This document summarizes a study on the investment perspectives of salaried people working in the private sector. It analyzes data collected through surveys of 50 salaried employees, with equal numbers of male and female respondents. The study finds that most respondents are married, between 41-50 years old, graduate level educated and working as executives. It analyzes differences in income, savings, investment amounts and avenues between male and female respondents. Most male respondents invest primarily in stock markets, mutual funds and real estate, while most female respondents invest in government securities.

1. 100180104981446
IRJCAsiaPacificJournal of Marketing& ManagementReview Vol.1No.2, October2012, ISSN 2319-2836
www.indianresearchjournals.com126 A STUDY OF INVESTMENTPERSPECTIVEOF SALARIEDPEOPLE
(PRIVATESECTOR) PROF.CA YOGESH P.PATEL*; PROF.CS CHARUL Y. PATEL** *Head of Departmentof
Accountancy, S.K. SomaiyaCollege of Arts,Science &Commerce,Universityof Mumbai,Maharashtra,
India.**AssistantProfessor,Departmentof Accountancy,SIESCollege of Commerce,andEconomics,
Universityof Mumbai,Maharashtra,India.ABSTRACTThe highestuse of capital isnot to make more
money,butto make moneydomore for the bettermentof life.‖ - HenryFordInvestmentisthe
employmentof fundswiththe aimof gettingreturnonit.It is the commitmentof fundswhichhave
beensavedfromcurrentconsumptionwiththe hope thatsome benefitswill accrue infuture.Thus,itis
a rewardfor waitingformoney.Sothe firststepto investmentissavings.Incommonusage,saving
generallymeansputtingmoneyaside,forexample,byputtingmoneyinthe bankorinvestingina
pensionplan.Inabroader sense,savingistypicallyusedtorefertoeconomizing,cuttingcosts,orto
rescuingsomeone orsomething.Intermsof personal finance,savingreferstopreservingmoneyfor
future use - typicallybyputtingiton deposit- thisisdistinctfrominvestmentwhere there isanelement
of risk.The mainelementsof Investmentsare Return,RiskandTime.Thisresearchaimstostudyand
understandthe behavioral patternof investmentamongthe salariedpeople workinginprivate sector
and the difference inperceptionof anindividual relatedtovariousinvestmentalternatives.Italsoaims
to provide aninsightintofactorsconsideredforanappropriate investment.Givesawiderscope to
understandvariousissuesrelatedtoinvestmentbysalariedpeople.KEYWORDS:Investment,Private
sector,SalariedandSaving.
____________________________________________________________________________IRJC Asia
PacificJournal of Marketing& ManagementReview Vol.1No.2,October2012, ISSN 2319-2836
www.indianresearchjournals.com127 INTRODUCTION OBJECTIVESTostudythe behavioral patternof
investmentsamongsalariedpeopleworkinginprivate sector.Tostudythe difference inperceptionof
an individualrelatedtovariousinvestmentalternatives.Toprovide aninsightintofactorsconsideredfor
an appropriate investment.HYPOTHESISThere are nodifferencesinthe consumptionandsavingpattern
of the sample test.LIMITATIONSThe studyshall be limitedtosalariedpeople whoare employedin
private sector.The studyislimitedtoMumbai cityonly.METHODOLOGY It isan exploratoryresearch.
Primaryand secondarydatawill be collected.Purposive samplingwill be usedtocollectprimarydata.
Sample size shall be total 50 salariedemployees.SAMPLEThe studysample comprisedof 50 salaried
people inprivate sector.Usingstratifiedrandomsamplingmethodthe salariedpeoplewere classified
intotwo categoriesonthe criterionof sex.25 were male and25 were female.Boththe respondents
male as well asfemale were salariedemployeesemployedinvariousCompaniesinmanufacturing,
tradingand service providingsectors.TOOLSA questionnaire wasframedconsistingof 20closedend
questionsandopenendquestionscoveringthe personal anddemographic profile,the awareness
relatedtomethods,modes,reasonsof savingandinvestmentandotherrelateddatawere collected.
