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Influence of the financial literacy on the investor profile of the individual investors
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The research paper tries to study the the choice of the investment avenues made by the individual investors according to the demographic variables like gender, age, income and marital status.

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  1. International Journal of Management (IJM)
    Volume 7, Issue 5, July–Aug 2016, pp.141–153, Article ID: IJM_07_05_013
    Available online at
    http://www.iaeme.com/ijm/issues.asp?JType=IJM&VType=7&IType=5
    Journal Impact Factor (2016): 8.1920 (Calculated by GISI) www.jifactor.com
    ISSN Print: 0976-6502 and ISSN Online: 0976-6510
    © IAEME Publication

    INFLUENCE OF THE FINANCIAL
    LITERACY ON THE INVESTOR PROFILE
    OF THE INDIVIDUAL INVESTORS
    Dr. Sonali N. Parchure
    Associate Professor
    Smt Hiraben Nanavati Institute of Management and Research for Women
    Pune, Maharashtra 411052-India

    ABSTRACT
    Individual investors invest in varied investment avenues only with the
    intention of savings. They lack the awareness of wealth maximization. For
    maximizing their wealth it is necessary to invest in those investment avenues
    which would give greater returns in the longer period of time. However,
    individual investors are observed to invest in investment avenues that enable
    them to save their funds. Individuals do not have enough awareness or literacy
    of the varied investment avenues that would enable them to maximize their
    wealth. Hence, it is necessary to identify the choice of investment avenues
    made by individual investors. The research paper tries to study the the choice
    of the investment avenues made by the individual investors according to the
    demographic variables like gender, age, income and marital status. The
    research paper also tries to map the investor profile according to the choice of
    the investment avenues and study if the financial literacy / awareness of the
    individual investor influences their choice of investment avenues.
    Key words: Investment Avenues, Investor Profile, Financial Literacy
    Cite this Article: Dr. Sonali N. Parchure, Influence of the Financial Literacy
    on the Investor Profile of the Individual Investors. International Journal of
    Management, 7(5), 2016, pp. 141–153.
    http://www.iaeme.com/IJM/issues.asp?JType=IJM&VType=7&IType=5

    1. INTRODUCTION
    It is known that everyone works for money. It is equally important to ensure that
    money works for us. In order to improve one’s future welfare the respective
    individual invests. Funds to be invested come from assets already owned, borrowed
    money, and savings or foregone consumption. By foregoing consumption today and
    investing the savings, the investor expects to enhance their future consumption
    possibilities. Anticipated future consumption may be by other family members, such
    as education funds for children or for themselves, possibly in retirement when the

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  2. Dr. Sonali N. Parchure

    individual is less able to work and produce for their daily needs. Regardless of why to
    invest one should seek to manage their wealth effectively, obtaining the most from it.
    This includes protecting the assets from inflation, taxes and other factors.
    As an investor, one may have a wide array of investment avenues available to
    them.

    Investment Avenues

    Fixed Income
    Equity Shares Securities

    Mutual Fund Schemes Deposits

    Tax Sheltered Life Insurance
    Schemes

    Real Estate Precious Objects

    Financial Derivatives

    Figure 1 Investment Avenues
    The investor needs to choose the best alternative from the available investment
    options keep in view the risk and return features. Behavioral finance gives a clear
    understanding of how investor psychology impacts investment outcomes. It helps in
    the structuring of the portfolio by identifying the financial goals on understanding the
    psychology and emotions behind the decisions for creating the goals.
    It is commonly observed that people have little difficulty in making hundreds of
    decisions. This is because the best course of action is often obvious and many
    decisions do not determine outcomes significant enough to merit a great deal of
    attention. Behavioural Finance remains underutilized in the wealth management of the
    individual investors, as it has not been framed appropriately in the user-friendly
    manner. Though a lot of literature is available on the behavioural biases, practitioners
    like the financial advisors find it difficult to detect the biases and then, advise their
    clients to deal with the biases. Even if the behavioural biases of the individual
    investors are identified, financial advisors lack pragmatic guidelines for tailoring the
    asset allocation process to reflect the specific bias.

