A Final Report On

Different investment avenues in different investment sectors."

Submitted to PUNJAB TECHINICAL UNIVERSITY JALANDHAR In partial fulfilment of the requirement for the award of degree of Master of Business Administration (MBA)

Submitted By Guneet Dhingra Deepika Shinh Upsana Malik 3232 3270 3263

Submitted To Ms.Nitika Sehgal Assistant Professor

INTRODUCTION

INVESTMENT

A person spends his income on goods and services that he currently needs. He saves the excess of income over his current needs. From out of his savings he intends to purchase goods and services that he may require in the future. Such savings, that are not intended for current use results in investment. Thus, saving results in investment. Why does a person invest at all? Whatever may be the type of asset in which investment is made, the investor aims at achieving either some income on the money invested or some growth in the value of money invested or both. Thus, investment may be defined as deployment of funds made with an anticipation of earning some return. The return may be in the form of income, increase in value or both.

Investment Avenues was created to help the small investor gain an advantage in the stock market. Born from the belief that stocks gain and carry momentum and that by trading stocks with positive momentum, any investor can realize a profit. Investment Avenues gathers information on over 11,000 stocks every day, using this data we compile a daily list of stocks that can put cash in your pocket.

OBJECTIVES

1. To know level of investment by the investors. 2. To know about different investment avenues. 3. To know about consumer perception about different investment avenues.

REVIEW OF LITERATURE
K.Balanaga Gurunathan Asst. Professor (Finance), Institute of Finance and International Management, Bangalore (2007) studied an investors three objectives while investing his money, namely safety of invested money, liquidity position of invested money and return on investment. The securities are considered as the most challenging as well as rewarding. Securities include shares, debentures, derivatives, units of mutual funds, Government securities etc.

Securities and Exchange Board of India (SEBI) and NCEAR (2000) Survey of Indian Investors have reported that Safety and Liquidity were the primary considerations which determined the choice of an asset. Rajarajan (2000) predict individual investment choices (e.g., stocks, bonds, real estate) based on lifestyle and demographic attributes. The investors see rewards as contingent upon their own behavior (Rajarajan, 2002).

Kishore (2005) opined that investments in mutual fund are always risky and presented the problems and risks faced by mutual fund investors. He discussed the present scenario of the Indian mutual fund market and suggested various ways to invest safely in mutual funds. Capon,etal (2004) investigated the manner in which consumers make investment decisions for mutual funds and reported that many non-performance related variables are being considered by investors. When investors are grouped by similarity of investment decision process, a single small group appears to be highly knowledgeable about its investments. However, majority of the investors appear to be nave, having petite knowledge of the investment strategies or financials of the investments.

Gallaher, etal (2006) explored that the effect of mutual fund familys strategic decisions, particularly the advertising decision, on investor flows into the families. They found evidence that beyond performance a familys strategic decisions such as advertising, distribution channels, fund offerings and expense ratios, have significant effects on investor flows.

Karthikeyan (2001) has conducted research on Small Investors Perception on Post office Saving Schemes and found that there was significant difference among the four age groups, in the level of awareness for kisan vikas patra (KVP), National Savings Scheme (NSS), and deposit Scheme for Retired Employees (DSRE),and the Overall Score Confirmed that the level of awareness among investors in the old age group was higher than in those of young age group.

Mullainathan, etal (2005) conducted a research and found that persuasion is a primary part of social activity in financial service sector. They present a simple formalization of the behavioral model, and compare it with traditional economic model using data on financial advertising in money and business week magazines over the course of the internet bubble. They found that the content of the persuasive messages is broadly consistent with the behavioral model of persuasion.

The Delhi-based Society for Capital Markets (Gopalsamy, 2005) conducted a study (October 1998) that revealed that the majority of retail investors have lost confidence in various agencies associated with capital markets, including the Securities and Exchange Board of India. Investors have no confidence or low confidence in company managements, auditors, stock brokers and the SEBI. After the study report of this society, the Government of India has considered to introduce an independent legislation on investor protection to safeguard the interest of small investors in securities market (Shaji, 2001).

Saroja S. (1991), Vinayakam N. (1994) has identified for the investors protection need in following areas such as proper allocation of shares, bonds, etc./or refund of money,

receipt of share/debenture certificates, safety of his hard-earned money and use of money for the purpose stated, Rate of return as promised, actual payment of dividend, and ability to sell the securities as and when he/she needs money. Final Return of his debenture/fixed deposit investments is promised. The former Chairman of SEBI G.N. Bajpai has expressed in his tenure period as My main priority is to build investors confidence and bring the small investor back.... The same view was expressed in the report of the expert group headed by Justice Kania M.H [2005] for suggesting amendments to Securities and Exchange Board of India Act, 1992 deliberated that the investors in the equity market invest in risk capital and no assured return or compensation for non fulfillment of every expectation may be provided in the statute. However, the compensation in respect of fraud or misrepresentations or misstatements by companies or intermediaries may be considered.

Dr. N. L. Mitra to ensure adequate and speedy compensation for investors has recommended the setting up of a comprehensive fund. Since the cases of cheating are generally treated as criminal in nature, the issue of compensating investors assumes secondary importance. This could be overcome if consumer courts are empowered, the report has said.. In fact, the report has suggested that the existing Investor Protection Fund, the corpus of which is to come from unclaimed dividends, should be merged with the new fund (Shaji, 2001). Huhmann and Bhattacharyya (2005) concluded that most (88.8 percent) of mutual fund advertisements do not contain all the essential information on the risk-return trade off, principal agent conflict and transaction costs that consumers need to optimize their investment decisions.

SEBI (2008) has mandated that with effect from April1, 2008, the time for display and voice over of the standard warning be enhanced to five seconds in audio visual advertisements. In case of audio advertisements, the standard warning shall be read in an easily understandable manner over a period of five seconds.