IRJCAsiaPacificJournal of Marketing& ManagementReview Vol.1No.2, October2012, ISSN 2319-2836
www.indianresearchjournals.com128 DATA Using the surveymethodprimarydatawasobtainedfrom
the respondentsbyadministeringthe questionnaireandevaluatingthe feedback.Personal interviews
was alsoconductedwithfewrespondentswhoprovidedvaluable informationinputsSecondarydata

2. includedinformationcollectedfromvariousInternetdownload,Books,publicationsandvarious
journals.SAVINGSavingdiffersfromsavingsinthatthe firstreferstothe act of puttingaside moneyfor
future use,whereasthe secondreferstothe money itself once saved.Forexample:youmaydecide to
start saving10% of yourincome;because youaimfor yoursavingstogrow intoan amountsufficientto
buyan automobile.Incommonusage,savinggenerallymeansputtingmoneyaside,forexample,by
puttingmoneyinthe bankor investinginapensionplan.Inabroadersense,savingistypicallyusedto
referto economizing,cuttingcosts,orto rescuingsomeone orsomething.Intermsof personal finance,
savingreferstopreservingmoneyforfuture use - typicallybyputtingitondeposit - thisisdistinctfrom
investmentwhere there isanelementof risk.Savingiscloselyrelatedtoinvestment.Bynotusing
income tobuy consumergoodsandservices,itispossible forresourcestoinsteadbe investedby being
usedto produce fixedcapital,suchasfactoriesandmachinery.Savingcanthereforebe vital toincrease
the amountof fixedcapital available,whichcontributestoeconomicgrowth.SAVINGIN PERSONAL
FINANCEWithinpersonal finance,the actof savingcorrespondstonominal preservationof moneyfor
future use.A depositaccountpayinginterestistypicallyusedtoholdmoneyforfuture needs,i.e.an
emergencyfund,tomake acapital purchase (car, house,vacation,etc.) orto give tosomeone else
(children,tax bill etc.).Withinpersonal finance,moneyusedtopurchase shares,putina collective
investmentscheme orusedtobuyany assetwhere there isanelementof capital riskisdeemedan
investment.Thisdistinctionisimportantasthe investmentriskcancause a capital losswhenan
investmentisrealized,unlikecashsaving(s).Cashsavingsaccountsare consideredtohave minimal risk.
In the UnitedStates,all banksare requiredtohave depositinsurance,typicallyissuedbythe Federal
DepositInsurance CorporationorFDIC.Inextreme cases,abankfailure cancause depositstobe lostas
it happenedatthe start of the Great Depression.However,sincethe FDICwascreated,nodepositsin
the UnitedStateshave beenlostdue toa bankfailure.Inmanyinstancesthe termssavingand
investmentare usedinterchangeably.Forexamplemanydepositaccountsare labeledasinvestment
accounts bybanksfor marketingpurposes.Tohelpestablishwhetheranassetissaving(s) oran
investmentyoushould askyourself,"Where ismymoneyinvested?"If the answeriscashthenitis
savings,if itisa type of assetwhichcan fluctuate innominal value thenitisinvestment.IRJCAsiaPacific
Journal of Marketing& ManagementReview Vol.1No.2, October2012, ISSN 2319-2836
www.indianresearchjournals.com129 ELEMENTS OFINVESTMENTSA. RETURN: Investorsbuyor sell
financial instrumentsinordertoearnreturnon them.The returnincludesbothcurrentincome (current
yield) andcapital gain(capital appreciation).B.RISK:Riskisthe chance of lossdue to variabilityof
returnson an investment.Incase of everyinvestment,there isachance of loss.Itmay be lossof
investment;howeverrisksandreturnsare inseparable.C.TIME: Time isan importantfactorin
investment.Time perioddependsonthe attitude of investorswhofollow a‗buy‘& ‗hold‘policy.A
