Investment motives and preferences – An empirical inquiry during COVID-19
-
DOIhttp://dx.doi.org/10.21511/imfi.18(2).2021.01
-
Article InfoVolume 18 2021, Issue #2, pp. 1-11
- Cited by
- 1959 Views
-
1905 Downloads
This work is licensed under a
Creative Commons Attribution 4.0 International License
Following the COVID-19 breakout, investment in shares, mutual funds, and life insurance are witnessing a growing trend in India. Hence, examining the determinants of investor preferences is necessary to maintain a positive trend. This study analyzes the impact of investor motives and awareness on investor preferences using the data collected from 753 Indian investors in 2020. Factor analysis grouped the investment motives into six categories, namely Nature of investments, Future financial needs, Investor personal characteristics, Safety and stability of investments, Investor behavioral aspects, and Investor’s options. The regression model used to find the impact of the investment motives and the awareness on the investor preferences explains 52.3% of changes in investor preference. Investment factors like Nature of investments, Investor personal characteristics, Investor behavior, Investor options, Awareness of mutual funds, and shares have a significant impact on investor preferences. Further, the awareness level of mutual funds and the stock market are the major variables contributing to Investors’ preference rather than identified investment factors. Investors’ personal characteristics like knowledge, confidence, ability, responsibility, and belief negatively influence investor preferences. This study adds to the existing literature by analyzing investment motives and preferences during the pandemic.
- Keywords
-
JEL Classification (Paper profile tab)G11, G20
-
References25
-
Tables11
-
Figures0
-
- Table 1. Mean response to various investment motives
- Table 2. KMO and Bartlett’s test
- Table 3. Identified factors
- Table 4. Percentage of variance explained
- Table 5. Mean preference for investment avenues
- Table 6 Aggregate awareness level of investment avenues
- Table 7. Correlation between variables
- Table 8. Regression model
- Table 9. Regression results
- Table 10. Regression coefficients
- Table A1. Respondent profile
-
- Alvares, C. (2020). Retail investors are the new bulls in equity markets. Mint – stock markets.
- Aparajita, S. (2020) 40% jump in online insurance sales on Covid-19 lockdown. Business Today – Money Today.
- Bernet International. (2020). Bernet International sees an increase of People Investing in the Stock Market during the COVID-19 Pandemic. Global Newswire.
- Bhuvaneswari, C. (2013). A study on investor’s perception towards equity/tax saving mutual funds. Care Journal of Applied Research, 3(1), 18-21.
- Bloom. (2011). Population dynamics in India and implications for economic growth. The Handbook of the Indian Economy.
- Central Depository Services Limited. (2020). Annual report 2019–2020. Central depository services limited.
- Dhaval Prajapati, Dipen Paul, Sushant Malik, & Dharmesh K. Mishra (2021). Understanding the preference of individual retail investors on green bond in India: An empirical study. Investment Management and Financial Innovations, 18(1), 177-189.
- Express News. (2020). Despite COVID-19 pandemic, Mutual funds’ investments rise fourfold. The New Indian Express.
- Financial Express Bureau. (2020). COVID-19 & awareness: Life insurance industry sees surge in critical illness cover along with term plans. Financial Express.
- Goyal, M., & Sharma, A. (2014). A study of investment behaviour of middle-income group towards different kinds of investment avenues. IOSR Journal of Business and Management, 16(8), 1-10.
- Harikanth, & Pragathi. (2014). Role of Behavioural Finance in Investment Decision Making- A Study on Select Districts of Andhra Pradesh, India. Shiv Shakti International Journal in Multidisciplinary and Academic Research, 1(4), 20-28.
- K. Senthil Kumar, C. Vijaya Banu, & V. Lakshmana Gomathi Nayagam (2008). Financial Product Preferences of Trichirapalli investors using Analytical Hierarchy process and fuzzy Multi Criteria Decision Making. Investment Management and Financial Innovations, 5(1).
- Kukreja, G. (2012). Investors’ perception for stock market: evidence from national capital region of India. Interdisciplinary Journal of Contemporary Research in Business, 4(8), 712-726.
- Mahadevi, T., & Krishnan P. (2014). A study on the perception of stock market investments among government employees in Calicut city. Asian Journal of Management Research, 4(3), 501-508.
- Parimalakanthi & Ashok Kumar. (2015). A study pertaining to investment behaviour of individual investors in Coimbatore city. International Journal of Advance Research in Computer Science and Management Studies, 3(6), 149-157.
- Rajeswari, J. (2014). An analysis of income and investment pattern of working women. International Journal of Research in Management & Technology, 4(6), 139-146.
- Ravi. (2020). Premium on life insurance policies to rise; coronavirus hit motor, travel policies hard. Financial Express.
- Riyazahmed, K., & Saravanaraj, M. G. (2016). Implications of heuristics in financial decision making. Asian Journal of Research in Social Sciences and Humanities, 6(7), 1245-1251.
- Sahinidis, A. G., Tsaknis, P. A., Gkika, E., & Stavroulakis D. (2020) The Influence of the Big Five Personality Traits and Risk Aversion on Entrepreneurial Intention. In A. Kavoura, E. Kefallonitis, & P. Theodoridis (Eds), Strategic Innovative Marketing and Tourism. Springer Proceedings in Business and Economics. Springer, Cham.
- Saibaba, R., Prakash, B., & Kalyani, V. (2002). Perception and attitude of women towards life insurance policies. Indian journal of marketing, 32(12), 10-12.
- Securities Exchange Board of India. (2016). SEBI Investor survey 2015 (Doc no. 1491452612271) .
- Securities Exchange Board of India. (2020). Continuation of Phase II of UPI with ASBA due to Covid-19 virus pandemic (Circular No SEBI/HO/CFD/DIL2/CIR/P/2020/50).
- Shukla, S. (2016). Investors’ reference towards investment avenues with special reference to salaried personnel in north. International Journal for Science and Advanced Research in Technology, 2(1), 20-30.
- Srividya, V. (2009). The investor dynamics in the avenues offered by the Indian financial system. Journal of Contemporary Research in Management, 4(2), 19-29.
- Vijayakumar, B. (2015). Investor’s perception in equity market investments in India with special reference to Chennai. Madras University Journal of Business and Finance, 3(2), 66-78.