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  3. Influence of the Financial Literacy on the Investor Profile of the Individual Investors

    2. LITERATURE REVIEW
    Mittal, Dhade (2007) studied and investigated the relationship between risk and
    gender over a wide range of activities and came up with the following generalizations;
    • Women tend to take less risk, in general, than do men
    • Experience and level of expertise do reduce, but usually do not eliminate risk-taking
    differences by gender.
    They support this by putting down that women are more cautious, less confident,
    less aggressive and easy to persuade, and have inferior leadership and problem
    solving abilities when making decision under risk. Women are more risk-averse than
    men in investment risk-taking. This can be seen not only in investment choices they
    make but also in terms of proportion of the funds they hold in risky securities. Women
    are less likely than men to invest in riskier but high-returning assets. Women tended
    to prefer lower risk assets than men.
    Mittal, Dhade (2007) advanced two classes of theories to explain women’s greater
    perception of risk. One class of theory focuses on biological and evolutionary factors
    while other focuses on social and cultural influences. Women appear to be especially
    gifted at identifying ambiguities and changes in physical and social situations. The
    biologically –based evolutionary theories suggest that women’s greater conservatism
    is adaptionist wherein, it increases the chances of survival for the human species.
    Specifically, women’s unique role as child bearers and mothers, and greater physical
    vulnerability to violence has led to physiological adaptations making women less
    sensation-seeking and more averse to ambiguous situations.
    Many researchers have found that the risk preferences depend on the framing of
    situation. Framing is a cognitive heuristic in which people tend to reach conclusions
    based on the framework within which a situation is presented. Even the same problem
    framed in different and objectively equal ways can cause people to make different
    choices. People show different preferences to risk depending on whether the situation
    is presented in terms of loss or gain. In situations where the probability of loss is quite
    large, people exhibit risk-seeking rather than risk-averse behaviour.
    Females and males differ in their choice of investment vehicle. Females prefer
    bank/post office deposits the most and equity shares the least, while males prefer
    equity shares the most and bank/post office deposits the least. While females prefer
    low return but safe and investments as the bank deposits, male have a liking to go for
    the high return-high risk investments like the equity shares. Females prefer risk-free
    investments, while males prefer risky investments. The gender differences exist in the
    preference for risk in the domain of gains, and males exhibit more preference for risk.
    Martenson (2008), also adds that women all over the world are consequently in a
    very vulnerable position at retirement. If these differences persist, women may end up
    accumulating less wealth for retirement regardless of how they invest their defined
    contribution. Gender differences are observed also regarding motivation, confidence
    and knowledge of financial issues, and the use of financial advice. Research indicates
    that women have less confidence in their investment decisions inspite of equal ability
    to perform. Martenson et al (2008). The researcher observes that many women
    consider the purchase of financial services as a masculine activity. Mens’ identities,
    self-esteem, and sense of power were all inextricably linked with money, while
    women sought immediate gratification through spending and were more security-
    oriented in money handling. Women were also more interested in their current debt
    than with their long-term financial goals. The primary financial goal for the year was

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  4. Dr. Sonali N. Parchure

    to pay off debts. They were very much less interested in savings, investments, and to
    prepare for retirement. Women do not have a typical female outlook on financial
    services, they often encounter discrimination.
    Women tend to be more risk averse than men in a number of different areas
    according to a large number of studies, Martenson et al (2008). Women place more
    emphasis on the downside measure of risk and ambiguity than men, and give lesser
    weight to variability of the return. Women professional investors are found to be more
    security prone decision makers, and exhibit a greater tendency to select a return target
    and then work to reduce risk. Men, on the other hand, focus more on increasing
    return. Females do not generally make less risky financial choices than males.
    The comparative male propensity of males and females in financial choices
    strongly depend on the decision frame. When identical decisions are presented as
    investment choices, no gender differences in risk attitudes are found, Manterson et al
    (2008). It is not gender alone that determine investment choices, but rather a
    combination of gender and marital status. Single women and married men are less
    likely than single men to choose ‘mostly stocks’ and neither education nor age affect
    allocation decisions. Knowledgeable and motivated women think, feel, and act as
    knowledgeable and motivated men. There are however, many more knowledgeable
    and motivated men than women argue Manterson et al (2008).

