Comparative Study Of Individual Investors: Physical Assets Vs Financial Assets (2024)

A Final Project on “Comparative Study Of Individual Investors: Physical Assets Vs Financial Assets” was submitted by Adhavan.V (from Sri Krishna Arts and Science College, Coimbatore, INDIA 641008) toextrudesign.com.

Comparative Study Of Individual Investors: Physical Assets Vs Financial Assets (1)

Abstract

The financial position of a country largely depends on the inflation rate, foreign exchange rate, per capita Gross domestic product, etc. Savings from middle-class households also plays a vital role in improving the financial position of a country as it leads to more investments and capital formation in the economy. Savings and investments are directly proportionate to each other.An investment is an asset or item that is purchased with the hope that it will generate income or appreciate in the future. In an economic sense, an investment is the purchase of goods that are not consumed today but are used in the future to create wealth. In finance, an investment is a monetary asset purchased with the idea that the asset will provide income in the future or appreciate and be sold at a higher price. Investment refers to the commitment of funds at present, in anticipation of some positive rate of return in future. Today the spectrum of investment is indeed wide. An investment is confronted with an array of investment avenues like Equity share, Mutual fund, Public Provident Fund, Bank Deposits/ FD, Gold/Silver, Insurance, Real Estate, National Pension scheme. Among all investments, investment in banks deposits, Public Provident funds are safest and most preferred by individuals and in equity proportionately are most profitable. India economies doing indeed well in recent years.

Keywords: Individual investors, Physical assets, Financial assets, Risk and return, Mutual funds.

1. Introduction

1.1 Overview of the Study:

The term investment ‟signifies a commitment of funds for a fruitful purpose. Fischer and Jordan rightly defined investment as “a commitment of funds made in the expectations of some positive rate of return. If the investment is positively undertaken, the return will be commensurate with the risk the investor assumes”. The activity of investment involves the judicious and proper employment of funds intending to achieve additional income or growth in values. Investment also involves a commitment of resources, which have been saved in the hope that some benefits will accrue in future. The essential quality of an investment is that it involves waiting for a reward. Investing entails a continuous flow of decisions that cannot be avoided. All investment choices are made at different points of time and in contemplation of an uncertain future. Investors will reappraise from time to time and review their various investment commitments in the light of new information and changed expectations. The investors reinforce their bargaining position by analyzing the investment opportunities available in the market. Thus, individual investors choose investment avenues considering their needs for investing out of their savings.

The individual investors would like to know the investment avenues so that they can use their discretion and invest in those avenues, which will give them security and stable return. The ultimate aim of individual investors is to find a variety of investment avenues that meet their preference for risk and expected return. The investment avenues like financial and physical assets have a wide range of risks from risk-free to highly speculative avenues. From this broad-spectrum, individual investors will have to select these avenues that maximize their utility. The investment decisions are influenced by some factors such as preferences, size of the amount involved, the safety of funds, regular and steady returns, easy accessibility and manageability of assets, etc. Hence, individual investors are to choose financial and physical assets that fulfil their future expectations.

1.2 Objective Of The Study:

Primary objective:

To study the investor perception of investing in physical assets vs financial assets

Secondary objective:

To study different investment avenues chosen by a various segments of people.
To study the investor’s awareness in investing in physical assets vs financial assets

1.3 Need Of The Study:

Investing ensures present and future long-term financial security. The money generated from your investments can provide financial security and income. One of the ways investments like stocks, bonds, and ETFs provide income is by way of a dividend. This is an amount paid to shareholders simply for holding the investment. Because many investments pay monthly, quarterly, or annual distributions, you can enjoy passive income that ultimately could replace your paysheet.

1.4 Scope Of The Study:

This study helps to know about the relationship between the investment in physical assets vs financial assets. It is very much essential because investing forms the basis for the development of the economy. If the investment pattern among the physical assets vs financial assets, then it leads to the development of both money and capital market which results in the development of the economy. The present study is undertaken to identify the extent, nature and preferences, perception of the investors employed in the physical assets vs financial assets to ascertain their investment habits. This study will help both the private and government sector investors to plan physical assets vs financial assets investment towards maximizing the returns and various other factors.

1.5 Limitations Of The Study:

The present study traces the trends in investments made by individual investors in financial and physical assets. Since the economic liberalization was initiated in 1990-91; there has been a noticeable shift in the investment pattern on account of changes in lifestyle, the introduction of different investment schemes, the safety of investment, etc. Individual investors prefer to invest in those assets they consider suitable ones or fulfil their needs either in the short-term or in the long term. However, the size of income and savings influence the quantum of investment. The study covers the individual investors engaged in various occupations namely agriculture, business, service, profession and other activities of the Coimbatore district.

