INTRODUCTION

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 INTRODUCTION OF RELIANCE SECURITIES

Reliance Securities A Reliance Capital Company

OUR PEDIGREE

Reliance Securities comes from the house of Reliance Capital, one of India’s leading &
prominent financial houses.

Founded in 1986, Reliance Capital has come a long way from being into steady annuity
yielding businesses such as leasing, bill discounting, and inter-corporate deposits to
diversifying its activities in the areas of asset management and mutual fund; life and
general insurance; consumer finance and industrial finance; stock broking; depository
services; private equity and proprietary investments; exchanges, asset reconstruction;
distribution of financial products and other activities in financial services.

Reliance Capital has a net worth of Rs. 7,887 crore (US$ 2 billion) and total assets of Rs.
32,419 crore (US$ 7 billion) as on June 30, 2011.

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 RELIANCE SECURITIES

Reliance Securities Limited is a Reliance Capital company and part of the Reliance
Group.

Reliance Securities endeavors to change the way investors transact in equities markets
and avails services. It provides customers with access to Equity, Derivatives, Mutual
Funds & IPOs. It also offers secured online share trading platform and investment
activities in secure, cost effective and convenient manner. To enable wider participation,
it also provides the convenience of trading offline through variety of means, including
Call & Trade, Branch dealing Desk and its network of affiliates.

Reliance Securities has a pan India presence at more than 1,700 locations.

Reliance Capital is one of India's leading and fastest growing private sector financial
services companies, and ranks among the top 3 private sector financial services and
banking groups, in terms of net worth.

Awards & Achievements

 'Most Admired Service Provider in Financial Sector' by IPE BFSI, 2012

 'Indian E-Retail Awards for Best Customer Experience Award' by Franchise India, 2012
 'My FM Stars of the Industry 2012'for excellence in Online Demat (Broking category)
 Reliance Securities Limited is now ISO 9001:2008 certified for Online Trading Platform
 'Brand Leadership Legacy Award' at the Asian Leadership Awards - Dubai, 2011
 'My FM Stars of the Industry 2011' for excellence in Online Demat / Broking
 'Largest E-Broking House 2010' by Dun & Bradstreet
 'Largest E-Broking House & Best Equity Broking House for the year 2009' by Dun &
Bradstreet
 'Best in category Service Franchise' at the 6th International Franchise & Retail show 2008
 'Best E-Brokerage House 2008' (runner's up) by Outlook Money NDTV Profit Awards
 'Debutant Franchisor of the Year' at the 5th International Franchisee & Retail Show 2007

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 Reliance Securities has been rated no. 1 by Starcom Worldwide for online security and
cost effectiveness in 2007
 Our Management Team
 Vikrant Gugnani - Executive director
 Sanjay Wadhwa - Chief Financial Officer
 Ganesh Pai - Head Compliance
 Hitesh Agrawal - Head Research
 Reliance Securities Ltd
11h Floor, R-Tech Park, Nirlon Compound,
Western Express Highway, Land mark - Near Hub,
behind Oracle Building
Goregaon (East), Mumbai - 400063
Maharashtra.

Reliance Money

The third party distribution business of Reliance Capital, branded as ‘Reliance Money’ is
a comprehensive financial services and solutions provider, providing customers with
access to life and general Insurance products, money transfer, currency exchange, loans
and gold coins.

The history of reliance money can be explain as-

Reliance Money, the financial products retail arm of Reliance Capital, a company owned
by the Anil Dhirubhai Ambani Group (ADAG), has decided to expand distribution
network in rural areas. Reliance Money is involved in selling financial products like life
insurance, general insurance and mutual funds.

In a massive “inclusive growth” initiative, first of its kind in Indian corporate history,
which would provide employment to 50,000 rural youth, the company has decided to
extend its rural reach this fiscal by setting up 10,000 franchisee outlets in 5,165 of the
5,645 tehsils (talukas) of the country, according to a Hindu Business Line report.
Reliance Money has already idenfied and appointed franchisee partners in 1,001 tehsils
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with the help of Rural Relations, a rural consumer-focused organisation. Reliance ADAG
expects to garner 10 to 20% of its total business through this rural thrust.
“We will not adopt a plain vanilla financial services approach, but prepare an area-
specific basket of products,” said Sudip Bandopadhyay, Director and CEO, Reliance
Money. This basket of products, among others, could include insurance plans for cattle,
crop, bullock cart and tractor, term insurances (Rs 25 to Rs 50 pay out for a year’s
coverage), and Systematic Investment Plans (monthly installment of Rs 50 to100).

While the company has already established its presence in Maharashtra, Andhra Pradesh,
Karnataka, Madhya Pradesh, Gujarat and West Bengal, it is now expanding into
Uttarachal, Chhattisgarh, Rajasthan, Tamil Nadu and Orissa.
Reliance money is member of these groups and oranisations.
Equities: Trading through Reliance Securities Limited
NSE SEBI Registration Number Capital Market :- INB 231234833 BSE SEBI
Registration Number Capital Market :- INB 011234839 NSE SEBI Registration Number
Derivatives :- INF 231234833
Commodities : Trading through Reliance Commodities Limited MCX member code:
29030
NCDEX member code: NCDEX-CO-05-00647
NMCE member code: CL0120
Mutual Funds : Reliance Securities Limited
AMFI ARN No.

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 INTRODUCTION OF STOCK EXCHANGE

In today’s scenario there has been a major change i.e. economic prosperity all over. The
entire world is talking about the robust growth rates in this part of the world. Higher
income levels and booming stock markets have led to more and more numbers of high
net worth investors (HNIs). This means the availability of huge investible surplus. The
investors with higher risk appetite want to experiment and try new and exotic products in
the name of diversification. This has resulted in emergence of new options within the
same or fresh asset classes. There are more products available within each asset class be
it Equity, Mutual Fund, Gold, Real Estate The common perception of investors is to buy
when the market supports in uptrend and not to invest in the falling time. They wait for
the stabilization in the market; so in this research, we would like to draw a clear picture
on the trends of traders and investors. Markets have personalities because investors have
emotions. Markets are ultimately driven by people and stock prices are what individuals
make them out to be. People have a tendency to see their own actions and decisions as
totally rational, when the truth is they may not be.

Key points on investor behaviors:

• Investments are often thought of as pieces of paper rather than part ownership of a
company .

•Investors are often impatient to sell a good stock

• Investors often make a distinction between money easily made from investments,
savings or tax refunds and hard-earned money – found money is more readily spent or
wasted.

• People tend to think in extremes – the highly probable news is considered certain,
while the improbable is considered impossible

• Investors often take a short-term viewpoint. Recent market losses lead to suspicion and
caution, while recent gains lead to action

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• Investors may overestimate their skills; attributing success to ability they don’t possess
and seeing order in information or data where it doesn’t exist.
• Investors follow the crowd, and are heavily influenced by other investors or compelling
news; they fail to check out the real facts.