seriousmindedinvestorwill have toconsiderthe followingimportantcategoriesof investment
opportunities:- Protectiveinvestments.Tax orientedinvestment.Fixedincome investment.Speculative
investment.Emotionalinvestment.Growthinvestment.INVESTORPROFILEAninvestorprofileorstyle
definesanindividual'spreferencesininvestmentdecisions,forexample:Shorttermtrading(active
management) orlongtermholding(buyandhold) Riskaverse orrisktolerant/seekerAll classesof
assetsor justone (stocksfor example) Valuestock,growthstocks,qualitystocks,defensive orcyclical
stocks...Bigcap or small cap stocks,Use or not of derivatives Home turf orinternationaldiversification
Hands on,or via investmentfundsIRJCAsiaPacificJournal of Marketing&ManagementReview Vol.1

3. No.2, October2012, ISSN 2319-2836 www.indianresearchjournals.com130and so on. WHAT
DETERMINE AN INVESTORPROFILEThe style / profile isdeterminedbyObjective personal orsocial traits
such as age,gender,income,wealth,family,tax situation...Subjective attitudes,linkedtothe temper
(emotions)andthe beliefs(cognition) of the investor.Generally,the investor'sfinancial return/risk
objectives,assumingtheyare preciselysetandfullyrational.SPECULATIONInfinance,speculationisa
financial actionthatdoesnotpromise safetyof the initial investmentalongwiththe returnonthe
principal sum.[1] Speculationtypicallyinvolvesthe lendingof moneyorthe purchase of assets,equity
or debtbut ina mannerthathas not beengiventhoroughanalysisorisdeemedtohave low marginof
safetyor a significantriskof the lossof the principal investment. The term, "speculation,"whichis
formallydefinedasabove inGrahamand Dodd's1934 text,SecurityAnalysis,contrastswiththe term
"investment,"whichisafinancial operationthat,uponthoroughanalysis,promisessafetyof principal
and a satisfactoryreturn.Ina financial context,the terms"speculation"and"investment"are actually
quite specific.Forinstance,althoughthe word"investment"istypicallyused,inageneral sense,to
meanany act of placingmoneyina financial vehiclewiththe intentof producingreturnsoveraperiod
of time,mostventuredmoney—includingfundsplacedinthe world'sstockmarkets—isactuallynot
investment,butspeculation.INVESTMENTVS.SPECULATION Identifyingspeculationcanbe bestdone by
distinguishingitfrominvestment.AccordingtoBenGraham inIntelligentInvestor,the prototypical
defensive investoris"...one interestedchieflyinsafetyplusfreedomfrombother."He admits,however,
that "...some speculationisnecessaryandunavoidable,forinmany common-stocksituations,there are
substantial possibilitiesof bothprofitandloss,andthe risksthereinmustbe assumedbysomeone."
Many long-terminvestors,eventhose whobuyandholdfordecadesmaybe classifiedasspeculators,
exceptingonlythe rare fewwhoare primarilymotivatedbyincome orsafetyof principal andnot
eventuallysellingata profit.Speculatorscanbe increasinglydistinguishable byshorterholdingtimes,
the use of leverage,bybeingwillingtotake shortpositionsaswell as longpositions.A degree of
speculationexistsinawide range of financial decisions,fromthe purchase of ahouse to a bet ona
horse;thisiswhat modernmarketeconomistscall "ubiquitousspeculation‖.IRJCAsiaPacificJournal of
Marketing& ManagementReviewVol.1No.2, October2012, ISSN 2319-2836
www.indianresearchjournals.com131 DATA ANALYSISThe surveyconductedtoinvestigate―The
Investmentperspective of the salariedpeople inthe Private Sector‖whichdisclosesthe reasons,