2. Literature Review

2.1 Review of literature

VariousstudiesonInvestmentpatterns&Investmentbehaviourofinvestorshadbeenconductedinforeigncountries.Dependingon thevariousissuesofinvestment,thereview hasbeen discussed inbriefasfollows:

Abdulla Yameen (2020)delivered the message, investors will need to be alert to any newdevelopment in the capital market and take advantage of the Investor Education and Awareness Campaign program which is to be undertaken by the Capital Market Section to acquaint of the risks and rewards of investing on the Capital market Speech was also focused on to create a new breed of financial intermediaries, which will deal on the market for their clients. These intermediaries have to be professionals with quite advanced knowledge on stock exchange operations, techniques, law and companies’ valuation. Investors depend to a large extent on their professional advice when investing in the market. Furthermore, these intermediaries must be men of integrity and honesty as they would deal with clients‟ money Confidence of investors in these professionals is a key to the success of the capital market.

Makbul Rahim (2019)argued in his speech that the regulatory framework must provide theright environment for the development and growth of the market. High standards of probity and professional conduct have to be maintained and reach world-class standards. Integrity is very important as well as confidence. The development of a proper free flow of information and disclosure helps investors to make informed investment decisions.

P. M. Deleep Kumar and G. Raju (2019)showed that the capital market is becoming moreand more risky and complex in nature so that ordinary investors are unable to keep track of its movement and direction. The study revealed that the Indian market is probably more volatile than developed country markets, which is probably why a much higher proportion of savings in developed countries go into equities. More than half of individual shareowners in India belonged to just five cities. The distribution of share ownership by States and Union Territories shows that just five States accounted for 74.7 per cent of the country’s share ownership population and 71.7 per cent.

Peter Carr and Dilip Madan (2019)disclosed that generally does not formally considerderivatives securities as a potential investment vehicle. Derivatives are considered at all, they are only viewed as tactical vehicles for efficiently re-allocating funds across broad asset classes, such as cash, fixed income, equity and alternative investments. They studied that under reasonable market conditions, derivatives comprise an important, interesting and separate asset class, imperfectly correlated with other broad asset classes. If derivatives are not held in our economy, then the investor confines his holdings to the bond and the stock and the optimal derivatives position is zero.

Prof. Peter McKenzie (2018)in his speech at seminar investors have a choice instead ofplacing their money in only one company they can pick areas of growth and move their money, buying and selling and placing it where it is going to be most profitable. The individual investor does not have to make an individual decision where to place his savings. These decisions are made by an expert fund manager, which would spread the risk by spreading the investments across different sectors of the economy.

Hong Kong Exchanges and Clearing Ltd. (2018)surveyed derivatives retail investorsand argued first based on empirical evidence that years of trading experience and usual deal size have a positive correlation. Second, Male investors traded to trade more frequently than female investors. Third, the usual deal size of investors with higher personal income traded to be larger. The fourth majority of respondents are motivated by their stock trading experience to start derivatives trading. Fifth, trading for profit is the key reason for derivatives trading other than the high rate of return, hedging, etc. Sixth, the most significant motivating factors are a more liquid market and a more transparent market. Seventh, the majority of traders are infrequent in trade- 3 times or less in a month and Index futures is the most popular product to trade most frequently. Ninth, a large proportion of the investors invest in exchange cash products than derivatives or investment avenues. Through empirical evidence from investor’s opinions, the study argued that the liquidity of derivatives products other than futures is low.

S. M. Imamual Haque and Khan Ashfaq Ahmad (2018)argued that the sluggish trends inprimary equity markets need to be reversed by restoring investors‟ confidence in the market.Savings for retirement essential seek long term growth and for that equity investment is desirable. It is a well-established fact that investments in equities give higher returns than debt and it would, therefore, be in the interest of the banks to invest in inequities.

Warren Buffet (2017)argued that derivatives as time bombs, both for the parties that deal inthem and the economic system. He also argued that those who trade derivatives are usually paid, in whole or part, on “earnings” calculated by mark-to-market accounting. But often there is no real market, and “mark-to-model” is utilized. This substitution can bring on large-scale mischief. In extreme cases, mark-to-model degenerates into mark-to-myth. Many people argue that derivatives reduce systemic problems, in that participants who can’t bear certain risks can transfer them to stronger hands.

Swarup K. S. (2017)empirically found that equity investors first enter the capital market throughinvestment in the primary market. The main reason for the slump in equity offering is a lack of investor confidence in the primary market. It appeared from the analysis that the investors give importance to their own analysis as compared to brokers‟ advice. They also consider market price as a better indicator than analyst recommendations. Accordingly, several suggestive measures in terms of regulatory, policy level and market-oriented were suggested to improve the investor confidence in equity primary markets.

Leyla Şenturk Ozer, Azize Ergeneli and Mehmet Baha Karan (2017)studied that the riskfactor is one of the main determinants of investment decisions. Market participants that are rational investors ultimately should receive greater returns from more risky investments. They also concluded that the crisis and the resulting deep recession in 2002 changed many things, including the market confidence of investors and financial analysts. In addition to decreasing the trading volume of the Istanbul Stock Exchange (ISE), the number of individual investors reduced and the investment horizon of investors shortened and liquid instruments.