• Investors become obsessed with prices and trend-watching, rather than solid
information. Taken as a whole, these psychologies really have only one effect, that is - a
financial decision is taken that lacks accuracy. And these errors are strongest when
uncertainty, inexperience, attitudes and market pressures come together to undermine
decision-making ability. Each person has his own personal psychology and response
style.

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There are three elements that comprise the essence of success theory:

• The way in which, we as investors deal with loss and failure is just as important, if not
more important, than the way in which we deal with success.

• Effectively controlling and channeling emotions are two very important issues in the
equation for success.

• Those successful continue to be successful as investors, recognize the importance of

market psychology and incorporate it in their work to a certain extent.

Success will tend to take care of itself, if one provides the proper psychological and
behavioral background for it to occur. Goals are wonderful, without them we would be
lost. Yet, the road to success must be paved with behavior, attitude, opinions and
visualization. To be successful as an investor, one needs to develop and maintain similar
attitudes, behaviors and opinions.

In any county, financial system plays a crucial role. India is of no exception. India has
various financial institutions both specialized and non specialized, organized and
unorganized financial markets with wide array of financial instruments. The presence of a
well established financial system facilitates transfer and allocation of funds efficiently as
well as effectively. The sustainability of the financial system mainly depends upon the
pooling of funds and the best allocation of the funds across the various sectors. The
participants in the stock market play a crucial role as they are the fund providers.

The active market participants play a vital role because they are the major source of
funds. Selection and construction of portfolio plays a crucial role when an investor
decides to invest. By constructing an investment portfolio with a combination of
investment avenues, will entitle the investor to diversify his risk and to optimize the
returns. There are three kinds of investors: an investor who wishes to have more return
and least risk, more return with comparatively higher risk and high return with a high
risk. Portfolio construction requires knowledge of the different aspects of the various
investment avenues with regards to safety and growth of the principal, liquidity, selection
of investment, and allocation of funds among the various selected investment avenues.
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The security prices are prone to frequent fluctuations. The major reasons that can be
attributed are the greed and sentiments of the investors due to their expectations which
can neither be quantified nor predicted. There is a behavioral aspect with regards to self-
monitoring.

Self-monitoring refers to a person’s ability to adjust the behavior to the external

behavioral factors. The investment decision of the market participants and thus in turn,
their profit is affected by their attitudinal behavior. So this study might be helpful to
investors who are prone to irrational behavior like herd behavior, regret or loss
avoidance. This study might motivate the active market participants to obtain maximum
return by filtering out as many unhealthy behavioral influences as possible.
In any county, financial system plays a crucial role. India is of no exception. India has
various financial institutions both specialized and non specialized, organised and
unorganised financial markets with wide array of financial instruments. The presence of a
well established financial system facilitates transfer and allocation of funds efficiently as
well as effectively. The sustainability of the financial system mainly depends upon the
pooling of funds and the best allocation of the funds across the various sectors.
The participants in the stock market play a crucial role as they are the fund providers. The
active market participants play a vital role because they are the major source of funds.
Selection and construction of portfolio plays a crucial role when an investor decides to
invest. By constructing an investment portfolio with a combination of investment
avenues, will entitle the investor to diversify his risk and to optimise the returns. There
are three kinds of investors: an investor who wishes to have more return and least risk,
more return with comparatively higher risk and high return with a high risk. Portfolio
construction requires knowledge of the different aspects of the various investment
avenues with regards to safety and growth of the principal, liquidity, selection of
investment, and allocation of funds among the various selected investment avenues.
The security prices are prone to frequent fluctuations. The major reasons that can be
attributed are the greed and sentiments of the investors due to their expectations which
can neither be quantified nor predicted. There is a behavioral aspect with regards to self-
monitoring.

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Self-monitoring refers to a person’s ability to adjust the behavior to the external
behavioral factors.
The investment decision of the market participants and thus in turn, their profit is affected
by their attitudinal behavior. So this study might be helpful to investors who are prone to
irrational behavior like herd behavior, regret or loss avoidance. This study might motivate
the active market participants to obtain maximum return by filtering out as many
unhealthy behavioral influences as possible.
promotes economic efficiency by directing funds from those who do not have an immediate
use for these funds to those who are in need of funds. It also channels money provided by
savers and depository institutions to borrowers and investees through a variety of financial
instruments like stocks and bonds called securities. Going public refers to the process by
which companies make their shares available to the public. In doing so, a company sells
partial ownership of its business to each investor, or “shareholder.” This method of raising
money is called “equity financing.” There are other ways that companies can raise capital,
such as selling debt through bonds and related securities. An Initial Public Offerings (IPO)
refers to the first issue of shares a company makes available to the general public. It is a one-
time transaction between a company and its shareholders. This sale of new shares takes place
in a market is called the “Primary Market.” Companies that want to list their shares on an
exchange must meet stringent financial, public distribution and management standards set by
the exchange. After these standards are met, companies are listed on the exchange and shares
are available to the general public. After a company launches its IPO, shares are bought and
sold in what is called the “Secondary Market.” Bonds are not traded on an exchange, but sold
through investment dealers in an Over the Counter (OTC) environment. The secondary debt
market is comprised of government and corporate bonds with maturities ranging from one
year to perpetuity in theory, although those starting with maturities of more than 20 years are
not common. Issues that have remaining terms 12 years are usually considered to be part of
the long-term market. Derivatives are a special kind of financial instruments. Their value is
based on the characteristics and value of some other underlying asset, including commodities,
bonds, equities or currency.

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 Stock markets refer to a market place where investors can buy and sell stocks.
The price at which each buying and selling transaction takes is determined by the market
forces (i.e. demand and supply for a particular stock).

Let us take an example for a better understanding of how market forces determine
stock prices. ABC Co. Ltd. enjoys high investor confidence and there is an anticipation of
an upward movement in its stock price. More and more people would want to buy this
stock (i.e. high demand) and very few people will want to sell this stock at current market
price (i.e. less supply). Therefore, buyers will have to bid a higher price for this stock to
match the ask price from the seller which will increase the stock price of ABC Co. Ltd.
On the contrary, if there are more sellers than buyers (i.e. high supply and low demand)
for the stock of ABC Co. Ltd. in the market, its price will fall down.

In earlier times, buyers and sellers used to assemble at stock exchanges to make a
transaction but now with the dawn of IT, most of the operations are done electronically
and the stock markets have become almost paperless. Now investors don’t have to gather
at the Exchanges, and can trade freely from their home or office over the phone or
through Internet.

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 History of Indian Stock Exchange:

The Bombay Stock Exchange (BSE) is known as the oldest exchange in Asia. It traces its
history to the 1850s, when stockbrokers would gather under banyan trees in front of
Mumbai’s Town Hall. The location of these meetings changed many times, as the
number of brokers constantly increased. The group eventually moved to Dalal Street in
1874 and in 1875 became an official organization known as ‘The Native Share & Stock
Brokers Association’. In 1956, the BSE became the first stock exchange to be recognized
by the Indian Government under the Securities Contracts Regulation Act. The Bombay
Stock Exchange developed the BSE Sensex in 1986, giving the BSE a means to measure
overall performance of the exchange. In 2000 the BSE used this index to open its
derivatives market, trading Sensex futures contracts. The development of Sensex options
along with equity derivatives followed in 2001 and 2002, expanding the BSE’s trading
platform. Historically an open-cry floor trading exchange, the Bombay Stock Exchange
switched to an electronic trading system in 1995. It took the exchange only fifty days to
make this transition. Capital market reforms in India and the launch of the Securities and
Exchange Board of India (SEBI) accelerated the integration of the second Indian stock
exchange called the National Stock Exchange (NSE) in 1992. After a few years of
operations, the NSE has become the largest stock exchange in India.