methods,typesandmodesof investmentfollowedbythese people.The sample size of 50respondents
was surveyedoutof which25 were male and25 were female.The graphbelow depictsthe same.I
PERSONALPROFILE2) SAMPLE SIZE ParticularsNumber.Male 25 Female 25 Total 50 0 5 10 15 20 25 30
35 40 45 50 NumberMale Female Total Itisevidentfromthe chartthat the numberof male andfemale
respondentswere equal innumber.IRJCAsiaPacificJournal of Marketing&ManagementReview Vol.1
No.2, October2012, ISSN 2319-2836 www.indianresearchjournals.com1323) MARITAL STATUS
ParticularsMarriedUnmarriedMale 18 07 Female 23 02 Total 41 09 0 5 10 15 20 25 30 35 40 45 Married
UnmarriedMale Female Total It isevidentfromthe chartabove that mostof the respondents,maleas
well asfemale are all married.4) AGE GROUP ParticularsBelow 3030- 40 41- 50 Above 51 Male 05 08 06
06 Female 03 07 10 05 Total 08 15 16 11 0 2 4 6 8 10 12 14 16 Below 30 30-40 41-50 Above 51 Male
Female Total IRJCAsiaPacificJournal of Marketing& ManagementReview Vol.1No.2,October2012,
ISSN 2319-2836 www.indianresearchjournals.com133 It isevidentfromthe chart above thatmajorityof
the respondentsfall inthe age groupof 41 to 50 years andminimuminbelow 30.5) EDUCATION Details

4. Under graduate Graduate Postgraduate Professional Male 0214 06 03 Female 05 10 05 05 Total 07 24
11 08 0 5 10 15 20 25 UndergraduatesPostgraduatesMale Female total Itisobservedthatmaximumof
the respondentsare graduates,followedbypostgraduate andprofessionalswhereasthe minimumare
undergraduates.IRJCAsiaPacificJournal of Marketing&ManagementReview Vol.1No.2,October2012,
ISSN 2319-2836 www.indianresearchjournals.com134 6) DESIGNATION DetailsOfficerExecutive
Manager DirectorMale 04 10 06 05 Female 08 09 05 03 Total 12 19 11 08 0 5 10 15 20 OfficerExecutive
Manager DirectorMale Female Total Itisobservedthatthe majorityof the respondentsbothmale and
female are employedasExecutivewhereasminimumare onthe postof Director.7) FILING OF INCOME
TAX RETURN Particular Income Tax ReturnFilledIncome Tax ReturnNotFilledTradingMale 19 06
Female 08 17 Total 27 23 0 5 1 0 1 5 2 0 2 5 3 0 Income Tax ReturnFiledIncome Tax ReturnNotFiled
Male Female Total IRJCAsiaPacificJournal of Marketing&ManagementReview Vol.1No.2, October
2012, ISSN 2319-2836 www.indianresearchjournals.com135 It isobservedthatthe majorityof the male
respondentsfile theirIncome Tax Returnswhilemajorityof female respondentsdonotfile theirIncome
Tax Returns.8) ANNUALINCOMEParticulars1-2 Lac 2-5 Lac 5-10 Lac Above 10 Lac Male 03 09 07 06
Female 11 06 05 03 Total 14 15 12 09 0 2 4 6 8 10 12 14 16 1-2 Lac 2-5 Lac 5-10 Lac Above 10 Lac Male
Female Total Itis observedthatmajorityof the Male respondentshave annual Incomeinrange of 2-5
Lac while majorityof Female respondentshave annual incomeinrange of 1-2 Lac. 9) ANNUALSAVINGS
ParticularsBelow1Lac 1-2 Lac 2-4 Lac Above 4 Lac Male 04 11 06 04 Female 12 06 05 02 Total 16 17 11
06IRJC AsiaPacificJournal of Marketing& ManagementReview Vol.1No.2, October2012, ISSN 2319-
2836 www.indianresearchjournals.com136 0 2 4 6 8 10 12 14 16 18 Below 1 Lac 1-2 Lac 2-4 Lac Above 4
Lac Male Female Total It isobservedthatmajorityof the Male respondentshave annual Savingsinrange
of 1-2 Lac while majorityof Femalerespondentshave annual savingsbelow1Lac. 10) ANNUAL
INVESTMENT(CONSIDERINGTHE TOTAL OF ALL THE AVENUES) ParticularsBelow 1Lac 1-2 Lac 2-4 Lac
Above 4 Lac Male 03 13 07 02 Female 15 05 04 01 Total 18 18 11 03 0 5 10 15 20 Below 1 Lac 1-2 Lac 2-4
