RESEARCH METHODOLOGY

RESEARCH REPORT ON PORTFOLIO MANAGEMENT

AUTHORS HARSH THAKKER 111 POOJA TRIPATHI 113

EXECUTIVE SUMMARY

The evaluation of financial planning has been increased through decades, which can be best seen in customers. Now a days investments have become very important part of income saving. In order to keep the Investor safe from market fluctuation and make them profitable, Portfolio Management Services (PMS) is fast gaining Investment Option for the High Networth Individual (HNI). There is growing competition between brokerage firms in post reform India. For investor it is always difficult to decide which brokerage firm to choose. The research design is analytical in nature. A questionnaire was prepared and distributed to Investors. The investors profile is based on the results of a questionnaire that the Investors completed. The Sample consists of 30 investors from various brokers premises. At the time of investing money everyone look for the Risk factor involve in the Investment option. The Report is prepared on the basis of Research work done through the different Research Methodology the data is collected from both the source Primary sources which consist of Questionnaire and secondary data is collected from different sources such as newspaper articles, business magazines and web. Every Individual has their own specific financial need and expectation based on their risk taking capabilities, whereas some needs and expectation are universal

ACKNOWLEDGEMENT
There is a great meaning in life for those who are willing to contribute- Jim England
Every research requires contribution and participation of wide arrays of sources and resources. In the research, the authors have been lucky to be guided by Professor. Gomathy Thyagarajan my Supervisor who has played an important role in helping us to develop a lucid. The authors would like to appreciate the efforts of the Supervisor for guiding throughout the whole process of research. Her contribution has been of great acknowledgement that laid the foundation of the research. The writers would also like to thank his family and friends for supporting the authors throughout this interesting journey. The University offered the authors all the desired freedom to conduct research in a positive and enthusiastic manner that makes me appreciate their guidance and code of conduct. The writers would like to appreciate and acknowledge that guidance of everyone who has been an integral part of this research process. The journey began as an individual but with the support, cooperation and coordination of a number of people, it became a beautiful journey embedded with beautiful memories of all the people who contributed in the success of the research in a direct and indirect manner.

TABLE OF CONTENTS
Executive Summary.......1 Acknowledgements...2 CHAPTER 1: INTRODUCTION......5 CHAPTER 2: SCOPE AND OBJECTIVES.....6 2.1 Scope of the Study......................................................... ..............................6 2.2 Objective of the Study... ..6 2.3 Problem Definition .6

CHAPTER 3: REVIEW OF LITERATURE ....7

CHAPTER 4: RESEARCH METHODOLOGY.9 4.1Process of Portfolio Management .......9 4.2 Research Design .9 4.3 Sampling Design.........9 4.4 Method of Data Collection........10 4.5 Period of the Study....10 4.6 Limitation of the Study..10

CHAPTER 5: PORTFOLIO MANAGEMENT.....11 5.1 Meaning of Portfolio Management ...11 5.2 What is Portfolio Management..........11 5.3 Objectives of Portfolio Management 11 5.4 Need for Portfolio Management 11

CHAPTER 6: DATA ANALYSIS AND INTEPRETATION12 6.1 Data Analysis Procedure ...12 6.2 Data Intepretation. ..12 CHAPTER 7: RESULTS AND FINDINGS....15 7.1 Results.......15 7.2 Findings.15 CHAPTER 8: CONCLUSION AND SUGGESTIONS......16 8.1 Conclusion 16 8.2 Suggestions16

BIBLIOGRAPHY .17 Books ..17 Journals ...............17 Web .17 Appendix A: Questionnaire 18

CHAPTER 1: INTRODUCTION

Research always begins with a purpose. For a study to qualify research, it must be planned and systematic. Thus, the researcher needs to formalize thus plan of pursuing the study. This framework or plan is termed as the Research Proposal. A research proposal is a formal document that presents the research objectives, design of achieving these objectives and the expected outcomes/deliverables of the study. Hence, this study gives a brief idea about the investors idea and the risk involved during the time of investment. Investors choose to hold groups of securities rather than single security that offer the greater expected returns. They believe that a combination of securities held together will give a beneficial result if they are grouped in a manner to secure higher return after taking in to consideration the risk element. That is why professional investment advice through portfolio management service can help the investors to make an intelligent and informed choice between alternative investments opportunities without the worry of post trading hassles. The objectives of portfolio management are applicable to all financial portfolios. These objectives, if considered, results in a proper analytical approach towards the growth of the portfolio. Furthermore, overall risk needs to be maintained at the acceptable level by developing a balanced and efficient portfolio. Finally, a good portfolio of growth stocks often satisfies all objectives of portfolio management