Three segments of the NSE trading platform were established one after another. The
Wholesale Debt Market (WDM) commenced operations in June 1994 and the Capital
Market (CM) segment was opened at the end of 1994. Finally, the Futures and Options
segment began operating in 2000. Today the NSE takes the 14th position in the top 40
futures exchanges in the world. In 1996, the National Stock Exchange of India launched
S&P CNX Nifty and CNX Junior Indices that make up 100 most liquid stocks in India.
CNX Nifty is a diversified index of 50 stocks from 25 different economy sectors. The
Indices are owned and managed by India Index Services and Products Ltd (IISL) that has
a consulting and licensing agreement with Standard & Poor’s. In 1998, the National
Stock Exchange of India launched its web-site and was the first exchange in India that
started trading stock on the Internet in 2000. The NSE has also proved its leadership in
the Indian financial market by gaining many awards such as ‘Best IT Usage Award’ by

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Computer Society in India (in 1996 and 1997) and CHIP Web Award by CHIP magazine
(1999).

The stock market is one of the most important sources for companies to raise money.
This allows businesses to be publicly traded, or raise additional capital for expansion by
selling shares of ownership of the company in a public market. The liquidity that an
exchange provides affords investors the ability to quickly and easily sell securities. This
is an attractive feature of investing in stocks, compared to other less liquid investments
such as real estate.

History has shown that the price of shares and other assets is an important part of
the dynamics of economic activity, and can influence or be an indicator of social mood.
An economy where the stock market is on the rise is considered to be an up and coming
economy. In fact, the stock market is often considered the primary indicator of a
country's economic strength and development. Rising share prices, for instance, tend to
be associated with increased business investment and vice versa. Share prices also affect
the wealth of households and their consumption. Therefore, central banks tend to keep an
eye on the control and behavior of the stock market and, in general, on the smooth
operation of financial system functions. Financial stability is the raison d'être of central
banks.

Exchanges also act as the clearinghouse for each transaction, meaning that they
collect and deliver the shares, and guarantee payment to the seller of a security. This
eliminates the risk to an individual buyer or seller that the counterparty could default on
the transaction.

The smooth functioning of all these activities facilitates economic growth in that lower
costs and enterprise risks promote the production of goods and services as well as
employment. In this way the financial system contributes to increased prosperity. An
important aspect of modern financial markets, however, including the stock markets, is
absolute discretion. For example, in the USA stock markets we see more unrestrained
acceptance of any firm than in smaller markets. Such as, Chinese firms with no
significant value to American society to just name one segment. This profits USA

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bankers on Wall Street, as they reap large commissions from the placement, and the
Chinese company which yields funds to invest in China. Yet accrues no intrinsic value to
the long-term stability of the American economy, rather just short-term profits to
American business men and the Chinese; although, when the foreign company has a
presence in the new market, there can be benefits to the market's citizens. Conversely,
there are very few large foreign corporations listed on the Toronto Stock Exchange TSX,
Canada's largest stock exchange. This discretion has insulated Canada to some degree to
worldwide financial conditions. In order for the stock markets to truly facilitate economic
growth via lower costs and better employment, great attention must be given to the
foreign participants being allowed in.

In order to lift the Indian stock market trading system on par with the international
standards. On the basis of the recommendations of high powered Pherwani Committee,
the National Stock Exchange was incorporated in 1992 by Industrial Development Bank
of India, Industrial Credit and Investment Corporation of India, Industrial Finance
Corporation of India, all Insurance Corporations, selected commercial banks and others.

NSE provides exposure to investors in two types of markets, namely:

 Wholesale debt market
 Capital Market

Wholesale Debt Market - Similar to money market operations, debt market

operations involve institutional investors and corporate bodies entering into transactions
of high value in financial instruments like treasury bills, government securities,
commercial papers etc.

Trading at NSE
 Fully automated screen-based trading mechanism
 Strictly follows the principle of an order-driven market
 Trading members are linked through a communication network
 This network allows them to execute trade from their offices
 The prices at which the buyer and seller are willing to transact will appear on the

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 screen
 When the prices match the transaction will be completed
 A confirmation slip will be printed at the office of the trading member
Advantages of trading at NSE
 Integrated network for trading in stock market of India
 Fully automated screen based system that provides higher degree of
transparency
 Investors can transact from any part of the country at uniform prices
 Greater functional efficiency supported by totally computerized network

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 Origin of the Indian Stock Market

The Indian stock market is not a new concept. It has a history of about 299 years old. It
was in early

18th Century, the main institution that is dealing in the trading of shares and stocks is the
East India Company. Later by around 1830′s the main dealing in the shares and stocks
(mainly in bank and cotton) was initiated in Bombay. However, the items in which the
trading took place increased tremendously by the end of 1839. There after the concept
of broker business was started which show momentum in the mid 18th century. This
concept has attracted nm\ember of people to indulge in the trading of items. By 1860, the
number of brokers who are dealing in the trading of items goes up to 60 in number.
Further, the number of brokers increased from 60 to 250 in around 1862-1863.

This is the era of 1980 in which the Indian market had the initial flavor of the trading in
items and the concept of Stock market. Thereafter, it has shown significant changes both
in the pre-independence era and post independence era.

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 BOMBAY STOCK EXCHANGE OF INDIA

The Bombay Stock Exchange is the oldest exchange in India. It traces its history to the
1855, when four Gujarati and one Parsi stockbroker would gather under banyan trees in
front of Mumbai's Town Hall. The location of these meetings changed many times, as the
number of brokers constantly increased. The group eventually moved to Dalal Street in
1874 and in 1875 became an official organization known as 'The Native Share & Stock
Brokers Association'.

In 1958, the BSE became the first stock exchange to be recognized by the Indian
Government under the Securities Contracts Regulation Act. In 1980 the exchange moved
the Phiroze Jeejeebhoy Towers at Dalal Street, Fort area. In 1986 it developed the BSE
SENSEX index, giving the BSE a means to measure overall performance of the
exchange. In 2000 the BSE used this index to open its derivatives market, trading
SENSEX futures contracts. The development of SENSEX options along with equity
derivatives followed in 2001 and 2002, expanding the BSE's trading platform.

Historically an open outcry floor trading exchange, the Bombay Stock Exchange
switched to an electronic trading system in 1995. It took the exchange only fifty days to
make this transition. This automated, screen-based trading platform called BSE On-line
trading (BOLT) had a capacity of 8 million orders per day. The BSE has also introduced
the world's first centralized exchange-based internet trading system, BSEWEBx.co.into
enable investors anywhere in the world to trade on the BSE platform.