JenniferReynolds-Moehrle (2016)used a sample of derivative user and non-user firms; theycame to know that analysts‟ forecast accuracy increased and that unexpected earnings are incorporated into subsequent earnings forecasts to a greater extent after disclosure of sustained hedging activity. Additionally, the findings indicated an increase in the earnings-return relation in the hedging activity period.

Rajeswari, T. R. and Moorthy, V. E. R. (2016)said that expectations of the investorsinfluenced by their perception and human generally relate perception to action. The study revealed that the most preferred vehicle is bank deposit with mutual funds and equity on fourth and sixth respectively.

Chris Veld and Yulia V. Veld-Merkoulova (2015)found that investors consider the originalinvestment returns to be the most important benchmark, followed by the risk-free rate of return and the market return. The study found that investors with longer time horizons would generally be better off investing in stocks compared to investors with shorter time horizons. They knew through the question on risk perceptions that investors who are more risk-tolerant would benefit from relatively larger investments in stocks. Their study showed the investors optimize their utility by choosing the alternative with the lowest perceived risk.

G.N. Bajpai (2015)showed that continuously monitors performance through movements ofshare prices in the market and the threats of takeover improve the efficiency of resource utilization and thereby significantly increases returns on investment. As a result, savers and investors are not constrained by their individual abilities but fascinated by the economy’s capability to invest and save, which inevitably enhances savings and investment in the economy. Thus, the capital market converts a given stock of investible resources into a larger flow of goods and services and augments economic growth. The study concluded the investors and issuers can take comfort and undertake transactions with confidence if the intermediaries as well as their employees (i.) follow a code of conduct and deal with probity and (ii) are capable of providing professional services.

J. K. Nayak (2015)interpreted the preferred mode of investment as first equity, banks,mutual fund, and then any other in descending order. It means investors’ faith has increased and their risk-taking ability has also increased. One thing that could be drawn from this study is that problems are mostly broker-related and therefore that is one area where reforms are required. The investors feel that the amount of knowledge available on the equity market is not satisfactory.

Narender L. Ahuja (2014)expressed Futures and options trading helps in hedging the pricerisk and also provides investment opportunities to speculators who are willing to assume the risk for a possible return. They can also help in building a competitive edge and enable businesses to smoothen their earnings because non-hedging of the risk would increase the volatility of their quarterly earnings. At the same time, too much speculative activity in essential commodities would indeed destabilize the markets and therefore, these markets are normally regulated as per the laws of the country. Randall Dodd and Stephany Griffith-Jones (2013)studied that derivatives markets servetwo important economic purposes: risk shifting and price discovery. Derivatives markets can serve to determine not just spot prices but also future prices (and in the options the price of the risk is determined). In the research, interviews with representatives from several major corporations revealed that they sometimes prefer to use options as a means to hedge. They also argued derivatives have the potential to encourage international capital inflows.

K. Ravichandran (2013)argued the younger generation investors are willing to invest incapital market instruments and that too very highly in the Derivatives segment. Even though the knowledge to the investors in the Derivative segment is not adequate, they tend to make decisions with the help of the brokers or through their friends and were trying to invest in this market. He also argued the majority of the investors want to invest in short-term funds instead of long-term funds that prefer wealth maximization instruments followed by steady growth instruments. Empirical study also shows that market risk and credit risk are the two major risks perceived by the investors, and for minimizing that risk they take the help of newspaper and financial experts. Derivatives act as a major tool for reducing the risk involved in investing in stock markets for getting the best results out of it. Investors should be aware of the various hedging and speculation strategies, which can be used for reducing their risk. Awareness about the various uses of derivatives can help investors to reduce risk and increase profits. Though the stock market is subjected to high risk, by using derivatives the loss can be minimized to an extent.

Nicole Branger and Beate Breuer (2012)showed that investors can benefit from includingderivatives into their portfolios. For retail investors, however, direct investment in derivatives is often too complicated. They argued if the investor can trade only in the stock and money market account, the exposure of his portfolio to volatility risk will be zero, and the relation between the exposure to stock diffusion risk and jump risk will be fixed. Theyproved through documentation both theoretically and empirically that investors can increase their utility significantly by trading plain vanilla options. And also told that in a complete market and with continuous trading, it does not matter which derivatives an investor uses to realize his optimal asset allocation. But with incomplete markets, and in particular, discrete trading, on the other hand, the choice of derivatives may actually matter a lot.

Philipp Schmitz and Martin Weber (2011)exposed that the trading behavior is alsoinfluenced if the underlying reaches some exceptional prices. The probability to buy calls is positively related to the holding of the underlying in the portfolio, meaning that investors tend to leverage their stock positions, while the relation between put purchases and portfolio holdings of the underlying is negative. They also showed higher options market trading activity is positively correlated with past returns and volatility, and negatively correlated with book-to-market ratios. In addition, they report that investors open and close long and short call positions if the past week’s return is positive and write puts as well as close bought and written put positions if the past returns are negative

.B. Das, Ms S. Mohanty, and N. Chandra Shil (2011)studied the behavior of the investorsin the selection of investment vehicles. Retail investors face a lot of problems in the stock market. Empirically they found and concluded which are valuable for both the investors and the companies having such investment opportunities. First, different investment avenues do not provide the same level of satisfaction. And the majority of investors are from the younger group.