    3. RATIONALE OF THE STUDY
    Finance has become an inevitable part of individuals’ life today. Investors have to set
    their financial goals and allocate their finances accordingly. With growing options of
    investments, in other words, with varied investment avenues like equity
    shares/derivatives, mutual funds, insurance, post office deposits, bank fixed deposits,
    gold, commodities, real estate, bonds/debentures, National Saving Certificates (NSC)
    and Public Provident Fund (PPF), there is a need to study the choice of the investment
    avenues of the individual investors. Behavioral Finance helps classify investors on
    the basis of their relative risk taking capacity and the type of investment they make.
    This research paper would help to classify the investors into different personality
    types and the relationship between the various demographic factors and the
    investment personality exhibited by them would also be explored. The relationship
    between the investment personality and demographic variables on the risk tolerance
    and the choice of the investment avenues would also be investigated.
    Thus, the rationale behind the research was to study if the holdings in the portfolio
    vary with the demographic variables like gender, age, marital status and income. The
    research also tried to find if risk aversion decreases and then increases with age. It
    further studies if financial literacy influences the choice of the investment avenues.

    3. OBJECTIVES
    1. To study the choice of investment avenues on the basis of gender, age, income groups
    and marital status.
    2. To identify the different profile of the investors according to the choice of the
    investment avenues.

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  5. Influence of the Financial Literacy on the Investor Profile of the Individual Investors

    HYPOTHESES
    1. Financial awareness of investors influences the choice investment avenues.
    2. Women investors tend to take less risk than men.

    4. RESEARCH METHODOLOGY
    The research paper is a Descriptive and an Analytical research. It not only states the
    choice of the investment avenues according to the demographic variables of the
    respondents like gender, age, income and marital status, but, also analytically
    identifies the profile of the respondents according to their choice of the investment
    avenues. To identify the personality of te respondents according to the choice of the
    investment avenues, the investment avenues were categorised into Aggressive,
    Moderate and Conservative type depending on the risk – return features of the
    investment avenues.
    A sample of 512 respondents were considered for the study. The sample selected
    was according to the Convenient Sampling Method. For the analytical study Pearson’s
    Chi-square and Kruskal – Wallis tests of significance were used.

    5. FINDINGS
    1. It is observed that the well tested long standing avenues like Bank FDs, Life
    Insurance Schemes, Gold/Silver, Mutual Funds, PPFs, etc. continue to enjoy the
    preference of both the male and the female investors. (Refer Table -1)

    Table 1 Gender-wise Investment Avenues
    Ranks / Gender Males Females
    1 Bank FDs Bank FDs
    2 Life Insurance Schemes Life Insurance Schemes
    3 Mutual Funds Gold / Silver
    4 Gold / Silver Mutual Funds
    5 PPF PPF
    6 Real Estates Post Office Savings
    7 Equities Real Estates
    8 Post Office Savings Unit Link Policies
    9 Unit Link Policies NSCs
    10 NSCs Equities
    11 Bonds Bonds
    12 Other Com. Other Com.
    2. It is found that irrespective of age all the respondents prefer Bank FDs as their first
    choice / priority of investment avenues. PPF and LIC policies also enjoy preference
    of investors. As age increases, the respondents start looking out for security and have
    PPF at rank 3. NSCs and Mutual Funds are less preferred avenues for all age groups.
    Commodities are preferred as their last choice of the investment avenue. Investors
    less than 30 years of age prefer Bonds as it would surely give them good returns at
    their retirement age. Equities are not preferred by them mainly because of two
    reasons – lack of knowledge and fear of losing money. Equities are better preferred
    by the respondents in their mature age group i.e. 30 – 45 years and 45 – 60 years of
    age. This may be because of a better awareness of the avenues or guidance from the
    financial advisors. It may be thus concluded the choice of the investment avenues
    does not differ majorly with the changing age group. (Refer Table – 2)