The launch of SENSEX in 1986 was later followed up in January 1989 by introduction of
BSE National Index (Base: 1983-84 = 100). It comprised 100 stocks listed at five major
stock exchanges in India - Mumbai, Calcutta, Delhi, Ahmedabadand Madras. The BSE
National Index was renamed BSE-100 Index from 14 October 1996 and since then, it is
being calculated taking into consideration only the prices of stocks listed at BSE. BSE
launched the dollar-linked version of BSE-100 index on 22 May 2006. BSE launched two
new index series on 27 May 1994: The 'BSE-200' and the 'DOLLEX-200'. BSE-500
Index and 5 sectoral indices were launched in 1999. In 2001, BSE launched BSE-PSU
Index, DOLLEX-30 and the country's first free-float based index - the BSE TECk Index.
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Over the years, BSE shifted all its indices to the free-float methodology (except BSE-
PSU index). BSE disseminates information on the Price-Earnings Ratio, the Price to
Book Value Ratio and the Dividend Yield Percentage on day-to-day basis of all its major
indices. The values of all BSE indices are updated on real time basis during market hours
and displayed through the BOLT system, BSE website and news wire agencies. All BSE
Indices are reviewed periodically by the BSE Index Committee. This Committee which
comprises eminent independent finance professionals frames the broad policy guidelines
for the development and maintenance of all BSE indices. The BSE Index Cell carries out
the day-to-day maintenance of all indices and conducts research on development of new
indices.

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 ROLE OF STOCK EXCHANGES

Stock exchanges have multiple roles in the economy. This may include the following:[4]

Raising capital for businesses

The Stock Exchange provide companies with the facility to raise capital for expansion
through selling shares to the investing public.

Common forms of capital raising

Besides the borrowing capacity provided to an individual or firm by the banking system,
in the form of credit or a loan, there are four common forms of capital raising used by
companies and entrepreneurs. Most of these available options, might be achieved,
directly or indirectly, involving a stock exchange.

Going public
Capital intensive companies, particularly high tech companies, always need to raise high
volumes of capital in their early stages. For this reason, the public market provided by the
stock exchanges has been one of the most important funding sources for many capital
intensive startups. After the 1990s and early-2000s hi-tech listed companies' boom and
bust in the world's major stock exchanges, it has been much more demanding for the
high-tech entrepreneur to take his/her company public, unless either the company already
has products in the market and is generating sales and earnings, or the company has
completed advanced promising clinical trials, earned potentially profitable patents or
conducted market research which demonstrated very positive outcomes. This is quite
different from the situation of the 1990s to early-2000s period, when a number of
companies (particularly Internet boom and biotechnology companies) went public in the
most prominent stock exchanges around the world, in the total absence of sales, earnings
and any well-documented promising outcome. Anyway, every year a number of
companies, including unknown highly speculative and financially unpredictable hi-tech
startups, are listed for the first time in all the major stock exchanges – there are even
specialized entry markets for this kind of companies orstock indexes tracking their

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performance (examples include the Alternext, CAC Small, SDAX,TecDAX, or most of
the third market companies).

Limited partnerships
A number of companies have also raised significant amounts of capital
through R&D limited partnerships. Tax law changes that were enacted in 1987 in the
United States changed the tax deductibility of investments in R&D limited partnerships.
In order for a partnership to be of interest to investors today, the cash on cash return must
be high enough to entice investors. As a result, R&D limited partnerships are not a viable
means of raising money for most companies, specially hi-tech startups.

Venture capital
A third usual source of capital for startup companies has been venture capital. This
source remains largely available today, but the maximum statistical amount that the
venture company firms in aggregate will invest in any one company is not limitless (it
was approximately $15 million in 2001 for a biotechnology company).[6] At those level,
venture capital firms typically become tapped-out because the financial risk to any one
partnership becomes too great.

Corporate partners
A fourth alternative source of cash for a private company is a corporate partner, usually
an established multinational company, which provides capital for the smaller company in
return for marketing rights, patent rights, or equity. Corporate partnerships have been
used successfully in a large number of cases.

Mobilizing savings for investment

When people draw their savings and invest in shares (through an IPO or the issuance of
new company shares of an already listed company), it usually leads to rational allocation
of resources because funds, which could have been consumed, or kept in
idle deposits with banks, are mobilized and redirected to help companies' management
boards finance their organizations. This may promote business activity with benefits for

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several economic sectors such as agriculture, commerce and industry, resulting in
stronger economic growth and higher productivity levels of firms. Sometimes it is very
difficult for the stock investor to determine whether or not the allocation of those funds is
in good faith and will be able to generate long-term company growth, without
examination of a company'sinternal auditing.

Facilitating company growth

Companies view acquisitions as an opportunity to expand product lines, increase
distribution channels, hedge against volatility, increase its market share, or acquire other
necessary businessassets. A takeover bid or a merger agreement through the stock
market is one of the simplest and most common ways for a company to grow by
acquisition or fusion.

Profit sharing
Both casual and professional stock investors, as large as institutional investors or as small
as an ordinary middle-class family, through dividends and stock price increases that may
result in capital gains, share in the wealth of profitable businesses. Unprofitable and
troubled businesses may result in capital losses for shareholders.

Corporate governance
By having a wide and varied scope of owners, companies generally tend to improve
management standards and efficiency to satisfy the demands of these shareholders, and
the more stringent rules for public corporations imposed by public stock exchanges and
the government. Consequently, it is alleged that public companies (companies that are
owned by shareholders who are members of the general public and trade shares on public
exchanges) tend to have better management records thanprivately held companies (those
companies where shares are not publicly traded, often owned by the company founders
and/or their families and heirs, or otherwise by a small group of investors).

Despite this claim, some well-documented cases are known where it is alleged that there
has been considerable slippage in corporate governance on the part of some public
companies. The dot-com bubble in the late 1990s, and the subprime mortgage crisis in

21
2007–08, are classical examples of corporate mismanagement. Companies
like Pets.com (2000), Enron
Corporation (2001), One.Tel(2001), Sunbeam (2001), Webvan (2001), Adelphia (2002),
MCI WorldCom (2002), Parmalat (2003),American International Group (2008), Bear
Stearns (2008), Lehman Brothers (2008), General Motors(2009) and Satyam Computer
Services (2009) were among the most widely scrutinized by the media.

However, when poor financial, ethical or managerial records are known by the stock
investors, the stock and the company tend to lose value. In the stock exchanges,
shareholders of underperforming firms are often penalized by significant share price
decline, and they tend as well to dismiss incompetent management teams.

Creating investment opportunities for small investors

As opposed to other businesses that require huge capital outlay, investing in shares is
open to both the large and small stock investors because a person buys the number of
shares they can afford. Therefore the Stock Exchange provides the opportunity for small
investors to own shares of the same companies as large investors.