Gupta and Naveen Jain (2011)found that the majority of the investors are from the younger groupand as per occupation, salaried persons are more inclined towards investment. The study also argued education qualification is the major influenced factor in investment. Their most preferred investment is found to be shares followed by mutual funds. Empirically they found and argued the Indian stock market is considerably dominated by the speculating crowd, the large scale of day trading, and also the fact the futures trading in individual stocks is several times the value of trading in the cash segment. They also found the largest proportion of the investors are worried about too much volatility of the market. For traders and speculators, price volatility is an opportunity to make quick profits. In the study, high proportions of investors have a very favorable opinion about capital market regulation.

Prasanna P. K. (2011)empirically found that foreign investors invested more in companieswith a higher volume of shares owned by the general public. Foreign investors choose the companies where family shareholding of promoters is not essential. The study concluded that corporate performance is the major influencing factor for investment decisions for any investor.

keep Kumar PM and Deyanandan M N (2011)analyzed the opinion of retail investorson the major market reforms as well as their investment performance. The study revealed the introduction of derivatives trading and internet trading are found useful by only a marginal group of investors. The empirical results of the study concluded that even though SEBI claims itself to be the champion of investor protection, it has not been successful in instilling a sense of confidence in the minds of the majority of investors.

G. Ramakrishna Reddy and Ch. Krishnudu (2011)summarized that a majority of theinvestors are quite unaware of corporate investment avenues like equity, mutual funds, debt securities, and deposits. They are highly aware of traditional investment avenues like real estate, bullion, bank deposits, life insurance schemes, and small saving schemes Study argued the primary motive of investment among small and individual investors is to earn a regular income either in form of interest or dividend on the investment made.

K. Logeshwari and V. Ramadevi (2010)advocated that a commodities market provides aplatform for the investors as well as hedgers to protect their economic interests as well as increase their investible wealth. Commodity prices are generally less volatile than stocks.

Nidhi Walia and Ravi Kiran (2010)studied that to satisfy the needs of investors‟ mutualfunds are designing more lucrative and innovative tools considering the appetite for risk-taking of individual investors. A successful investor strives to achieve not less than a rate of return consistent with the risk assumed. They also argued as per observation by survey responses of the individual investor’s fact is clear that overall among other investment avenues capital market instruments are at the priority of investors but the level of preference varies with different categories/levels of income, and an association exists between income status of investors and their preference for the capital market instrument with return as objective.

Vinay Mishra and Harsh*ta Bhatnagar (2010)documented that Derivatives are consideredto be extremely versatile financial instruments, as they help to manage risks, lower funding costs, enhance yields, and diversify portfolios.The contributions made by derivatives have been so great that they have been credited with having „changed the face of finance‟ in the world. Derivatives markets are an integral part of capital markets in developed as well as emerging market economies.

These instruments assist business growth by disseminating effective price signals concerning exchange rates, indices, and reference rates, or other assets, thereby, rendering both cash and derivatives markets more efficient.

Ashutosh Vashishtha and Satish Kumar (2009)studied encompasses scope an analysis ofhistorical roots of the derivative market of India. The emergence of the derivatives market is an ingenious feat of financial engineering that provides an effective and less costly solution to the problem of risk that is embedded in the price unpredictability of the underlying asset. In India, since its inception derivatives market has exhibited exponential growth both in terms of volume and number of traded contracts. They argued that NSE and BSE have added more products in their derivatives segment but still it is far less than the depth and variety of products prevailing across many developed capital markets.

David Nicolaus (2009)studied that retail derivatives allow retail investors to pursuesophisticated trading, investment strategies, and hedging financial instruments. Retail investors‟ motivation for improving the after-tax return of their household portfolio represents a major driver of the derivatives choice of the products and that provide only little equity exposure for the investor. The derivatives reveal the divergent belief of retail investors about the future price level of the underlying as these can be tailored to the specific demand of the investor. He argued the potential role of search costs and financial advice on the portfolio decisions of retail investors, the flexibility of retail derivatives, and low issuance costs are likely to emphasize the existing frictions.

Gaurav Kabra, Prashant Mishra, and Manoj Dash (2009)studied key factors influencinginvestment behaviors and ways these factors impact investment risk tolerance and decision-making process among men and women and those different age groups. They said that not all investments will be profitable, as investors will not always make the correct investment decisions over the period of years. Through evidence they proved that security is the most important criterion; there is no significant difference of security, opinion, hedging in all age groups. But there is a significant difference in awareness, benefits, and duration in all age groups. From the empirical results,, they concluded the modern investor is a mature and adequately groomed person.