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  6. Dr. Sonali N. Parchure

    Table 2 Age – wise Investment Avenues
    Ranks/Age 60yrs
    1 Bank FDs Bank FDs Bank FDs Bank FDs
    Life Insurance Life Insurance Life Insurance Unit Link
    2
    Schemes Schemes Schemes Policies
    3 Bonds PPF PPF PPF
    Life Insurance
    4 Real Estate Real Estate Real Estate
    Schemes
    5 NSCs Equities Equities PO Savings
    6 PPF PO Savings Bonds Gold / Silver
    Unit Link
    7 PO Savings Bonds Equities
    Policies
    8 Gold / Silver Gold / Silver Gold / Silver Real Estate
    Unit Link
    9 Mutual Funds PO Savings NSCs
    Policies
    Unit Link
    10 Mutual Funds NSCs Bonds
    Policies
    11 Equities NSCs Mutual Funds Mutual Funds
    Other Other Other Other
    12
    Commodities Commodities Commodities Commodities

    3. The marital status does not influence the choice of the investment avenues (Refer
    Table – 3). The respondents irrespective of their marital status prefer Bank FDs as
    their first choice of investment avenues. The married and the separated respondents
    have the same choice of the investment avenues. However, the respondents who are
    single prefer Equities and Real Estates after Bank FDs, the Life Insurance Schemes
    come later in the list, and the other choices are the same. This is because the investors
    being single are in a position to take risk with their investments. But, as they get
    married their choice of investment avenues changes reducing the risk factor. NSCs
    and Mutual Funds are least preferred by all the groups. The choosing of the
    investment avenues by the investors irrespective of the marital status does indicate
    that they need more financial knowledge for choice of investment avenues.

    Table 3 Marital Status – wise Investment Avenues:
    Ranks / Marital
    Single Married Separated
    Status
    1 Bank FDs Bank FDs Bank FDs
    Life Insurance Life Insurance
    Equities
    2 Schemes Schemes
    3 Real Estate PPF PPF
    4 PPF Real Estate Real Estate
    5 Life Insurance Schemes Equities NSCs
    6 PO Savings Bonds Bonds
    7 Bonds PO Savings Mutual Funds
    8 Gold / Silver Gold / Silver Gold / Silver
    9 Unit Link Policies Unit Link Policies Unit Link Policies
    10 Mutual Funds Mutual Funds PO Savings
    11 NSCs NSCs Equities
    12 Other Commodities Other Commodities Other Commodities

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  7. Influence of the Financial Literacy on the Investor Profile of the Individual Investors

    4. The first choice of the investment avenue is the same irrespective of the income level.
    The choice of the investment avenues differs in respect of investors having income
    above ₹8,00,000 p.a. They prefer to invest in equities next to Bank FDs. In respect of
    all other income groups, Bank FDs and Life Insurance schemes are preferred avenues
    while, Mutual Funds and NSCs are least preferred. (Refer Table – 4)

    Table 4 Income – wise Investment Avenue:
    Ranks / ₹1,90,001 – ₹3,00,001- ₹5,00,001-
    Income ₹8,00,000
    1 Bank FDs Bank FDs Bank FDs Bank FDs Bank FDs
    Life Life Life Life
    2 Insurance Insurance Insurance Insurance Equities
    Schemes Schemes Schemes Schemes
    3 Real Estate PPF PPF Real Estate PO Savings
    Mutual
    4 PO Savings Real Estate PPF PPF
    Funds
    Unit Link Life Insurance
    5 NSCs Equities Equities
    Policies Schemes
    Unit Link
    6 PPF Real Estate PO Savings PO Savings
    Policies
    Unit Link
    7 NSCs Bonds Bonds Real Estate
    Policies
    8 Gold / Silver Gold / Silver Gold / Silver Gold / Silver Gold / Silver
    Unit Link Unit Link
    9 PO Savings Bonds NSCs
    Policies Policies
    Mutual Mutual Mutual
    10 Bonds Bonds
    Funds Funds Funds
    11 Equities Equities NSCs NSCs Mutual Funds
    Other Other Other Other Other
    12
    Commodities Commodities Commodities Commodities Commodities

