INTRODUCTION

An investment operation is one which, upon thorough analysis, promises safety of principle and
a satisfactory return. Operations not meeting these requirements are speculative. - Graham &
Dodd.

An investment is the choice by the individual, after thorough analysis, to place or lend money in
a vehicle (e.g. property, stock securities, bonds etc.) that has sufficiently low risk and provides
the possibility of generating returns over a period of time. Investing is the active redirection of
resources: from being consumed today, to creating benefits in the future; the use of assets to earn
income or profit.

There are a large number of investment instruments available to the investors. These investment
instruments perform different tasks. The insurance is mainly used to provide risk cover to the
individuals; property investments are usually for long term gains; bank FDs and government
securities are used mainly for secure returns on investments while equity investment and Mutual
Funds are used for wealth creation as they give very high returns. Though they give very good
returns to the investors the risk associated with these instruments is also higher. As a result it is
likely that the investors also lose their money while investing in these instruments.
The present scenario is a good time to study what the investors are expecting from their
investments and how aware they are about the different modes of investments that are available
to them. With the recovery of the stock markets the investors are also looking to get back to
investing. The time is very good for marketing of various investment instruments as the investors
want to put their idle money to some productive use.
 LITERATURE REVIEW

Any research builds on the research carried out previously on the given subject. The purpose of
the literature review is to review what has previously been done on the subject and analyze it in
the present context so that an effective understanding can be established.

Before conducting this project, some work which has been done previously on the subject of the
awareness, preference & pattern of investment were consulted. This helped the author greatly in
building up a framework for his project. A review of the works is presented below.

N. Geetha1 & Dr. M. Ramesh2 (Nov 2011) - They conducted the study with the objective to
analyze the investment choice of people in Kurumbalur. Analysis of the study was undertaken
with the help of survey conducted. After analysis and interpretation of data it was concluded that
in Kurumbalur respondents were medium aware about various investment choices but they did
not know about stock market, equity, bonds and debentures. The study was conducted by taking
a limited number of samples. This study reflects the perceptions of those respondents who are
residing in Kurumbalur. There might be a chance that the perceptions of the respondents of
different area may vary due to diversity in social life, living pattern, income level etc. All the age
groups studied given more importance to investment in Insurance, NSC, PPF and bank deposits.
Income level of a respondent is an impotent factor which affects portfolio of the respondent.
Middle aged group, Lower income level groups respondents preferred to invest in Insurance,
NSC, PPF and bank deposit rather than any other investment avenues. In Kurumbalur
respondents were more aware about various investment avenues like Insurance, PPF, bank
deposits, small savings like post office savings etc. For that awareness program has to be
conducted by Stock Brokering firms because most of the respondents are unaware about this new
service and about stock market.

Luigi Guiso and Tullio Jappelli (2005) - In their research paper they document lack of awareness
of financial assets in the 1995 and 1998 Bank of Italy Surveys of Household Income and Wealth.
It then explores the determinants of awareness, and finds that the probability that survey
respondents are aware of stocks, mutual funds and investment accounts is positively correlated
with education, household resources, long-term bank relations and proxies for social interaction.
Lack of financial awareness has important implications for understanding the stockholding
puzzle and for estimating stock market participation costs.
Starting from the observation that in two large, representative surveys of Italian households a
significant fraction of consumers are not aware of the existence of basic financial assets such as
stocks and mutual funds, this paper makes two contributions to the literature on household
portfolios. First, it proposes an explanation for the mechanism whereby asset awareness may be
acquired. In addition, social learning represents a further channel through which potential
investors can become aware of financial assets, though it may induce distributors to disseminate
less information. In the empirical analysis, it shows that awareness is positively affected by
demographic variables - education, wealth, and income and birth cohort - that increase the
probability of stockholding, long-term bank relations, intensity of social interactions and national
newspaper readership in the area where investors live. Second, we show that lack of awareness
can help explain limited participation in financial markets. Ignorance of investment opportunities
is a specific impediment to stockholding that goes beyond the generic reference to fixed adoption
costs as a cause of non-participation typically found in the literature. Their calculations show that
if all investors were aware of risky assets, stock market participation could increase substantially
(and even double) from its current level. Yet they also find that a large fraction of potential
investors do not own stocks even if aware, suggesting that other barriers exist even when
awareness is accounted for.