3. Research Methodology

3.1 Research Design

The research design specifies the methods and procedures for conducting a particular study. The objectives of the study have restricted the choice of research design up to descriptive research design. Therefore, no fixed hypothesis is set up. This survey will help the firm to know how the investors invest in equity and mutual funds.

3.2 Sources of data

3.2.1 Primary Source of Data:

The primary source of data is being collected by preparing a Questionnaire
Online questionnaire was given to friends and family and data was collected

3.2.2 Secondary Source of Data:

For having a detailed study about this topic, it is necessary to have some of the secondary information, which is collected from the following: –

Books.
Magazines & Journals.
Websites, Newspapers, etc.

3.3 Sample Design:

3.3.1 Sampling Size:

Thenumbersofrespondentsselectedforconductingthesurveyare100investors.Thesesamplesarecollected onarandombasis.Theinvestor’sresponsesareanalyzedtoknowtheirinvestment in equity and mutual fundswhich factorsplayanimportantroleintheirinvestment decisions&howfartheinvestorsliketoinvestinequity and mutual funds.

3.3.2 Period of study:

The period of study was undertaken from January 2021 to March 2021.

3.3.3 Sampling Method:

Convenience sampling is a specific type of non-probability sampling method that relies on data collection from population members who are conveniently available to participate in the study. Convenience sampling is a type of sampling where the first available primary data source will be used for the research without additional requirements.

3.4PresentationofData

Thepresentationofdataisthrough“CHARTSANDGRAPHS”whichwillhelpinanalyzingthe responseoftheinvestors.In this study sample,, 22 questions were framed for analyzing a comparative between equity investment and mutual funds. Various tools like the Chi-square test and percentage analysis are used for analyzing the data

3.5 Tools for analysis

The collected data were analysed using tools like

Simple percentage analysis
Chi square test
Correlation

Simple Percentage Method

The various factors of are analysed based on the percentage of statistical among the sample size 100 from these samples the percentage of satisfied level are found to give a conclusion

Simple percentage =(No. of the respondents/Total number of respondents)x 100

Chi-Square Test

Chi-square rests symbolically written as i.e., is a statistical measure with the help of which, it is possible to assess the significance of the difference between the observed frequencies and the expected frequencies obtained from some hypothetical universe chi-square test, whether more than two population portions can be considered equal.

x²=∑(Oij – Eij )2 / Eij

Oil = Observed frequency of the cell in theith row andjth column
Eij = Expected frequency of the cell in theith row andjth column

The degrees of freedom if ‘n’ is the number of groups and one constraint is placed by making the totals of observed and expected frequencies equal, the d.f would be equal to (n-1). In the case of a contingency table (i.e., a table with 2 columns and more than 2 rows and more than 2 columns), the d.f is worked as follows:

d.f = (c-1)(r-1)

Where ‘ca means the number of columns and ‘a means the number of rows.

Correlation Analysis

Correlation Analysis is a statistical technique used to measure the magnitude of the linear relationship between two variables. Correlation Analysis is not used in isolation to describe the relationship between variables. To analyze the relation between two variables, two prominent correlation coefficients are used –the Pearson product correlation coefficient and Spearman’s rank correlation coefficient.

In this study, the Pearson product correlation coefficient is used to find the correlation coefficient between respondent’s awareness level at the time of joining with employee’s participation in suggestion scheme & respondents awareness level at present and the counselling. This is also known as simple correlation coefficient and is denoted by “employee’s “r” value ranges from -1, through 0, to +1 It is calculated using the formula

r=∑ XY / √∑ x2.∑ y²

4. Analysis And Discussion

Table No 4.1

Age

S.No	Age	No. of Respondents	Percentage %
1	Less than 20 years	11	11
2	20 – 40 years	16	16
3	40-60 years	29	29
4	Above 60 years	44	44
	Total	100	100

Interpretation

From the above table, we found that 11% of the respondents were at the age group of Fewer than 20 years, 16% of the respondents were at the age group of 20 – 40 years, 29% of the respondents were at the age group of 40-60 years and 44% of the respondents were at the age group of Above 60 years.

CHART NO 4.1

AGE

Comparative Study Of Individual Investors: Physical Assets Vs Financial Assets (2)

TABLE NO 4.2

GENDER

S.No	Gender	No. of Respondents	Percentage %
1	Male	89	89
2	Female	11	11
	Total	100	100

Source: Primary Data

INTERPRETATION

From the above table, we found that 89% of the respondents were male and 11% of the respondents were Female.

CHART NO 4.2

GENDER

Comparative Study Of Individual Investors: Physical Assets Vs Financial Assets (3)

TABLE NO 4.3

MARITAL STATUS

S.No	Marital Status	No. of Respondents	Percentage %
1	Married	66	66
2	Unmarried	34	34
	Total	100	100

Source: Primary Data

INTERPRETATION

From the above table, we found that 66% of the respondents were married and 34% of the respondents were Unmarried.