Lac Above 4 Lac Male Female Total Itis observedthatmajorityof the Male respondentshave annual
Investmentinrange of 1-2 Lac while majorityof Female respondentshave annual Investmentbelow 1
Lac.IRJC AsiaPacificJournal of Marketing&ManagementReview Vol.1No.2, October2012, ISSN 2319-
2836 www.indianresearchjournals.com137 11) AVENUESOFINVESTMENT ParticularsGovt.Stock
Market Mutual FundsGold Real Estate Male 03 11 05 02 04 Female 12 02 04 06 01 Total 15 13 09 08 05
0 2 4 6 8 10 12 14 16 Govt.Stock Market Mutual FundsGoldReal Estate Male Female Total It is
observedthatmajorityof Investmentof Male respondentsisinthe StockmarketfollowedbyMutual
Fund, Real Estate andGovenrmentSecuritieswhile the minimumisinGold.Whereasthe majorityof
Investmentof Femalerespondentsisinthe GovernmentSecuritiesfollowedbyGold,Mutual Fundand
Stock Marketwhile the minimumisinReal Estate theasthe first12) RETURN ON INVESTMENT
ParticularsLessthanor equal tothe prevailingMarketReturnMore than the prevailingMarketReturn
Male 10 15 Female 19 06 Total 29 21IRJC AsiaPacificJournal of Marketing& ManagementReviewVol.1
No.2, October2012, ISSN 2319-2836 www.indianresearchjournals.com138 0 5 10 15 20 25 30 Less
than or equal toPrevailingMarketReturnMore than PrevailingMarketReturnMale Female Total Itis
observedthatthe majorityof Male respondentsinvestinthose Avenuesof Investmentwhere the
Returnon Investmentismore thanthe PrevailingMarketReturn.Whereasthe majorityof Female
respondentsinvestinthose Avenuesof Investmentwhere the ReturnonInvestmentisLessthanor
Equal to the PrevailingMarketReturn13) PROPORTION OFSAVINGSTOINCOMEParticularsBelow10%

5. 10-20 %20-30% Above 30 % Male 03 14 07 01 Female 16 05 03 01 Total 19 19 10 02 0 5 10 15 20 Below
10% 10-20 % 20-30% Above 30 % Male Female Total IRJCAsiaPacificJournal of Marketing&
ManagementReviewVol.1No.2,October2012, ISSN 2319-2836 www.indianresearchjournals.com139
It isobservedthatmajorityof the Male respondentshave proportionof savingstoincome inrange of
10-20% while majorityof Femalerespondentshave proportionof savingstoincome inrange of Below
10%. 14) PROPORTION OFINVESTMENTTO INCOME ParticularsBelow 10% 10-20 % 20-30% Above 30 %
Male 04 14 06 01 Female 17 04 03 01 Total 21 18 09 02 0 5 10 15 20 25 Below 10% 10-20 % 20-30%
Above 30 % Male Female Total Itisobservedthatmajorityof the Male respondentshave proportionof
investmenttoincome inrange of 10-20% while majorityof Female respondentshave proportionof
investmenttoincome inrange of Below10%. 15) PROPORTION OFINVESTMENTTO SAVINGSParticulars
Below40% 40-50 % 50-60% Above 60 %Male 03 05 12 05 Female 08 10 05 02 Total 11 15 17 07IRJC Asia
PacificJournal of Marketing& ManagementReview Vol.1No.2,October2012, ISSN 2319-2836
www.indianresearchjournals.com140 0 2 4 6 8 10 12 14 16 18 Below 10% 10-20 % 20-30% Above 30 %
Male Female Total Itisobservedthatmajorityof the Male respondentshave proportionof investment
to savingsinrange of 50- 60 %while majorityof Female respondentshave proportionof investmentto
savingsinthe range of 40-50% . 16) REASON FORINVESTMENT ParticularsSafetyHigherReturnsAny
OtherMale 06 15 04 Female 16 07 02 Total 22 22 06 0 5 10 15 20 25 SafetyHigherReturnsAnyOther
Male Female Total IRJCAsiaPacificJournal of Marketing&ManagementReview Vol.1No.2, October
2012, ISSN 2319-2836 www.indianresearchjournals.com141 It isobservedthatthe majorityof Male
