AN ANALYSIS OF INVESTMENT PATTERN OF PROFESSIONALS IN AGRA

Presented By: Garima Chandra Iqra Afsar Shiksha Goyal Tripti Singh

INVESTMENT ANALYSIS
The art and science of making decisions about investment mix and policy, matching investments to objectives, asset allocation for individuals and institutions, and balancing risk against. performance.

Deciding about your investment is all about strengths, weaknesses, opportunities and threats in the choice of debt vs. equity, domestic vs. international, growth vs. safety, and many other tradeoffs encountered in the attempt to maximize return at a given appetite for risk.

Need Of The Study

An investor considering investment in securities is faced with the problem of choosing from among a large number of securities and how to allocate his funds over this group of securities. Again he is faced with problem of deciding which securities to hold and how much to invest in each.

Objectives of the Study

To analyze investment behavior of Professionals in Agra Region To Know their objectives of investment and RiskReturn trade-off To Know their awareness regarding investment options & how experienced they are in judiciously managing their investment

BENEFICIARIES OF THE RESEARCH

Professional investors- This study will help these investors to have a detailed analysis of their investment pattern and will help them to define their objectives of investment and make their investment decisions judiciously according to their objectives Researcher The major beneficiaries from the project would be the researcher themselves as this study would enhance their knowledge about the topic. Student To understand the concept of investment analysis

Further Researchers

Research Methodology

DATA COLLECTION:-The study made in use primary

sources that is through questionnaires. A questionnaire is a research instrument consisting of a series of questions and other prompts for the purpose of gathering information from respondents.

SAMPLING DESIGN: - Convenience sampling has been

adopted for the study.

SAMPLE SIZE:- 20 investors

Questionnaire

QUESTIONNAIRE ANALYSIS & INTERPRETATION

1. What is the primary objective for these assets? -Wealth preservation -Source of Income -Capital Appreciation -Retirement planning/ Education funding/long term wealth accumulation

It shows mixed response of the respondents i.e. individuals have different investment objectives. However majority considers Capital Appreciation as their main objective followed by wealth preservation. This can also be correlated with the income and age of the respondents.

Q2.What is the time horizon you have to achieve your financial goal? -0-5 years -6-10 years -11-14 years -15 years or longer

6-10 years is considered to be the ideal time period by the respondents for achieving the investment objectives. The study also reveals that those who want capital appreciation and wealth preservation preferably chose 6-10 years as the time horizon for achieving their financial goals. People with long term investment plans such as retirement, education funding etc believe to attain their objectives in more than 15 years.

Q3. What is your present age? -55 or Over -Between 45-54 -Between 30-44 -Less than 30

Q4.What is your monthly income (including interest income)? -N100,001 or more -Between N75,000 and N100,000 -Between N30,000 and N74,999 -Less than N30,000

Q5.During the next five years, your monthly income will most likely: -Decline -Remain about the same -Increase slightly -Increase significantly

Almost 95 % of the people surveyed are optimistic about their income in the next 5 years i.e. they expect an increase in their salaries, though with different magnitudes. The present income as well as the expectation regarding the future income greatly affects the investment behavior and objectives of people.

Q6.What percentage of your total investable assets will this account represent? -Less than 25% -Between 25% and 50% -Between 51% and 75% -More than 75%

This shows the increasing tendency of people to invest a substantial part of their wealth these days. Majority are ready to invest up to 25-50% their total assets while a good portion of people believe in investing less than 25 % .However very few wants to invest more than 50 % (this can be attributed to their risk aversion habit, moderate income or inexperienced investors)

Q7.Are you planning any major expenditure greater than 10% of your investment assets? -Within the next year -Within the next 5 years -Within the next 5 to 10 years -None expected

Q8. How do you intend to use the income earned by your investment portfolio? -Reinvest at least 80% of my earnings -Reinvest between 20% and 80% of my earnings -Receive at least 80% of my earnings as income

It is revealed that the majority considers reinvesting 20-80% of their earnings. These are mostly those who are investing for long term wealth preservation. There is also a direct influence of the age of the respondents on their reinvestment preference. People who are less than 30 years are found to be more likely to reinvest a greater part of their income.

Q9. Taking into consideration all sources of income, what is your current attitude towards your income needs? -I can forego at least 10% of my current income -Present income is adequate for present needs -I need at least 10% more income

45% of people consider their present income adequate and hence are looking for a steady growth. This can also be related with the fact that 50% are expecting a slight increase in their income, hence with increased income they will be able to tackle any price rise or inflation.

Q11. Which of the following investments would you feel most comfortable with taking into consideration the risk return trade-off? -Equity securities of established companies -Mix of equity securities and government bonds -Government bonds

It is found that majority prefers a diversified portfolio with a mix of some stable income from government bonds & also taking advantage of the quick returns from equity investments.

12. What factor would you consider most important before choosing an investment? -How quickly I will be able to increase my wealth. -The opportunity for steady growth. -The amount of monthly income the investment will generate. -The safety of my investment principal.

40% of the investors are looking for a stable growth which also explains their inclination towards a diversified portfolio. Also as majority consider their present income adequate and are below the age of 30, hence they tend to look for a steady growth with time as their families and responsibilities are likely to increase.

Q13. Which of the following best describes your reaction if the value of your portfolio suddenly declined 15%? -I would be very concerned because I cannot accept fluctuations in the value of my portfolio. -I invest for long term growth, but would be concerned about even a temporary decline. -If the amount of income I received was unaffected, it would not bother me. -I invest for long term growth and accept temporary fluctuations due to market influences.

It is revealed that as majority prefer to invest for a long term and expect a steady growth, hence they ignore the temporary fluctuations in the value of portfolio. While 25% of those investing for long term will still be concerned.

Q14. When it comes to investing in stock or bond mutual funds (or individual stocks and bonds), how would you describe yourself? -Very inexperienced investor -Somewhat inexperienced investor -Somewhat experienced investor -Experienced investor -Very experienced investor

35% of investors consider themselves as experienced investors, which also reflects in their preference towards a diversified portfolio and reinvestment of their investment earnings. Another factor to be considered is that they are all educated professionals hence are exposed to the various details to be considered while investing.

LIMITATIONS OF THE STUDY

Sample limitation as we could approach only a limited number of professionals. Majority of the professionals being of the same profile, results found are lopsided. Knowledge constraint on the part of the researchers. People were hesitant to reveal inside information such as their income and investment amount

Findings & Recommendations

Individuals have different investment objectives. However majority considers Capital Appreciation as their main objective followed by wealth preservation. The ideal time horizon for investment is 6-10 years i.e. it is considered to be the ideal time period by the respondents for achieving the investment objectives

The present income as well as the expectation regarding the future income greatly affects the investment behavior and objectives of people.
Majority are ready to invest up to 25-50% their total assets while a good portion of people believe in investing less than 25 % .However very few wants to invest more than 50 % (this can be attributed to their risk aversion habit, moderate income or inexperienced investors)

Findings & Recommendations

It is revealed that the majority considers reinvesting 20-80% of their earnings. These are mostly those who are investing for long term wealth preservation. There is also a direct influence of the age of the respondents on their reinvestment preference. People who are less than 30 years are found to be more likely to reinvest a greater part of their income. It is found that majority prefers a diversified portfolio with a mix of some stable income from government bonds & also taking advantage of the quick returns from equity investments. 35% of investors consider themselves as experienced investors, which also reflects in their preference towards a diversified portfolio and reinvestment of their investment earnings. It is revealed that as majority prefer to invest for a long term and expect a steady growth.

Thank you