consumer preference towards various financial instrument
Objective• To identify the knowledge of the investor in Raipur city about investment option.• To analyze the reason for choosing one particular financial instrument.• To signify the best preferred option amongst different financial instruments.• To study the investors objective towards choosing an option out of so many.• To analyze the investment pattern preferred by investors.
Terms used in my topic• Investment:- Investment is to commit money in order to earn a financial return.• Investor:- Investor is an individual who commits money to investment products with the expectation of financial return.• Needs of investors:-• Security of original capital• Wealth accumulation• Comfort factor• Tax efficiency• Life cover• Income• Simplicity• Ease of withdrawal
Terms used in my topic(contd.) • Preference:- one could interpret that the term “preference” to mean evaluative judgment in the sense of liking or disliking an object . Or • Preference is an act of preferring, or the state of being preferred.
Financial instruments • Various financial instruments available in market which one could invest in are: • Equity • Commodity • Mutual fund • ULIP’s • Fixed deposit • Bonds • Saving bank account • NSC/KVP
Research methodology• Sampling Technique Sampling method: convenient sampling Sample size:100• Data collection• Primary data collection primary data has been collected by interacting with 100 respondents and made questionnaire filled by them.• Secondary data collection The secondary data has been collected through various journals and websites.
AnalysisDo you invest in any type of financial instruments? INVESTORS OPINION FOR INVESTING IN FINANCIAL INSTRUMENTS 20% yes no 80%
Analysis(contd.)In which type of financial instruments do you invest? MOST PREFERRED FINANCIAL INSTRUMENT 3% Equity 7% 12% 1% Commodity Mutual fund 15% life insurance(ULIPs) 22% Recurring deposit Saving account Fixed deposit 28% 10% Bonds 2% NSC/KVP
Analysis(contd.) What parameters as mentioned below, you consider inmaking the investments, rank them as per your preference. PARAMETERS CONSIDERED BY INVESTORS FOR MAKING INVESTMENT 80 60 1 Rank 40 2 Rank 20 3 Rank 4 Rank 0 risk liquidity returns ease of covering operation
Analysis(contd.)What is the distribution of investment across different securities? DISTRIBUTION OF INVESTMENT OF INVESTORS ACROSS DIFFERENT SECURITIES other Equity and commodity 0-25% Mutual funds and fixed 26-50% deposits 50 % above Government securities and bonds 0% 20% 40% 60% 80% 100%
Analysis(contd.) Reasons for not investing in any of the investment options? REASON FOR NOT INVESTING 10% Lack of awareness 15% 45% Lack of time Fear factor Never thought of it 30%
Analysis(contd.) What are your investment objectives? INVESTMENT OBJECTIVE OF INVESTORS 16% Short term profit seeking 49% Growth and income Long term profit 35% seeking
Analysis(contd.) What pattern of investment do you prefer? INVESTMENT PATTERN PREFERRED BY INVESTORS Low risk and 24% return 35% Moderate risk and return High risk and 41% return
Analysis(contd.) What is the source of your investment? SOURCE OF INVESTMENT PREFERRED BY INVESTORS 80 70 60 50 40 30 20 No. of respondent 10 0 savings Inherited Money Personal Margin amount extracted borrowing financing from business
Findings• Majority of respondents i.e.80% investors invest in financial instruments while remaining 20% do not invest because of lack of time and lack of awareness.• Most of the investors invest 25% amount in all the financial instruments and from this it is clear that people are not aware about the best investment option so they invest equal amount in all the securities.• Investors objective for investment is earning long term profit.
Findings(contd.)• Majority of respondents prefer saving account as investment option for investing but as every individual has not chosen only saving account as their investment option so mutual fund can be preferred as the second most preferred option among all financial instruments.• Majority of the people prefer high risk and high return as a pattern of investment.• Most of the investor’s look for higher returns while investing.
Suggestions• Company should make people aware about the various investment option available in the market.• Every client should be given a personnel assistance to give him/her a regular & consistent service.• Karvy should conduct more surveys in order to interact with customer to know the preferences of the customer and also for improving its services.• Client’s satisfaction and value retention should be given focused to maintain goodwill of the company.• To prepare an effective marketing strategy a company must study its competitors as well as its actual and potential customer.
Further scope of study• The research has been conducted at Raipur city only. Thus this research has a scope of being conducted with reference to India also.• The research has been conducted by taking a particular income group that is middle upper and lower middle. It can be conducted to all the income groups.• The sampling which has been taken for the research work is convenient sampling it can be done by taking purposive random sampling.• Government can use such type of study to see the knowledge level of the investors and thus it can be of great use of generating future awareness by seeking different aspects for the investors.• This study can be used by investment firms also.