respondentsinvestforgettinghigherreturnsontheirfunds/savingswhereasmajorityof female
respondentsinvestforsafetyof theirfunds/savings.17) PREFERENCE OFINVESTMENT ParticularsHigher
ReturnswithHighRiskLowerReturnswithLowerRiskMediumReturnswithMediumRiskMale 13 04 08
Female 03 12 10 Total 16 16 18 0 5 10 15 20 25 HigherReturnswithHighRiskLowerReturnswithLower
RiskMediumReturnswithMediumRiskMale Female Total Itisobservedthatthe male respondents
preferHigherReturnswithHighRiskwhile the female respondentspreferLowerReturnswithLower
Risk.18. SATISFACTION FROMINVESTMENTParticularsYESNO NOTCLEAR Male 12 06 07 Female 06 08
11 Total 16 14 20IRJC AsiaPacificJournal of Marketing& ManagementReview Vol.1No.2, October
2012, ISSN 2319-2836 www.indianresearchjournals.com142 0 5 10 15 20 YES NO NOTCLEAR Male
Female Total Itis observedthatthe Male respondentsare satisfiedwiththeirsavingsandinvestments
while the femalerespondentsare notclearon the matter.CONCLUSIONSThe economyisprospering,
the job marketisboomingandsalariesare touchinga new high.The new breedof Indianyouthhasits
pocketsfull andisintelligentenoughnottoletitsmoneyrustinbank accounts.Investmentisontheir
mindand an optionthathas the potential tomultiplytheirsavingsandprovidemaxi-mumtax rebate is
the one theycrave.Traditional savingoptionslikepostoffice schemesandfixeddepositsare now passé.
―Optionslike postoffice schemesandfixeddepositsare notverypopularwiththe youthasthe rate of
interestonthemislowerascomparedto otherin-vestmentoptionsavailable.Safetyandsecuritywhich
were once upona time the mainreasonsfor investmentare nolongerthe majorcriteriathat determine
the choice of investment.Withmoneyinhandandage on theirside,the younginvestorsare not
hesitantintakingrisk.―Fixeddepositsare nota veryattractive investmentoptionforyoungstersthese
days.Most of the people whooptforfixeddepositsare seniorcitizensisrevealedinone of the surveys
conductedinIndia.Savingtax isone of the majorreasonsbehindinvestmentbythe youth.Traditional
savingschemesdonotprovide anytax benefitsandare,therefore,keepingthe youngstersawayfrom

6. them.―WhyshouldIinvestinfixeddepositsandpostoffice schemeswhentheyprovide notax rebates
and the rate of returnon themis fixedandalsolowerthan otherinvestmentoptions,‖iswhatYoung
saverand investorhastosay. Mutual fundisthe most favoredoptionof the youngsterstoday.―The
stock marketisdoingso well.Iama little apprehensive aboutinvestingdirectlyinthe stockmarketbut
at the same time Iwant to avail of the benefitsof the rapidlyrisingstockmarket.So,mutual fundsare
the bestoptionforme iswhat a 30 somethingInvestorhastosay. Investmentinmutual fundsthrough
the SystematicInvestmentPlan(SIP)isafavouredinvestmentoptionforthe youngsters.Thisis
especiallytrue of the youngsalariedclasswhichhasjuststartedearninganddoesnothave a fatbank
balance as yet.―Incase of SystematicInvestmentPlans,insteadof bulkpayment,asmall amountisto
be paideverymonth.Thismakesthemverypopularwiththe salariedclasswhofinditdifficulttoshell
out a large amountat one go.Real Estate marketisalsothe one whichyoungsterspreferafterall the
above ones.Especiallyinacity like Mumbai where Real estate isIRJCAsiaPacificJournal of Marketing&
ManagementReviewVol.1No.2,October2012, ISSN 2319-2836 www.indianresearchjournals.com143
alwaysonthe highor up,thisis notat all badinvestmentoption.Butthere isnofixedreturnandthe risk
and amountof investmentishigh.OtherTraditional Investmentoptionlike the FixedDepositorthe Post