Government capital-raising for development projects

Governments at various levels may decide to borrow money to finance infrastructure
projects such as sewage and water treatment works or housing estates by selling another
category of securitiesknown as bonds. These bonds can be raised through the Stock
Exchange whereby members of the public buy them, thus loaning money to the
government. The issuance of such bonds can obviate the need, in the short term, to
directly tax citizens to finance development—though by securing such bonds with the full
faith and credit of the government instead of with collateral, the government must
eventually tax citizens or otherwise raise additional funds to make any regular coupon
payments and refund the principal when the bonds mature.

Barometer of the economy

At the stock exchange, share prices rise and fall depending, largely, on economics forces.
Share prices tend to rise or remain stable when companies and the economy in general

22
show signs of stability and growth. An economic recession, depression, or financial
crisis could eventually lead to astock market crash. Therefore the movement of share
prices and in general of the stock indexes can be an indicator of the general trend in the
economy.

23
 INVESTMENT RELATED TO INVESTOR BEHAVIOUR

Investment is the employment of funds on assets with the aim of earning income or
capital appreciation. Investment has two attributes, namely, time and risk. In the process
of investment, the present consumption is sacrificed to get a return in the future. The
sacrifice that has to be borne is certain but the return in the future may be uncertain. The
attribute of investment indicates the risk factor. The risk is undertaken with a view to
reaping returns from investment. For the layperson, investment means a monetary
commitment. A person’s commitment to buy a flat or a house for his personal use may be
an investment from his point of view. This, however, cannot be considered as actual
investment because it involves sacrifice but does not yield any financial return.

To the economist, investment is the net addition made to the nation’s capital stock that
consists of goods and services that are used in the production process. A net addition to
the capital stock means an increase in buildings, equipment or inventories. These capital
stocks are used to produce other goods and services. Financial investment is the
allocation of money to assets that are expected to yield some gains over a period of time.
It is an exchange of financial claims such as stocks and bonds for money. They are
expected to yield returns and experience capital growth over the years.

Although research on the informal venture capital market has expanded in recent years
our current knowledge and understanding remains deficient in a number of respects. This
paper examines three aspects of the operation of the informal venture capital market
where information is either lacking or based on anecdotal or impressionistic evidence:
the investment process, the post-investment experience and the investment performance.
Information was obtained via telephone interviews with 31 business angels and with 28
owner-managers. In 20 cases information was available from both the entrepreneur and
the investor. The paper concludes that in most cases the informal venture capital process
has worked relatively well. There are few situations where the relationship
between investor and entrepreneur broke down. Nevertheless, the naivety and
inexperience exhibited by a minority of investors and entrepreneurs is striking. However,
there are significant and consistent expectation gaps between investors and entrepreneurs

24
in terms of the pricing of larger investments and the performance of the business.
Differences of opinion between investors and entrepreneurs concerning what constitutes a
favourable performance of the business may be a source of disputes in the future

Awards

 The World Council of Corporate Governance has awarded the Golden Peacock
Global CSR Award for BSE's initiatives in Corporate Social Responsibility (CSR).
 The Annual Reports and Accounts of BSE for the year ended 31 March 2006 and 31
March 2007 have been awarded the ICAI awards for excellence in financial
reporting.
 It has been cited as one of the world's best performing stock market by Reuters.
 The Human Resource Management at BSE has won the Asia - Pacific HRM awards
for its efforts in employer branding through talent management at work, health
management at work and excellence in HR through technology.Bombay Stock
Exchange - Finance Learners

25
LITERATURE REVIEW

26
 LITERATURE REVIEW

A survey of literature on studies related to investor behavior towards in stock market

specifically has been made to identify the current status of research on the topic. The
brief abstract of the studies have been given below.

SEBI (1998) concept of behavioral finance, it is presumed that information structure and
characteristics of capital market participants systematically influence their own decisions
as well as market outcomes. As the investor’s investment decisions in any one particular
market tend to rely more on their behaviour derived from psychological principles of
decision making, a better understanding of behavioural processes and outcomes is
important for financial planners. Further, identifying the factors that play an important
role in determining the behaviour of investors would affect the future policies and
strategies of the financial planners and market brokers as well as the government. Hence,
the present article is focused on exploring the factors influencing the behavior of
investors towards commodity market in India. This study, based on primary data, adopted
survey approach to measure the investors’ behavior. The sample respondents are
individual / retail investors selected randomly in Tricky district. Questionnaire
comprising a scale with 15 items for measuring the behavior were distributed and the
total number of respondents was 525. Cronbach alpha method was applied to check
reliability and validity of the collected data. The main components underlying the scale
that have greater influence on the investors’ behavior were ascertained by multivariate
analysis called Principal component method of Factor analysis with varimax rotation. The
descriptive analysis was also used to explore the degree of influence of main components
on the behavior of investors. The results of analysis exposed four major factors that have
greater influence on the behavior of investors, viz., low risk, informational asymmetry,
high return and objective knowledge.

27
R. Locke and Steven C. Mann, (2000), measured the degree of overconfidence in
judgment in the form of miscalibration and self- monitoring of 245 participants and also
observed their behavior in an experimental financial market under asymmetric
information. The miscalibrated traders are expected to be especially vulnerable to losses
by underestimating the conditional uncertainty about the asset value and the high self-
monitors are expected to behave strategically and achieve superior results. Their
empirical results showed that miscalibration would reduce and self monitoring would
enhance the trading performance. The effect of the psychological variables is strong for
men but it non-existent for women.

Sandor Czellar, (2003), focuses on to investigate whether the attitude accessibility

hypothesis or the alternative self-presentation hypothesis explains better the difference
between low and high self-monitors in response latency tasks. The investigation relied on
the methodological framework of the Implicit Association Test the basic idea of the
method is to compare response latencies between compatible and incompatible
combinations of attitude objects. Results indicated that the sample had positive
automatically activated associations about status, prestige brands, expensive products,
fame and wealth. At the explicit level, some of these categories were judged positively
while others negatively, but no differences were attributable to the participant’s self-
monitoring level.

Biais et al. (2004)examined the trades done by the professional traders and the data
provided by them proved in support for the existence of a disposition effect. The research
found that the majority of the professional traders hold losing trades longer. The research
has concluded that the relative aversion to loss realization was highly related to the
relative success of the professional trader in future.

Manish Mittal and R K Vyas, (2007), investigates how the investment choice is
affected by the demographics of the investors. The insight of how an investment choice
gets affected by the demographic variables helps the financial advisors to advise their
clients better. The clients, on being advised regarding the investments that suit their

28
profile, will not only rate such an advice high but will also appreciate it. Thus there will
be a certain improvement in the mutual trust between the advisor and his client.

Meenu Verma, (2008) aimed to investigate the effect of demographics and personality
type on investment choice. The results would help the people involved in the Wealth
Management process in advising their clients better regarding investments that are most
suitable according to their demographics and personality type. The study employed
primary data collection from 40 respondents through structured questionnaire. The
analysis of how an investment choice gets affected by the demographic variables and
personality profile could help the financial advisors to give better suggestions to their
clients. The investment preferences seem to be dynamic due to the changes in social,
economic and political atmosphere, as well as introduction of new investment avenues.

