS NEVER TOO EARLY OR LATE TO START TO INVEST, BUT NEVER DO IT BLINDLY