Manoj Kumar Dash (2008) - In the study the author aims to gain knowledge about key factors
that influence investment behavior and ways these factors impact investment risk tolerance and
decision making process among men and women and among different age groups. The
individuals may be equal in all aspects, may even be living next door, but their financial planning
needs are very different. It is by using different age groups along with Gender that synergism
between investors can be generated. In this context, demographics alone no longer suffice as the
basis of segmentation of individual investors. Hence keeping this in mind, the present study is an
attempt to find out Factors which affects individual investment decision and Differences in the
perception of Investors in the decision of investing on basis of Age and on the basis of Gender.
The study concludes that investors age and gender predominantly decides the risk taking
capacity of investors.
He concluded that the modern investor is a mature and adequately groomed person. In spite of
the phenomenal growth in the security market and quality Initial Public Offerings (IPOs) in the
market, the individual investors prefer investments according to their risk preference. For e.g.
Risk averse people choose life insurance policies, fixed deposits with banks and post office, PPF
and NSC. Occasions of blind investments are scarce, as a majority of investors are found to be
using some source and reference groups for taking decisions. Though they are in the trap of some
kind of cognitive illusions such as overconfidence and narrow framing, they consider multiple
factors and seek diversified information before executing some kind of investment transaction.
The purpose of this study was to determine whether the variables such as demographic
characteristics (age, gender) and investment patterns could be used individually or in
combination to both differentiate among levels of men and women investment decisions and risk
tolerance and develop some guidelines to the investment managers to design their investment
schemes by considering these views of individuals.

Dhiraj Jain (April 2012) - In his research he points out that investment markets are becoming
more risky and each and every passing day makes investors behave differently upon different
market dynamics. The basic methods of market analysis (Fundamental, Technical and
Quantitative) though are playing an important role in investment decisions, the behavior of the
investors has become more important and hence the study Behavioral Finance emerging and
becoming the topic of various researches and studies. In extension to the same, this study
reviews the literature on one of the most meaningful concepts in behavioral finance, the decision
factors which are influenced by market movements and examines the perceptions, preferences
and various investment strategies adopted by investors in the Indian stock market on the basis of
a survey of 110 respondents based in Udaipur and are investors in the stock market during
September 2011-January 2012. The study analyses the rationality of the investors of Udaipur
during different market expectations, dividend and bonus announcements, and the impact of age,
income levels and other market related information on investment decisions of investors from
Udaipur.
The research brings out certain characteristics of investors living in Udaipur. The ability to
understand the judgment criteria like rationality and irrationality in investment pattern and
behavior which enables the investor to be cautious as its consequences affect the lifestyle, asset
value and relationship with others. The present study has shown that investors prefer investing in
both primary and secondary market instruments. Most of the decision are rational and influenced
by the various information available in market. It was also found that investors prefer the wait
and watch policy for taking their decision, and are very cautious and their decisions are
influenced by various psychological factors and behavioral dimensions.

The Neilson Life survey (2008) - The survey was conducted by Neilson a well-known market
research company. The goal of the study was to study the investment scenario in India and find
out which investment instruments were popular with the Indian public. This subject has a close
correlation with the research subject of the present project. The survey was conducted by
distributing questionnaires and interviewing people from all over the country. Working men and
women from SEC A, B, and C in the age group 22-50 years were interviewed. The study
involved 12,760 respondents. The survey indicated that for Indian investors insurance was the
most popular form of investment with 44% people investing in it. Bank Fixed Deposits which
has 35 percent votes. Gold (33%) and Property (23%) are the other favorites among locals. The
current financial turmoil makes it a tough case for equity markets. Life Insurance topped the list
of future investment instruments with 30 percent respondents agreeing to consider it as a future
investment option, followed by Bank Fixed Deposits (11%), Gold and Property (both 7%), and
Life Insurance Child Plans (6%). This was attributed to the fact that due to the financial crisis the
people were increasingly looking forward to safer investment options.
The survey also studied the marketing of the investment options and found that Agents are the
main source of information on insurance policies. Friends/ peer group emerge as a significant
source of information (58%). Media also plays an important role in spreading awareness about
various insurance policies, which includes Television Advertisements (55%), Newspapers (35%),
and Outdoor Hoardings (33%).

The survey also studied the marketing of the investment options and found that Agents are the
main source of information on insurance policies. Friends/ peer group emerge as a significant
source of information (58%). Media also plays an important role in spreading awareness about
various insurance policies, which includes Television Advertisements (55%), Newspapers (35%),
and Outdoor Hoardings (33%).

These three surveys formed the basis of conducting this research and helped in formulating a
direction for this research. The basics about Mutual Funds and their marketing as well as
research methodology are explained in the subsequent chapters.

In order to study the behavior a review of literature was done to develop the concept and
understand what had been done earlier. Stock markets performance is not simply the result of
intelligible characteristics but also due to the emotions that are still baffling to the analysts.
Despite loads of information bombarding from all directions, it is not the cold calculations of
financial wizards, or companys performance or widely accepted criterion of stock performance
but the investors irrational emotions like overconfidence, fear, risk aversion, etc., seem to
decisively drive and dictate the fortunes of the market. There are a lot of investment choices and
one must select the most appropriate one. The person dealing with the planning must know all
the various investment choices and how these can be chosen for the purpose of attaining the
overall objectives. The details of making the investment along with the various ways in which
the investment has to be maintained and managed.