Manish Mittal, (2008) classified the Indian investors into different personality types and
explored the relationship between various demographic factors and the investment
personality exhibited by the investors. The results of this study supported the contention
that there are behavioural linkages to the choice of investments. The findings found to be
in consistent with the notion that individuals tend to act ‘normal’ rather than ‘rational’
when making investment decisions. The results of this study revealed that the Indian
investors can be classified into four dominant investment personalities casual, technical,
informed and cautious.

Mahendra (2008), work concluded that Tunisian stock market investors were not over-
confident. Majority of the population, 74% were found to be under-confident, very
sensitive, defiant and very much hesitant to the reaction and opinion of others. Tunisian
investors found to be very sensitive to rumours and suspected them to be private
information. From the paper it is evident that 85% of the investors tend to resume and
restrict voluntarily their data basis to some specific set of data. The Tunisian investors
judged that the market’s perception and enthusiasm degree showed towards the stock was
sufficient to decide about stock’s perspectives. 70% of the investors decided not to
persevere but to revise quickly their decisions and anticipations after any mistake so that
they can limit their potential losses.

29
Many Organizations and individuals conducted several studies on the various aspects of
the capital markets in the past. These studies were mainly related to various instruments
of capital market, shareholding pattern, new issue market and scope, market efficiency,
risk and return, performance and regulation of mutual funds. However, not much of
research was done on investment patterns and investor’s perceptions. Hence an attempt is
made to review some of the studies relevant to the topic in order to get into in depth
details of the chosen study.

Study revealed that most investors had affected based extra motivation to invest in stock,
over and beyond financial return expectations. Zaghlami (2009) study revealed that some
psychological particularities that are not expected by the financial behavioral literature,
the study was conducted on Tunisian investors.

Verma, (2008) study stated that irrational investment decision making is a widespread
phenomenon. They study the perils of irrational decision- making in investments choice
which finally can lead to great risk.

Commins (2009) identified the demographic profile and investor personality can be the
two determinants for making perception about the investor psychology, which if
scientifically studied could help the Wealth Management professionals to advice their
clients better.

Faten Zoghlami, Hamadi Matoussi, (2009) in their article discussed the hedonistic
psychology of investors. It cites that the pursuit of happiness becomes hedonistic when
people want to get the most of their investment and gaining wealth is no longer confining
that one becomes overly materialistic. The study conducted by SCMRD for Ministry of
Company affairs (2004) found that majority of the retail investors do not regard mutual
fund equity schemes as a superior investment compared to direct equity. Kent (19998)
developed a theory of securities market under- and overreactions based on two well-
known psychological biases: investor overconfidence about the precision of private
information; and biased self-attribution, which causes asymmetric shifts in investors'
confidence as a function of their investment outcomes.

30
Elankumaran and Anath (2013) survey revealed that Risk appetite, investment
objective of the investor,, income of the investor, funds available for investment, greatly
influences the behavior of the investor in corporate securities at various levels. The
Institute of company secretaries of India in its Investor Education series III entitled,

“Investment Decision making by a Lay Investor” explained the preconditions for

investment decision making, analysis and evaluating risks

31
 NEED OF THE STUDY

The foregoing literature review suggest that much research work has been conducted on
investment behavior in commodity at international level. However there are scant no. of
studies in context to investor behavior towards in stock market. This study aims
emphasizing on studying the objectives research on the experiences on the investor
behavior towards in stock market can go a long way in smooth functioning.

32
OBJECTIVES OF THE STUDY

33
 OBJECTIVES OF THE STUDY

1) To identify the objectives of investments of retail investors.

2) To identify the expected rate of return on investment.

3) To identify the strategies while investing in stock market.

4) To assess the time horizon of investment of retail investors.

34
RESEARCH METHODOLOGY

35
 RESEARCH METHODOLOGY

3.1 Scope of the study:- The study was conducted at jagadhri region.

3.2 RESEARCH DESIGN

Descriptive research design has been used to identify the behavior of investment of
investors.

3.3 SAMPLING DESIGN

Simple random sampling has been used.

3.4 DESIGN OF QUESTIONNAIRE

A structured questionnaire was framed by studying different literatures.

RELIABILITY

A pilot study was conducted from investor and the questionnaire reliability was checked
through spss cronbach alpha and after deleting some statements Alpha value was .78 or
78%

3.5 RELEVANCE

To be successful, questionnaire should be short and simple (Kothari, 1999). Questions

should proceed in a logical sequence moving from easy to more difficult ones. Technical
terms and expression with numerous interpretations should be avoided. Reliable and valid
instrument provides practitioners with a tool for self-assessment and continuous
improvement.

Questionnaire approval

The purpose of Questionnaire approvals:

I. To establish the most appropriate questions.

ii. To check whether the questions asked in the questionnaire are easy to understand
36
iii. To ascertain the effectiveness of the measuring instrument.

3.6 COLLECTION OF DATA

Data Collection helps the team to assess the health of the process. To do so, one must
identify the key quality characteristics one will measure. Data Collection enables a team
to formulate and test working assumptions about a process and develop information that
will lead to the improvement

of the key quality characteristics of the product or service. Data Collection improves the
decision-making by helping oneself focus on objective information about what is
happening in the process, rather than subjective opinions. Data collection has been done
through Primary Data, which was done by questionnaire with the investors.

RELIABILITY

A pilot study was conducted from investor and the questionnaire reliability was checked
through spss cronbach alpha and after deleting some statements Alpha value was .78 or
78%

37
DATA ANALYSIS &
INTERPRETATION

38
 DATA ANALYSIS & INTERPRETATION

Analysis of data is a process of inspecting, cleaning, transforming, and modeling data

with the goal of highlighting useful information, suggesting conclusions, and supporting
decision making.

Data analysis has multiple facets and approaches, encompassing diverse techniques under
a variety of names, in different business, science, and social science domains.

Q:-Sex (Male, Female)

TABLE 4.1
Gender Percentage
Male 76%
Female 24%
Total 100%

Chart 4.1

Sales
Male Female

24%

76%

Interpretation

Table 4.1 and chart 4.1 shows that 76 per cent are male and 24 per cent are
Females.

39
 Q:-What is your age? (In years)

TABLE4.2
Age Percentage
Below 30 18%
30-50 68%
Above 50 14%
Total 100

Below 30 30-50 Above 50

14% 18%

68%

Interpretation

Table 4.2 and chart 4.2 shows that 18% are below 30, 68% are 30-50 and 14%
are above 50

40
 Q:- Marital status?

Table4.3

Marital Status Percentage

Single 12%
Married 88%
Divorced 0%
Widowed 0%
Total 100%

Single Married Divorced Widowed

0% 0%

12%

88%

Interpretation

Table 4.3 and chart 4.3 shows that 12% are single, 88% are married, 0% are
divorced and 0% are widowed.