    5. All the investment avenues were categorised into Conservative, Moderate and
    Aggressive Investment Avenues according to their risk and return features. It is
    observed from table – 5, that 69% of the respondents belong to the conservative
    investor profile, 20% are aggressive investors and 12% belong to the moderate type
    of profile of investors according to the choice of investment avenues that they make.
    Table 5 Type of profile of the investors according to investment avenues
    Investor Profile Frequency Percent
    Conservative 353 69
    Moderate 59 12
    Aggressive 100 20
    Total 512 100

    6. Table – 6 gives a detailed classification of the profile of the investors according to the
    investment avenues. Also, the statistical table shows that the demographic variables
    gender, income and occupation have a significant association with the investor profile
    as their significance value is less than 0.05.

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  8. Dr. Sonali N. Parchure

    Table 6 Statistical Table showing association of Demographic Variables with the Investor
    Profile:
    Chi-Square Tests Values
    Particulars Value df Asymp. Sig. (2-sided) Association
    Gender and Types of Investor
    23.117 3 .000 Yes
    Profile
    Age and Types of Investor
    12.213 9 .202 No
    Profile
    Marital Status and Types of
    3.953 6 .683 No
    Investor Profile
    Income and Types of Investor
    42.942 12 .000 Yes
    Profile

    HYPOTHESES TESTING
    1. To test – Financial Awareness of investors influences the choice of investment
    avenues:
    H0 – Financial Awareness of investors does not influence the choice of investment
    avenues
    H1 – Financial Awareness of investors influences the choice of investment
    avenues

    Table 7 Financial Awareness of the Investors according to Investment Avenues

    Investment High Awareness Low Awareness
    Ranks Total
    Avenues Frequency % Frequency %
    1 Bank FDs 478 94 34 7 512
    Life Insurance
    318 62 194 38 512
    2 Schemes
    3 Mutual Funds 288 57 224 43 512
    4 Gold / Silver 391 77 121 24 512
    5 PPF 394 78 118 22 512
    6 Real Estate 267 52 245 48 512
    7 PO Savings 384 75 128 25 512
    Unit Link
    231 45 280 55 511
    8 Policies
    9 NSCs 312 61 200 39 512
    10 Equities 240 47 272 52 512
    11 Bonds 199 39 313 62 512
    Other
    124 24 388 76 512
    12 Commodities
    The choice of the investment avenues were found according to their priority and
    the financial awareness for the same was observed. The financial awareness was
    categorised into High Financial Awareness that covered “Know very well” and
    “Know well” options and Low Financial Awareness that covered “Know some what”
    and “Do not know” options.
    It is observed that a higher percentage of the respondents with High Financial
    Awareness ranks their choice of investment avenues like Bank FDs, Life Insurance

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  9. Influence of the Financial Literacy on the Investor Profile of the Individual Investors

    Schemes, Gold / Silver, PPF in the high priority, except Mutual Funds which is
    ranked 3rd in the choice of the investment avenues with only 57% of the respondents
    with high financial awareness. So, is the case with the higher percentage of
    respondents with Low Financial Awareness ranking the investment avenues like Unit
    Linked Policies, Equities, Bonds, Other Commodities in the lower priority list, except
    in the case of Post Office Savings and NSCs. Mutual Funds appears to be on rank 3,
    while Post Office Savings and NSCs on rank 7 and 9 respectively, inspite of higher
    percentage of financial awareness due to the higher returns on the investment made in
    the respective investment avenues. This again proves that financial awareness of the
    investors influences the choice of the investment avenues.
    This can be supported with the Spearman’s Correlations significance value.
    Spearman’s correlation was used as both – the priority of investment avenues and the
    financial awareness of the investment avenues were measured on the Ordinal Scale.
    In the statistical table – 8 above a significant association between the financial
    awareness and the choice of the investment avenues is observed in almost all the
    investment avenues except in the case of Bank FDs, Life Insurance Schemes and
    Other Commodities, as the significance value of Spearman’s correlation is greater
    than the p value 0.05. But, as the significance value supports the alternative
    hypothesis (H1) in 75% (9/12) of the investment avenues, the null hypothesis (H0) is
    rejected.