The survey also studied the marketing of the investment options and found that Agents are the
main source of information on insurance policies. Friends/ peer group emerge as a significant
source of information (58%). Media also plays an important role in spreading awareness about
various insurance policies, which includes Television Advertisements (55%), Newspapers (35%),
and Outdoor Hoardings (33%).
These three surveys formed the basis of conducting this research and helped in formulating a
direction for this research. The basics about Mutual Funds and their marketing as well as
research methodology are explained in the subsequent chapters.
 RESEARCH METHODOLOGY

Since the year 2000 a big boom has been witnessed in the Indian Stock Market when the market
showed the coming up of Online Trading System many online stock trading companies came but
initially due to lack of online trading some companies vanished and some survived. The
companies which survived are getting the handsome returns also attracting the foreign
Investment Companies. Nowadays this sector is facing cut-throat competition and also provides
huge growth prospects. The study then goes to evaluate and analyze the findings so as to present
a clear picture of awareness of the investors about various investment instruments and also their
preferences & pattern so that broking firms can utilize the findings in devising marketing
strategies in the online trading & demat service sector.

The present financial environment provides ample opportunities of investment to the investors.
The decision to invest in right instrument is too complex which can meet their expectations
perfectly. So a study has been done which explain about the perception of respondents what they
exactly see at the time of investment which includes their tendency, preference and factors
through which an investor is influenced. The study also focuses on analyzing the investment
patterns of the investors.

Research Objectives:
To study awareness of various financial products like Equity, Commodity, Currency, Mutual
Funds, Derivatives, etc., among investors.
To Study the preference of investors towards various investment instruments available in
stock market.
Study of influencing factors affecting the investment decision.
To study the pattern of investment in different instruments.
Research Design:
The research design specifies the methods and procedures for conducting a particular study. The
type of research design applied was Descriptive as the objective was to find awareness of
customer about various investment instruments available in Indian stock market. The objectives
of the study restricted the choice of research design up to descriptive research. Therefore, no
fixed hypothesis was set up. This survey will help the firm to know how & why the investors
invest in different investment instruments & which factors affect their investment preference.
As the name implies, objective of research was to describe something-usually market functions
or characteristics. The research was basically a typical descriptive research and it was pre-
planned and well structured. The research was a formal one and its design specified the methods
for selecting the sources of information and collecting data from other sources.

Research Methodology:
Research methodology is a way to systematically represent a research on any problem. It may be
understood as a science of analyzing the details of how research is done scientifically. The
methodology may differ from problem to problem, yet the basic approach towards the research
remains the same. It is undertaken by the researchers in studying the research problem along with
the logic that works behind them. It tends to define the methodology for the solution of the
problem that has been undertaken for the purpose of the study. This part focuses on the
techniques that were used for the collection, classification and tabulation of data. The latter part
explains the manner in which the data was analyzed; so as to reach to conclusive results.

Data Collection:

Instruments Used
The primary data was collected by preparing a Questionnaire & it was done by administering a
survey. The questionnaire used was a printed, well-structured formalized schedule to obtain and
record specified and relevant information with fair accuracy and completeness. An Online
Survey was also done with the same Questionnaire due to time constrain. The questionnaire
consisted mainly of close ended questions (dichotomous & multiple choices) and rank order
scale.
The questioning process was face to face interviews and the questionnaire was designed in such
a way that it could be understood and answered easily by the respondents. Respondents were
asked to tick one option in multiple choice questions and were asked to rate certain given
parameters on rating scale (Likert scale). The questionnaire included questions based on the
investment pattern, general awareness of investment instruments, criteria for investment &
factors affecting choice of investment instruments.

Sampling Design
The sample comprised of 50 respondents in an age-group of 20 to 65. The sample was selected
on non-probability basis using convenient and location sampling. A representative sample
consisting of students, working professionals, businessmen and housewives was used. All people
residing in Delhi-NCR between 20 & 65 years of age were considered the population.

Data Analysis
The information from primary data was verified for accuracy, adequacy and pertinence to the
objectives of this study. The data so obtained was coded and tabulated and recorded for analysis.
This was done using Statistical Package for Social Sciences (SPSS.20). Analysis of the entire
data collected from questionnaire was done by applying various statistical techniques such as
Tabulation, Graphs, Pie Charts, etc., in a systematic manner.

Limitations:
The present research paper was aimed to achieve the defined objectives in full earnest and
accuracy, although there were certain limitations:

Time and Cost - The time and cost play an important role where one goes for a particular
study. Both of these factors become constraints especially when a study is conducted at
academic level.

Sample Size - Due to time and cost constraints the large sample was not taken. Since the
study conducted was with a small sample hence the exact picture cannot be revealed and the
 findings cannot be generalized.
Choice of Population - The population selected was limited to the places in Delhi NCR.
Hence results would have altered if some other population had been selected.

Inherent Discrepancies in the Questionnaire - The questionnaire might be having some

undetectable errors and limitations, which could shape the responses into a particular fashion.
No pre-test was done before the circulation of the questionnaire.

Bias in Response - The data is entirely based on responses given by respondents which may
be biased due to their personal bias in replying the questions. They may not be very serious
or interested in replying the questions and take it very lightly, due to which data may not be
very accurate.

Negligence by Respondents - People were not willing to answer the entire questionnaire due
to the less time available to them. Many were reluctant in divulging their financial details.