41
 Q:- What is your occupation?

Table 4.4

Occupation Percentage
Student 4%
Retired 13%
Self-employed 79%
Un-employed 4%
Total 100%

Student Retired Self-employed Un-employed

4% 4%
13%

79%

Interpretation

Table 4.4 and chart 4.4 shows that 4% are student, 13% are retired, 79% are
self-employed and 4% are un-employed.

42
 Q:-What is your average gross annual income?

Table4.5

Annual income Percentage

Below 0.5L 7%
0.5L-1L 2%
1L-3L 36%
Above 3L 55%
Total 100%

Below 0.5L 0.5L-1L 1L-3L Above 3L

2%
7%

36%
55%

Interpretation

Table 4.5 and chart 4.5 shows that 7% are below 0.5L, 2% are 0.5L-1L, 36%
are 1L-3L and 55% are above 3L

43
 Q:- How frequently do you monitor your investment?

Table4.6

Frequency Percentage

Daily 35%

Monthly 31%

Quarterly 15%

Bi-Annually 10%

Annually 9%

Total 100%

Daily Monthly Quarterly Bi-Annually Annually

9%

10%
35%

15%

31%

Interpretation

Table 4.6 and chart 4.6 shows that 35% are daily, 31% are monthly, 15% are
quarterly, 10% are bi-annually and 9% are annually.

44
Q:- What is the distribution of investment across different financial
instrument?

Table4.7

Investing area Percentage

Equity and Stock 32.60%

Debt Market 4.50%

Mutual Funds 9.55%

Insurance 11.95%
Real Estate 7.55%

Commodities 5.755%
Bank Fixed Deposits 13.20%

Post office MIS 14.90%

Total 100%

Equity and Stock Debt Market Mutual Funds

Insurance Real Estate Commodities
Bank FixedDeposits Post office MIS
2%2%5%1% 2%
1%
1%

86%

Interpretation

Table 4.7 and chart 4.7 shows that 32.60% are equity and stock, 4.50% are debt mkt.,
9.55% are mutual fund, 11.95% are insurance, 7.55% are real estate, 5.755% are
commodities, 13.20% are fixed deposits and 14.90% are post office MIS.
45
 Q:- What is the source of investment?
Table4.8

Sources of investment Percentage

Savings 52.20%

Inherited Amount 21.50%

Margin Financing 1.00%

Money Extracted From 20.05%

Business

Personal Borrowing 5.25%

Total 100%

Sources of investment Savings

Inherited Amount Margin Financing
Money Extracted From Business Personal Borrowing
8% 4% 3%
0%

85%

Interpretation

Table 4.8 and chart 4.8 shows that 52.20% are saving, 21.50% are inherited amount,
1.00% are margin financing, 20.05% are money extracted from business, 5.25% are
personal borrowing.

46
Q:-If you have incurred losses, according to you, what is your perception
for the loss, what is the responsible factor?

Table4.9

Perception for the losses Percentage

Incorrect Recommendation Or Advice 21%

From Broker/analyst/banker

incorrect Recommendation Or Advice 13%

From family/friends

The market has, in general, performed 46%

poorly

Committed errors 13%

Sheer bad luck 7%

Total 100%

Incorrect Recommendation Or Advice From Broker/analyst/banker

incorrect Recommendation Or Advice From family/friends
The market has, in general, performed poorly
Committed errors
Sheer bad luck
7%
13%
21%
13%
46%

Interpretation

Table 4.9 and chart 4.9 shows that 21% are Incorrect Recommendation Or
Advice From Broker/analyst/banker, 13% are incorrect Recommendation Or
Advice From family/friends, 46% are The market has, in general, performed
poorly, 13% are Committed errors, 7% are Sheer bad luck.

47
 Q:- If you have earned profits, to what you want attribute it to?

Table 4.10

Perception for the profits

Professional help 24%

Friends advice and support 11%

Bullish market 47%

Own knowledge 13%

Sheer good luck 5%

Total 100%

Professional help Friends advice and support

Bullish market Own knowledge
Sheer good luck
5%

13% 24%

11%
47%

Interpretation

Table 4.10 and chart 4.10 shows that 24% are Professional help 11% are
Friends advice and support 47% are Bullish market 13% are Own knowledge
5% are Sheer good luck.

48
4.3 TEST OF REGRESSION

Regression is the determination of a statistical relationship between two or more

variables. In simple regression, there are only two variables; one variable (defined as
independent) is the cause of the behavior of another one (defined as dependent variable).
Regression interprets what exists physically i.e. there must be a physical way in which
independent variable can affect dependent variable.

As the objective of this study is to identify and assess the effect of components on
Investor’s behavior, the method of multiple regression analysis has been chosen, as it
helps in assessing the individual and the combined effect of independent variables (ability
of investment decision, investor’s optimism, investor’s effort, risk appetite) on the
dependent variable (investor’s behavior).

TABLE 3: REGRESSION ANALYSIS OF INVESTOR’S

BEHAVIOR AND ITS FACTORS
Model R
R Square Adjusted R Std. Error of the
Square Estimate

1
.970(a) .941 .939 4.155

a Predictors: (Constant), Ability of investment decision., Risk appetite,

Investor’s optimism, Investor’s effort.

R2 = 0.939, that’s mean regression is 93.90% of the variance.

49
 TABLE 4: F TABLE ANALYSIS OF INVESTOR’S BEHAVIOR AND
ITS FACTORS

Model Sum of Df Mean

Squares Square F Sig.

4
1 Regression 26241.992 6560.498 379.983 .000(a)

Residual 1640.198 95 17.265

Total
27882.190 99

a Predictors: (Constant), Ability of investment decision., Risk appetite,

Investors optimism, Investors effort.

b Dependent Variable: Investor's Behavior.

50
 TABLE 5: COEFFICIENTS ANALYSIS OF INVESTOR’S BEHAVIOR AND ITS
FACTORS

Model Unstandardized Standardized

Coefficients Coefficients
T Sig.
B Std. Beta
error
1 (Constant) .219 2.201 .100 .921

Investors 1.155 .066 .514 17.606 .000

optimism
Investors effort .171 .114 3.789 .000
.649 .

.000
Risk appetite .097 .290
1.083 11.158

Ability of inv .067 .411 13.999 .000

decision .934

a Dependent Variable: Investor's Behavior.

In forward stepwise regression the algorithm adds one independent variable at a time –
which explains most of the variation in the dependent variable „Y‟. The next step is of
one more variable X2, then rechecking the model to see that both variables form a good
model. The process continues with addition of a third and more variables if it still adds up
to the explanation of „Y (Nargundkar, 2002). The steps used in conducting the regression
analysis on the above sample are as follows:

51
Y = A + B1X1 + B2 X2 + B3 X3+ B4X4…............ (1)
Y = dependent variable representing the Investor’s Behavior.
B1, B2, B3, and B4 are the coefficients of the regression equation
X1 = Investors optimism, X2 = Investors
effort, X3 =Risk appetite, X4 =
Ability of investment decision, A = Constant term.
From the above table we can analyze that the regression co-efficient (r) = 0.970 which
shows that the independent factors do have a significant impact on the Investor‟s
Behavior.