CHART NO 4.3

MARITAL STATUS

Comparative Study Of Individual Investors: Physical Assets Vs Financial Assets (4)

TABLE NO 4.4

EDUCATIONAL BACKGROUND

S.No	Educational Background	No. of Respondents	Percentage %
1	School level Education	17	17
2	Under Graduate	44	44
3	Post Graduate	19	19
4	Others	20	20
	Total	100	100

Source: Primary Data

INTERPRETATION

From the above table, we found that 17% of the respondent’s education level is School level Education, 44% of the respondent’s education level is Under Graduate, 19% of the respondent’s education level is Post Graduate and 20% of the respondent’s education level is Others.

CHART NO 4.4

EDUCATIONAL BACKGROUND

CHI-SQUARE ANALYSIS

TO FIND THE ASSOCIATION BETWEEN TYPE OF INVESTOR AND NUMBER OF COMPANIES INVESTED

Null Hypothesis

H0-There is a significant difference between the type of investor and the number of companies invested.

H1-There is no significant difference between the type of investor and the number of companies invested.

Table No.4.37

TYPE OF INVESTOR AND NUMBER OF COMPANIES INVESTED

Chi-Square Tests
	Value	df	Asymp. Sig. (2-sided)
Pearson Chi-Square	58.287^a	16	.000
Likelihood Ratio	43.714	16	.000
Linear-by-Linear Association	21.181	1	.000
N of Valid Cases	100

INTERPRETATION

In the above table Pearson Chi-Square result revealed that there is a statistically significant association between type of investor and number of companies invested.χ(4) =58.287^a,p= .000).

TO FIND THE ASSOCIATION BETWEEN SIZE OF INVESTMENT IN SHARESAND PREFERRED MODE OF TRADING

Null Hypothesis

H0There is a significant difference between the Size of investment in shares and the preferred Mode of trading

H1There is no significant difference between the Size of investment in sharesand the preferred Mode of trading

Table No.4.38

SIZE OF INVESTMENT IN SHARES AND PREFERRED MODE OF TRADING

Chi-Square Tests
	Value	df	Asymp. Sig. (2-sided)
Pearson Chi-Square	43.567^a	16	.000
Likelihood Ratio	30.536	16	.015
Linear-by-Linear Association	9.840	1	.002
N of Valid Cases	100

INTERPRETATION

In the above table, the Pearson Chi-Square result revealed that there is a statistically significant association between the Size of investment in shares and the preferred Mode of trading (χ(4) =43.567^a,p= .000).

Correlation Coefficient

To Find Correlation Coefficient Between Monthly Income And Category Of Investment

Let,

X be the respondent’s monthly income

Y be thecategory of investment

TABLE No: 4.39

Comparative Study Of Individual Investors: Physical Assets Vs Financial Assets (38)

Interpretation

The above table gives the relationship between the variables, Monthly income andCategory of investment. The result gives a positive correlation value of 0.843.

To Find Correlation Coefficient Between Mode Of Trading You Prefer And Preferred Company Size To Invest

Let,

X be the Mode of trading you prefer

Y be the Preferred company size to invest

TABLE No: 4.40

Comparative Study Of Individual Investors: Physical Assets Vs Financial Assets (39)

Interpretation

The above table gives the relationship between the variables,mode of trading you prefer and preferred company size to invest. The result gives a positive correlation value of 0.843.

5. Findings And Suggestions

5.1 Findings

Percentage Analysis

The majority of 44% of the respondents were in the age group above 60 years.

Majority of 89% of the respondents were Male.
Majority of 66% of the respondents were Married.
Majority of 44% of the respondent’s education level is Under Graduate.
Majority of 41% of the respondents were Government Employee.
Majority of 22% of the respondents Family size Less than 4, 55% of the respondents Family size 4 to 6 and 23% of the respondents Family size Above 6.
Majority of 42% of the respondent’s number of earning member in their family is 2.
Majority of 41% of the respondent’s monthly income range is Rs. 60,000 & above.
Majority of 49% of the respondents aware about mutual fund through Business newspapers.
Majority of 83% of the respondents were Hereditary investor.
Majority of 70% of the respondents prefer Long term investor.
Majority of 69% of the respondents invested in Less than 10.
Majority of 66% of the respondents were invested Rs. 1 lakh – Rs. 2 lakhs.
Majority of 53% of the respondents saves their savings in share 30% and above.
Most of 32% of the respondents prefer to invest in Mutual fund.
Majority of 77% of the respondents were investing Upto2years.
Majority of 66% of the respondents invest Weekly.
Majority of 69% of the respondents prefer to trade in Offline.
Most of 44% of the respondents choose online trading because it is Easy to transfer funds.
Majority of 55% of the respondents prefer Large cap company.
Majority of 64% of the respondents invest in Equity fund.
Majority of 72% of the respondents says online Trading System is easy and fast.
Majority of 61% of the respondents says Time saving is an important factor in Online Trading System.
Majority of 71% of the respondents says Online Trading helps Indian Stock Market growth.
Most of 37% of the respondents were Awareness of the risk & return parameter is Very high.
Most of 39% of the respondent’s awareness about various schemes is Low.
Majority of 65% of the respondents says importance given for scheme-based investment is Very high.
Most of 37% of the respondents feel risk & return impact on mutual fund investment is Very high.
Majority of 66% of the respondents says Agree that professionals’ advice is useful in investment.
Majority of 71% of the respondents were Agree that government policy should change.
Majority of 72% of the respondents were Strongly Agree that changes in Economic Parameters of our country.
Most of 43% of the respondents were Strongly Agree that changes in world stock market.
Most of 39% of the respondents were Agree that gold rate changes.
Majority of 66% of the respondents were Strongly Agree that financial results of companies.
Most of 44% of the respondents were Agree that corporate announcements of companies.