    Table 8 Statistical Table of Significance Values to test the Hypothesis
    Spearman’s Hypothesis
    Sr. Investment
    Correlation Sig. Supported Yes /
    No. Avenues
    Value No
    1 Bank FDs 0.57 No
    Life Insurance
    2 0.204 No
    Schemes
    3 Mutual Funds 0.000 Yes
    4 Gold / Silver 0.000 Yes
    5 PPF 0.000 Yes
    6 Real Estate 0.000 Yes
    7 PO Savings 0.000 Yes
    8 Unit Link Policies 0.000 Yes
    9 NSCs 0.000 Yes
    10 Equities 0.000 Yes
    11 Bonds 0.020 Yes
    Other
    12 0.278 No
    Commodities

    Conclusion: Financial Awareness of the investors influences the choice of
    investment avenues.
    2. To test – Women investors tend to take less risk than men:
    H0 – Women investors do not tend to take less risk than men
    H1 – Women investors tend to take less risk than men
    In-order to test the validity of the Null Hypothesis (H0), the association of the
    gender of the respondents with the type of personality of the investor according to the
    investment avenues, the priority of the investment avenues according to gender and
    the actual investor profiling of the investors according to gender are considered.

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  10. Dr. Sonali N. Parchure

    From the tables – 9 and 10, it is observed that 77% of the females belong to the
    conservative personality type according to the choice of their investment avenues as
    compared to 61% of the males belonging to the same category. Also, the significance
    value of Chi-square and Kruskal – Wallis both indicate a significant association
    between gender and the type of personality according to the investment avenues. With
    a higher percentage of female conservative investors than males, it can be interpreted
    that women investors tend to take less risk than men.

    Table 9 Gender * Personality Types
    Type of personality of the investor according to
    Gender of the
    investment avenues Total
    respondent
    Conservative Moderate Aggressive
    Males 158 29 71 258
    Percent (%) 61 11 28 100
    Female 195 30 29 254
    Percent (%) 77 12 11 100
    Total 353 59 100 512

    Table 10 Statistical Table of Gender * Personality Types
    Particulars Value df Asymp. Sig. (2-sided)
    Pearson Chi-Square 21.505 2 .000
    Kruskal – Wallis .026 .000
    But, the table- 11 gives the details of the priority of the investment avenues
    according to the gender, shows that there is no major difference in the choice of the
    investment avenues between the male and the female investors.

    Table 11 Gender-wise Investment Avenues:
    Ranks / Gender Males Females
    1 Bank FDs Bank FDs
    2 Life Insurance Schemes Life Insurance Schemes
    3 Mutual Funds Gold / Silver
    4 Gold / Silver Mutual Funds
    5 PPF PPF
    6 Real Estates Post Office Savings
    7 Equities Real Estates
    8 Post Office Savings Unit Link Policies
    9 Unit Link Policies NSCs
    10 NSCs Equities
    11 Bonds Bonds
    12 Other Com. Other Com.
    The priority of the choice of the investment avenues by the females is observed to
    be quite similar to that of the males, as females seem to be equally financially
    independent and financially aware. This is supported by table – 12 that gives the
    financial awareness of the investors according to gender.