Office schemes(PPF/NSC/NSS/KVP/IVP) are losingtheirwaydue toblockingof fundsandlower
returns.Goldisstill preferredtosome extentespeciallywhenitcomestofemales.Due torise inprice of
goldfromsomewhere around4,000-5,000 in2003 to around17,000 in2010, goldis still shiningasan
investmentoption.Youngsterstodayare aware of what ishappeningaroundthemandare intelligent
enoughtodecide whatisbestfor them.Everyoptionisconsideredandthe prosandcons of each
weighedcarefullybefore the decisiontoinvestthe hard-earnedmoneyistaken.RECOMMENDATIONSIn
investingmoney,the amountof interestyouwantshoulddependonwhetheryouwanttoeat well or
sleepwell. - J.KenfieldMorleyAre youonthe road to a secure future?The followingpointsshouldbe
keptinmindwhile takingthe decisionsrelatedtosavingsandinvestmentof the savings:SAFETYOF
YOUR INVESTMENTWhat do youneedtolookfor while investingtoensure thatyourinvestmentissafe?
The factors that youneedto lookforwouldvarywiththe type of investment.Forexample,inthe case of
shares,the safetymaybe partiallygaugedfromquantitativedatasuchas the past trendin the price of
the stock,the financial performance of the company;italsomaybe supplementedwithqualitative
factors suchas the reputationof the company.Analyzingbalance sheetsandprojectreports,however,
require agreat deal of expertise andtime,whichisusuallybeyondthe scope of the retail investor.
Therefore,the reputationof the issuerremainsthe onlyguide available.CREDITRATINGWhenitcomes
to depositsorbondsissuedbypubliccompaniesorfinancial institutions,aninvestorcanrelyoncredit
ratings.A CreditRatingisan evaluationof the safetyof aninstrumentmade byanagency.These
agenciesundertake adetailedanalysisof the issuer'sstrengthsandweaknesses.The ratingisallotted
basedon a formulathatalsoincorporatespastperformance andvolatility.Theyhave alarge andexpert
infrastructure thatallowsthemtomake the kindof financial judgement,beyondthe scope of an
individualretail investor.TYPEOFRETURN The returnon investmentmay consistof appreciationinthe
value of the investmentorreceiptof income orboth.The firsttype of returnis typical of real estate
whereasthe secondtype isIRJCAsiaPacificJournal of Marketing& ManagementReview Vol.1No.2,
October2012, ISSN 2319-2836 www.indianresearchjournals.com144 obtainedasinterestonloansor
fixeddeposits,savingscertificates,bondsordebentures.Bothincome aswell asappreciationinvalue
couldbe got from equitysharesof goodcompanies.RISK - RETURN LINKAGEOne needstobe aware that

7. there isa directrelationshipbetween'Return'onour investmentandthe 'Risk'of losingthem.Higher
the return,greateris the possibilityof loss.The SavingsBankAccountunderthe presentruleslaiddown
by the Reserve Bank of India,givesinterestdependingonthe durationof the deposit.A long-term
depositgivesahigherrate of interest.The possibilityof losingourmoneyinthe savingbankaccountis
almostnegligible,exceptinremote casesof small-timeco-operative banks.While the riskof losing
moneyisalmostabsent.The SavingBankAccountsand BankFixedDepositsofferinterestof 4.5 and9
percent perannum respectively.The CompanyFixedDepositsoffersomewhatbetterratesof 12 to 15
percent perannum.Buildingcontractorsandfilmproducersofferveryhighreturnssuchas24 to 36 per
centper annum,butthe probabilityof losingthe entire principalamountinthiscase isveryhigh.THE
TAX FACTORReturnon investmentinthe formof income,attractsincome tax underthe Income Tax Act.