Chi-Square Analysis

In the above table Pearson Chi-Square result revealed that there is a statistically significant association between type of investor and number of companies invested. χ (4) =58.287a, p = .000).
In the above table Pearson Chi-Square result revealed that there is a statistically significant association between Size of investment in shares and preferred Mode of trading (χ (4) =43.567a, p = .000).

Correlation

The above table gives the relationship between the variables, Monthly income and Category of investment. The result gives positive correlation value of 0.843.
The above table gives the relationship between the variables, mode of trading you prefer and preferred company size to invest. The result gives positive correlation value of 0.843.

5.2 suggestions

There is need to create awareness about commodity Future Market. Awareness program has to be conducted by Angel consultants, because since this was new to the market .so it can be done through by giving advertisem*nts in local channels, Newspapers, by sending E-mail to present customers etc.
From survey it is found that most of the potential customers are concerned about the Brokerage charges so Angel can look upon this. If it can chargemoderate brokerage it will help to attract more and more customers.
“Dabba trading” in commodity market in India.
The FMC should increase the range of commodities in future commodities in commodity market in India.
To motivate the commodity business in India the FMC should come up with some rebate in taxes.
The FMC should increase the delivery centers of commodities in India.
As commodity market is very potential for business, the angel co. should think about various ways to attract the customers.

6. Conclusion

The buying intent of a mutual fund product by a small investor can be due to multiple reasons depending upon the risk-return trade-off. Due to the reduction in the bank interest rates and a high degree of volatility in the Indian Stock market, investors are looking at an alternative for their investments, which will provide them higher, returns and also safety to their investments.

The financial services sector in India is one of the fastest-growing sectors. Awareness of the stock market among the people is increasing day by day. So, it is essential to know about the stock brokerage operating in our country and their services offered. This study identifies the source of awareness of shareholders’ investment proportion in the stock market, factors influencing investors decisions on buying and selling of funds.

Further, the study attempted to determine the satisfaction level on Stock Holding Corporation of India Ltd and the influence of demographic variables on the level of satisfaction. The investors have a good perception about the organization and are found satisfied with the services provided. However, the recommendations were given in this study which will implement for the further growth and development of the company.

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Credit: This project “Comparative Study Of Individual Investors: Physical Assets Vs Financial Assets” was completed by Adhavan.V Under the Guidance of Mrs Gowri lingeswari Assistant Professor Department of Management Science, Sri Krishna Arts and Science College, Coimbatore, INDIA 641008.

S.No	Occupation/Profession	No. of Respondents	Percentage %
1	Salaried	19	19
2	Professional	27	27
3	Business	7	7
4	Government Employee	41	41
5	Retired	6	6
6	Others	0	0
	Total	100	100

S.No	Family size	No. of Respondents	Percentage %
1	Less than 4	22	22
2	4 to 6	55	55
3	Above 6	23	23
	Total	100	100

S.No	No. Of Earning Members	No. of Respondents	Percentage %
1	1	22	22
2	2	42	42
3	3 & above	36	36
	Total	100	100

S. No	Monthly Income	No. of Respondents	Percentage %
1	Below Rs. 20,000	21	21
2	Rs. 20,000 – Rs. 40,000	27	27
3	Rs. 40,000 – Rs. 60,000	11	11
4	Rs. 60,000 & above	41	41
	Total	100	100

S. No	Source of awareness about mutual fund	No. of Respondents	Percentage %
1	Business television Channels	31	31
2	Business newspapers	49	49
3	Investment-related websites.	16	16
4	Social Networks	1	1
5	Others	3	3
	Total	100	100

S.No	Type of investor	No. of Respondents	Percentage %
1	Hereditary investor	83	83
2	New generation investor	17	17
	Total	100	100

S. No	Category prefer to invest	No. of Respondents	Percentage %
1	Long term investor	70	70
2	Day trader	9	9
3	Both	21	21
	Total	100	100

S. No	Number of companies invested	No. of Respondents	Percentage %
1	Less than 10	69	69
2	10 to 20	26	26
3	20 & above	5	5
	Total	100	100

S. No	Size of investment in shares	No. of Respondents	Percentage %
1	Below Rs. 1 Lakh	21	21
2	Rs. 1 lakh – Rs. 2 lakhs	66	66
3	Rs. 2 lakhs & above	13	13
	Total	100	100