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  11. Influence of the Financial Literacy on the Investor Profile of the Individual Investors

    Table 12 Financial Awareness Gender – wise
    Males Females
    Investment High
    Ranks Low Awareness High Awareness Low Awareness
    Avenues Awareness
    Frequency % Frequency % Frequency % Frequency %
    1 Bank FDs 243 47 15 3 236 46 18 4
    Life Insurance
    2 156 30 102 20 167 33 87 17
    Schemes
    3 Mutual Funds 166 32 92 18 128 25 126 25
    4 Gold / Silver 194 38 64 13 199 39 55 11
    5 PPF 202 39 56 11 198 39 56 11
    6 Real Estate 145 28 113 22 128 25 126 25
    7 PO Savings 192 38 66 13 195 38 59 12
    Unit Link
    8 129 25 129 25 111 22 143 28
    Policies
    9 NSCs 149 29 109 21 169 33 85 17
    10 Equities 136 27 122 24 111 22 143 28
    11 Bonds 111 22 147 29 96 19 158 31
    Other
    12 59 12 199 39 75 15 179 35
    Commodities
    It is thus observed that the female investors have equally high financial awareness
    as compared to the male investors. Thus, the above analysis indicates that women
    investors do not tend to take less risk than males, accepting the Null Hypothesis (H0).
    This can be supported by the association of gender and the type of investor
    profiling. The psychographic profiling of the respondents was done on the basis of a
    set of 25 questions that helped to profile the respondents into three basic investor
    profiling types – Conservative, Moderate and Aggressive. The association of the same
    with gender was analysed.

    Table 13 Gender and Type of Investor Profile

    Gender of the Type of investor
    Total
    respondent Conservative Moderate Aggressive
    Males 21 146 91 258
    Percent (%) 8 57 35 100
    Female 29 147 78 254
    Percent (%) 11 58 31 100
    Total 50 293 169 512
    From table – 13, it is observed that 57% of the males and 58% of the females
    belong to the Moderate type of investor profile which indicates their actual behaviour
    of risk taking. This indicates that women investors do not tend to take less risk than
    males to accept the Null Hypothesis (H0).

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  12. Dr. Sonali N. Parchure

    Table 14 Statistical table of Gender * Investor Profile
    Particulars Value df Asymp. Sig. (2-sided)
    Pearson Chi-Square 2.252 2 .324
    Kruskal – Wallis .001 .465

    Conclusion: Women investors do not tend to take less risk than men

    6. CONCLUSION
    It can thus be concluded that generally the choice of the investment avenues does not
    differ with gender, age, educational qualifications, occupation, marital status and
    income. All the investors prefer conservative investment avenues like Bank FDs, LIC
    schemes, PPF, NSCs, where there is less risk. The little change in the choice of the
    avenues was seen only with the investors who were self – employed or single or those
    earning an income greater than ₹8,00,000 p.a. This shows that investors who are self –
    employed or single or earning greater than ₹8,00,000 p.a. tend to take a little more
    risk as compared to the other investors. These investors are more inclined towards
    wealth maximization as compared to the other investors.
    The investors do not have thorough knowledge of the various investment avenues
    like Bonds, Mutual Funds, and Commodities etc. and hence keep investing in
    conservative investment avenues only. Guidance from elders to invest in conservative
    investment avenues also becomes a hurdle in financial planning. It develops a
    conservative attitude amongst the investors of taking less risk rather than exploring
    other investment avenues that lead to maximization of their wealth and thus help them
    in their needs or contingencies.
    It can thus be concluded that investors majorly belong to the conservative investor
    profile on the basis of the choice of the investment avenues they make. As seen earlier
    the choice of the investment avenues does not differ much but, to a little extent gender
    wise and income wise. This is also seen statistically that gender, occupation and
    income have an association or influence on the investor profile which is the result of
    the choice of their investment avenues. Financial illiteracy about the investment
    avenues like Mutual Funds, Bonds and Commodities, lack of time to monitor them,
    guidance from elders to invest in conservative investment avenues, security of the
    invested amount rather than returns are some of the reasons that force the investors to
    choose conservative investment avenues, which thereby reflects their investor profile.

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