CHAPTER 2: SCOPE & OBJECTIVES

2.1 Scope of the study
To understand the investor behavior with regards to the investment patterns To measure and understand the level of risk associated with an investment To understand the concept and importance of portfolio management in todays scenario. To compare the return on a portfolio using different investment ways

2.2 Objectives of the study

To find out optimal portfolio, which will give optimal returns at a minimum risk to the investor To study whether the portfolio risk is less than individual risk on whose basis the portfolio are constituted. To gather useful information from different kinds of investors. To understand the perception of an investor with regards to a particular investment

2.3 Problem Definition

To understand the reasons underlining the decision of an investor to do portfolio management in order to reduce the level of risk associated with the investment. Understanding the investment pattern and the perception of an investor before investing in a particular security

CHAPTER 3: REVIEW OF LITERATURE

CHAPTER 4: RESEARCH DESIGN AND METHODOLOGY

4.1 Process of Portfolio Management
Portfolio management is a complex activity which may be broken down into the following steps: Specification of invest objectives & constraints Choice of the asset mix Formulation of portfolio Strategy Selection of Securities Portfolio Execution Portfolio Revision Performance Evaluation

4.2

Research Design

The study is about understanding the investment pattern and the preferences/perception of investors The research method selected for the study is exploratory research and descriptive research. Under exploratory research the method used is secondary resource analysis

4.3

Sampling Design

The sample that has been selected for our study is a random sample of 30 respondents the reason for selecting this sample is because it was convenient The sample selected is a true representation of the total population The sample of respondents is from the western region of Mumbai.

4.4

Method of Data Collection

The data for the study will be collected both from primary sources and secondary sources. The Primary data will be collected by means of survey that would be conducted on the sample population from the western region of Mumbai The Secondary data will be collected from Magazines and periodical journals Newspapers Websites

4.5

Period of Study

The study was carried out for a period of one month starting from 10th February to 10th of March 2013.

4.6 Limitation of The Study

The limitation of the study is that it was carried out for a limited period of days and the sample size selected for the study was small which not a true representation of the total population.

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CHAPTER 5: PORTFOLIO MANAGEMENT

5.1 Meaning of Portfolio A portfolio is a collection of securities, since it is really desirable to invest the entire funds of individual or an institution or a single security It is essential that every security be viewed in a portfolio context. Thus it seems logical that the expected return of the portfolio. Portfolio Analysis considers future risk and return in holding various blends of individual securities

5.2 What is Portfolio Management?

Portfolio Management refers to the management of portfolios for others by professional investment managers it refers to the management of an individual investors portfolio by professionally qualified person ranging from merchant banker to specified portfolio company.

5.3 Objectives of Portfolio Management:

The main objective of investment portfolio management is to maximize the returns from the investments and to minimize the risk involved in investment. Moreover, risk in price or inflation erodes the value of money and hence investment must provide a protection against inflation.

5.4 Need for Portfolio Management:

Portfolio Management is a process encompassing many activities of investment in assets and securities. It is a dynamic and flexible concept and involves regular and systematic analysis, judgment and action. The objective of this service is to help the unknown and investors with the expertise of professionals in investment portfolio management. It involves construction of a portfolio based upon the investors objectives, constrains, preference for risk and returns and ta x liability. The portfolio is reviewed and adjusted from time to time in tune with the market conditions. The evaluation of portfolio is to be one in terms of targets set for risk and returns. The changes in the portfolio are to be effected to meet the changing condition.
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CHAPTER 6: DATA ANALYSIS & INTERPRETATION

6.1 Data Analysis Procedure:
This section will give an overview of the quantitative and qualitative analysis in an informative manner. There is no denying that both the analysis plays an important role in the success of the research and should be showcased in an analytical and informative manner. The data analysis procedure is based on the data garnered from the questionnaire and will be illustrated through qualitative and quantitative analysis. Qualitative Analysis- Qualitative analysis highlights the responses given by the respondents. The descriptive responses of the respondents are analyzed well to understand the mindset of the respondents. It need to understand that every individual has a different mindset and opinion about people, place and things and thus it becomes very necessary to analyze all these in an effective and efficient manner. This will make the whole research defined and informative. That is why qualitative analysis needs to be done effectively as its a very crucial in guiding the authors towards a meaningful and focused outcome of the research.