S. No	Percentage of savings in shares	No. of Respondents	Percentage %
1	Less than 15 %	26	26
2	15%-30%	21	21
3	30% and above	53	53
	Total	100	100

S. No	Online Trading save transaction time	No. of Respondents	Percentage %
1	Strongly Agree	31	31
2	Agree	49	49
3	Neutral	16	16
4	Disagree	1	1
5	Strongly Disagree	3	3
	Total	100	100

S. No	Professionals’ advice	No. of Respondents	Percentage %
1	Strongly Agree	27	27
2	Agree	66	66
3	Neutral	5	5
4	Disagree	2	2
5	Strongly Disagree	0	0
	Total	100	100

S.No	Changes in Economic Parameters of our country	No. of Respondents	Percentage %
1	Strongly Agree	72	72
2	Agree	11	11
3	Neutral	8	8
4	Disagree	4	4
5	Strongly Disagree	5	5
	Total	100	100

S. No	Changes in gold rate	No. of Respondents	Percentage %
1	Strongly Agree	27	27
2	Agree	39	39
3	Neutral	11	11
4	Disagree	7	7
5	Strongly Disagree	16	16
	Total	100	100

S. No	Preferred investment criteria	No. of Respondents	Percentage %
1	Mutual fund	32	32
2	Stocks	29	29
3	Derivative market	17	17
4	Commodity future trading	22	22
	Total	100	100

S. No	Duration of investment	No. of Respondents	Percentage %
1	Upto2years	77	77
2	2-4Years	13	13
3	4-6Years	2	2
4	Above 6Years	8	8
	Total	100	100

S. No	Frequency of investment	No. of Respondents	Percentage %
1	Daily	21	21
2	Weekly	66	66
3	Monthly	5	5
4	Yearly	8	8
	Total	100	100

S. No	Preferred Mode of trading	No. of Respondents	Percentage %
1	Online	27	27
2	Offline	69	69
3	Both	4	4
	Total	100	100

S. No	Reason to choose online trading	No. of Respondents	Percentage %
1	Immediate placement of orders	9	9
2	Immediate modification of orders	17	17
3	Easy to put many buying and selling orders	2	2
4	Reduction in cost of placing orders	14	14
5	Easy to transfer funds	44	44
6	Online notification of investment tips	14	14
	Total	100	100

S. No	Preferred company size	No. of Respondents	Percentage %
1	Large-cap	55	55
2	Mid cap	31	31
3	Small cap	14	14
	Total	100	100

S. No	Type of Mutual fund inversed	No. of Respondents	Percentage %
1	Debt fund	22	22
2	Equity fund	64	64
3	Both	14	14
	Total	100	100

S. No	Online Trading System is easy and fast	No. of Respondents	Percentage %
1	Yes	72	72
2	No	22	22
3	Don’t Know	6	6
	Total	100	100

S. No	Time-saving is an important factor in Online Trading System	No. of Respondents	Percentage %
1	Yes	61	61
2	No	19	19
3	Don’t Know	20	20
	Total	100	100

S. No	Online Trading helps Indian Stock Market growth	No. of Respondents	Percentage %
1	Yes	71	55
2	No	17	31
3	Don’t Know	12	14
	Total	100	100

S. No	Aware of the risk & return parameter	No. of Respondents	Percentage %
1	Very high	37	37
2	High	13	13
3	Low	19	19
4	Very Low	31	31
	Total	100	100

S. No	Aware of the scheme-based parameter in mutual fund	No. of Respondents	Percentage %
1	Very high	21	21
2	High	29	29
3	Low	39	39
4	Very Low	11	11
	Total	100	100

S. No	The importance given for scheme-based investment	No. of Respondents	Percentage %
1	Very high	65	65
2	High	25	25
3	Low	10	10
4	Very Low	0	0
	Total	100	100

S. No	Risk & return impact on mutual fund investment	No. of Respondents	Percentage %
1	Very high	37	37
2	High	13	13
3	Low	19	19
4	Very Low	31	31
	Total	100	100

S. No	Changes in Government Policies	No. of Respondents	Percentage %
1	Strongly Agree	3	3
2	Agree	71	71
3	Neutral	11	11
4	Disagree	5	5
5	Strongly Disagree	10	10
	Total	100	100

S. No	Changes in the world stock market	No. of Respondents	Percentage %
1	Strongly Agree	43	43
2	Agree	21	21
3	Neutral	8	8
4	Disagree	6	6
5	Strongly Disagree	22	22
	Total	100	100

S.No	Financial results of companies	No. of Respondents	Percentage %
1	Strongly Agree	66	66
2	Agree	29	29
3	Neutral	5	5
4	Disagree	0	0
5	Strongly Disagree	0	0
	Total	100	100

S.No	Corporate announcements of companies	No. of Respondents	Percentage %
1	Strongly Agree	31	31
2	Agree	44	44
3	Neutral	16	16
4	Disagree	7	7
5	Strongly Disagree	2	2
	Total	100	100