Investor‟s Behavior (Y) = 0.219 + 0.514 Investor‟s optimism + 0.114 Investor‟s effort+
0.290 Risk appetite + 0.411 Ability of investment
decision………………………………………(2)

Out of 4 independent variables (Investor’s optimism, Investor’s effort, Risk appetite,

Ability of investment decision) all the independent variables have an impact on Investor’s
Behavior quotient Y as shown in above equation.

52
RESULT & FINDINGS

53
 FINDINGS

 According to the data that have been collected among the recipients 76(76%) were male
and the rest 24(24%) were female, from this it can be seen that investing is mostly a

man‟s game although women are doing their investment in some way or another but they

are very less doing it through financial instruments.

 People like to invest in Stock market as compared to any other markets, even if they face
huge losses.
 Most of the people whose survey was done mostly were retired persons or the age group
between 35-50; this suggests that youth of India is unaware about investment
opportunities.
 According to the data that have been collected people give more preference to savings
and safety but at the same time they want higher interest at low risk in shorter span.
 According to the data that have been collected people are having less knowledge of
managing their income and assets.
 Most of the investors possess higher education like graduation and above.
 Most investors opt for two or more sources of information to make investment decisions.
 Most of the investors discuss with their family and friend before making an investment
decisions.
 Percentage of income that they invest depend on their annual income, more the income
more percentage of income they invest.
 The investor’s decisions are based on their own initiative.
 Most of the investors are financial illiterates.
 Increase in age decrease the risk tolerance level.
 Women are attracted towards investing gold than any other investment avenue.

54
SUGGESTIONS

55
 SUGGESTIONS
The introduction of the Internet has surprisingly changed our way of life as a society. It
has defined the way we do business and the way we correspond. The Internet has opened
many opportunities for stock market. The financial industry revolves around the internet.
Every thing is just a few clicks away. This makes stock market most convenient. But
there are still investors who prefer the old fashion way of offline trading and they mainly
prefer offline trading for security reasons.

Internet has introduced a way for consumers to manage their money online. Not to
mention, Internet has transformed the way investment companies operate their business
and has made it easy for private investors to gain straight access to a range of different
markets and online tools that were at one point only reserved by the use of investment
professionals. Consumer investing and online trading has dramatically changed over the
last decade. Online trading dynamically continues to be redefined. Services has expended
to include integrated management of additional financial accounts. Not to mention, it has
subsequently expanded in conjunction with ground breaking improvements to the
traditional trading interface, such as telephone interface systems.

56
CONCLUSION

57
 CONCLUSION

The awareness of investment knowledge, investment opportunities is quite high. These

people are helped by financial portals, financial news channels, financial newspapers;
various markets related T.V. shows, Expert talks, magazines. For Indian public money is
everything. So they are more sensitive about their money. They will think hundred times
before investing in any market and will expect more than that. They feel that they are
having enough money, time, resources and opportunities with them for investing. Though
they are having sound knowledge of financial market and economic condition of India
yet they lack the edge above the others as this field is very unpredictable and vast hence
they must be backed up by a financial planner.

Some of the recommendations are:

 Day trading is an addiction which can ultimately prove disastrous. Encouragement

should be given to invest in equity for the long term.
 We can encourage participation from household should own PSU shares so that
company will also get customer base and the margin will increase.
 We must put up some “financial literacy campaign” as many people are still unaware
of stock market and in India there is youth which is untapped.
 The communication should be increased and more personalized service should be given
to investors to earn trust and long run relationship.
 The company must also provide more value added services to investors.
 People give more importance to savings so as per their likings more opportunities
should be provided.
Many times it may happen that people land up in mess or huge losses due to not proper
information or guidance, and if they want to know where they are going? A financial
planner would do a world of good to them.

58
REFERENCES

59
 REFERENCES

1. V. L. Bajtelsmit and A. Bernasek “Why do women invest differently than men?”

Financial Counseling and Planning, vol. 7, 1996, pp. 1-10

2. H. K. Baker and J. A. Haslem, “The impact of investor socioeconomic characteristics

on risk and return preferences” Journal of Business Research, vol. 2, 1974, pp. 469-476.

3. R. A. Cohn, W. G. Lewellen, R. C. Lease, and G. G. Schlarbaum, “Individual financial

risk aversion and investment portfolio composition” Journal of Finance, vol. 30, 1975,
pp. 605-620.

4. D. Cooper and Schindler, Business research methods, Tata Mcgraw hill, New Delhi,
2007, pp. 138 -170.

5. R. J. Daitzman, M. Zuckerman, P. H. Sammelwitz, and V. Ganjam, “Sensation seeking

and gonadal hormones”, Journal of Biosocial Science, vol. 10, 1978, pp. 401–408.

6. P. Horvath, and M. Zuckerman, “Sensation seeking, risk appraisal, and risky

behavior”, Personality and Individual Differences, vol. 14, 1993, pp. 41–52.

7. C.R. Kothari, Research methodology: methods and techniques, Vishwa Prakashan,

New Delhi, 1999, pp. 21-151.

8. R. Nargundkar, Marketing Research: Text and Cases, Tata Mcgraw-Hill, New Delhi,
2002, pp. 31 – 215.

9. M. M. Wallach, and N. Kogan, “Aspects of judgment and decision making:

Interrelationships and changes with age” Behavioral Science, vol. 6, 1961, pp. 23-26.

10. W. Zikmund, “Business research methods”, Thomson Asia, 2005, pp. 29 - 75.

60
ANNEXURE

61
 QUESTIONNAIRE

1. Name: ________________________________________________________
2.Sex: Male Female
3.What is your age? (In years) :

<30 30-50 50+

4. Marital Status?

Single Married

Divorced Widowed

5. What is your occupation?

Student Retired

Self-employed Un-employed

 Salaried:

Yes No

 Salaried Individual (specify job title/designation)

_____________________________

6. What is your average gross annual income? (In Lakhs)

< 0.5L

0.5L-1L

1L-3L >3L

62
 7. What is the distribution of investment across different financial Instrument?
(In %)

Equity and Stock _______ Debt Market _______ Mutual Funds _______

Insurance _______

Real Estate ______

Commodities _____

Bank Fixed Deposits _______ Post office MIS _______

8. What is the source of investment? (In case of more than one source describe
their relative

proportions/percentages)

Savings _______ Inherited amount _______ Margin Financing _______

Money extracted from business _______ Personal Borrowing _______

9. How frequently do you monitor your investment?

Daily

Monthly

Quarterly

Bi-Annually

Annually

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10. If you have incurred losses, according to you, what is your perception for
the loss, what is the responsible factor? (Please tick)

a. Incorrect recommendations or advice from broker/analyst/banker

b. Incorrect recommendations or advice from family/friends

c. The market has, in general, performed poorly

d. Committed errors

e. Sheer Bad luck

11. If you have earned profits, to what you want attribute it to? (Please tick)

a. Professional help.

b. Friends advice and support

c. bullish market

d. own knowledge

e. sheer Good luck

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