6.2 Data Interpretation

Q.1) Which field of investment interest you the most? Mutual funds Annuities Fixed deposit Real estate Shares Majority of the investors preferred investing in mutual funds as mutual funds had a low risk factor and good returns. Other investors preferred investing more amount of money in fixed deposit as it is secured and yields a risk free return.
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Q.2) What is the total amount that you are ready to invest? 10,000-50,000 50,000 1,00,000 1,00,000-2,00,000 2,00,000-4,00,00 4,00,000 and Above The investors were ready to invest a sum of Rs.4, 00,000/- and above in fixed deposit as it was a risk free return.20% of the investors who were risk averse preferred investing a low sum of money and the remaining who were risk takers invested 2, 00,000 to 4, 00,000.Hence it was observed that majority of the people preferred investing less amount (10,000 -50,000). Q.3) If the investment amount falls due to bad market condition, would you withdraw your investments or wait for recovery? YES NO 90% of the investors selected NO as an option and preferred waiting for the stock to rise rather than withdrawing their money and incurring a loss. Q.4) What would be the period of your investment? Long term (more than 4years ) Mid-term (2-4 years) Short term (1-2 years) The respondents choose midterm investments as the most preferred as it was ideal return period as compared to all investment categories prevailing in the market.

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Q.5) Tick the following that is applicable to you Maximise returns on investment with maximum risk Minimise risk and investment Balanced investments with risky and risk-free assets Others, please mention _________________________________ The above question was given an open ended option in order to understand the perception of the investor in a better way and hence it was observed that 100%of the respondents choose to have a portfolio of balanced investments with risky and risk free returns as it would give them a balanced favourable return on their investments even during bad times. Q.6) What is the risk factor that you are willing to take while investing Low Medium High

The above question was asked to know the risk taking ability of different investors and hence it was found that out of the 30 respondents 24 of them was risk averse and preferred a low risk investment. This shows that people like to invest more in fixed deposits and mutual fund investments as they are low risk bearing.

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CHAPTER 7: RESULT & FINDINGS

7.1 Results
The optimal portfolio has been prepared, which will give optimal returns at a minimum risk to the investor The study found out that the portfolio risk is less than individual risk on whose basis the portfolio is constituted. Majority of the people prefer investing taking less risk & thus their investment is also low. Investor preferred investments that would yield a return from a period of 2-4 years.

7.2 Findings
During the study, following are some of the observations that are found out When the market is doing well, investors prefer taking high risk and invest high amount of money. . 1.) Since the term returns from an investment refers to the benefits that an investor receives from that particulars investment, hence we can infer that portfolio is generating more returns when compared to individual 2.) If risk parameter is taken in consideration; portfolio has low risk to that of individual risk.

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CHAPTER 8: CONCLUSION AND SUGGESTIONS

8.1 Conclusion
The research has been presented by setting objective along with developing a systematic approach to achieve those objectives. The aims and objectives of the research have been covered through wide arrays of research tools. The research has been conducted in a professional manner. It can assume that the objectives have been achieved in a positive, honest and ethical manner. The overall objectives were well aligned with the achievement and thus helped in bringing the true and ideal picture of the research.

8.2 Suggestions
Following are some of the suggestions: In order to enjoy more returns, he should invest more; investor should invest in more risky securities as a risk taker Investors should invest in different securities rather than investing in only shares.the investors portfolio should include both risk free as well as risky returns. If the investor is a risk-averse investor, then he should invest in less risky securities and enjoy normal return. Investors should hold on to the security rather than selling it and making a loss when the share prices are down.

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BIBLIOGRAPHY

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APPENDIX QUESTIONNAIRE
Name:Age:Sex:Occupation:Q.1) Which field of investment interest you the most? Mutual funds Annuities Fixed deposit Real estate Shares Q.2) What is the total amount that you are ready to invest? 10,000-50,000 50,000 1,00,000 1,00,000-2,00,000 2,00,000-4,00,00 4,00,000 and Above Q.3) If the investment amount falls due to bad market condition, would you withdraw your investments or wait for recovery? YES NO Q.4) What would be the period of your investment? Long term (more than 4years ) Mid-term (2-4 years) Short term (1-2 years)
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Q.5) Tick the following that is applicable to you Maximise returns on investment with maximum risk Minimise risk and investment Balanced investments with risky and risk-free assets Others, please mention _________________________________

Q.6) What is the risk factor that you are willing to take while investing Low Medium High

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