Incidence of thistax dependsonthe type of the investmentincome andthe quantumof outother
income.The interestonSavingsBankAccountsandBank FixedDepositsiseligible foratax concession
up to Rs.12,000 underSection80L of the IT Act. Beyondthat,itis taxable underthe Income Tax Actas
normal income.Asseenearlier,companyfixeddepositsyieldhigherreturnsthanbankdeposits,but
theyoffernotax concession.Incomesfrommutual funds,depositswithnotifiedfinancial institutions,
interestoncertainPostOffice Deposits,interestoncertainonNSC,interestonnotifiedbondsand
debentures,are alsoeligibleforatax deductionundersection80L,all withinanoverall ceilingof Rs.
15,000. The interestfromPFand PPFisfullyexemptformtax.ContributionuptoRs.60,000 per year
enjoysatax rebate equal to20% witha ceilingof Rs.12,000. Inthe PPF,wheneverthere isa
contributionmade tothe minorchildren'saccount,notonlyisthe interesttax free butalsoitis not
clubbedwiththe parent'sincome.THEINFLATION FACTORAsmentionedinanearlierarticle,real return
isreturn thatis posttax and postinflation.The value of the investmentdependsonthe amountthatthe
moneycan buy,andthis goesdownas the inflationgoesup.Therefore whileevaluatingthe returnfrom
a scheme;youneedtosee whetheritisgivingyoureturnsbeyondthe inflationrate.The greatest
problemswiththe investmentavenuessuchasgold,silver,diamondandJewelleryhave beenthatthey
have not servedasan effectivehedgeagainstinflation.IRJCAsiaPacificJournal of Marketing&
ManagementReviewVol.1No.2,October2012, ISSN 2319-2836 www.indianresearchjournals.com145
HIGH RISKBUT HIGH RETURNS Andfinally, equitysharesof listedcompaniesasanavenue of investment
can be extremelyrewarding.Buttheyare alsoriskyandcall for a special mental makeupandunusually
sharp skillsonthe partof the investor.AsPeterLynch,the acclaimedAmericanfundmanagersaid,
"commonstocksare not foreveryone,norforall timesinthe life of the same person".We examineeach
of these productslaterina detailedmannerBECAUTIOUS It has beennoticedworldoverthatan
investor'sgreatestandmostportentenemyisGREED FORHIGHER RETURNS. Many a times,rational
thinkingpeople tendtobehave inthe mostirrational mannerwhile investingtheirsavings.A well known
investmentguruhasanalyzedthisuncannybehaviorinone sentence - "Investor,protectthyself from
thyself".Whileanalyzing,the popularsavingsoptions,one shouldconsidertwokeyfactors:Taxation
and Inflationalongwithriskandreturn.Thus,asoundinvestmentisone whichgivesthe investor
reasonable returnafterdeductingoutgoof tax as well as the invisibletax of inflation.Toconclude,here
isa quote froma recentsurveycarriedoutin the US among finance professionalsrevealingsome
commoncharacteristicsof successful womeninvestors:"Askquestions;Seekhelp;Doyourhomework;
and Setgoals".Thisholdstrue for all investors.―Noone savesusbutourselves.Noone canandno one
may.We ourselvesmustwalkthe path.‖~Buddha BIBLIOGRAPHYREFERENCE BOOKS1. Francis,J C;

8. Taylor,R W (2004) – Schaum‘sOutline of TheoryandProblemsof InvestmentsNew Delhi:Tata McGraw
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Chandra,Prasanna(2004)– ManagingInvestmentsNewDelhi:TataMcGraw Hill.4. Avadhani,V A
(1995)- InvestmentforBeginnersBombay:HimalayaPublishingHouse.5.Avadhani,V A (1996)-
InvestmentManagementBombay:HimalayaPublishingHouse.IRJCAsiaPacificJournal of Marketing&
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6. Chandra, Prasanna(1995)– The InvestmentGame :How to Win.New Delhi :Tata McGraw Hill.7.Tier,
Mark (2006)– The WinningInvestmentHabitsof WarrenBuffetandGeorge SarosNew Delhi :Kogan
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