ANALYSIS OF INVESTOR PREFERENCE WITH RESPECT

TO FINANCIAL INVESTMENT AND REAL INVESTMENT IN

THE STATE OF GOA

By
 Ashish Salvi
M.Com Part-1, Government College of Arts, Science and
Commerce, Quepem-Goa
Email: ashsalvi7745@gmail.com
Mob. No: 7745094423

 Narahari Gadekar
M.Com Part-1, Government College of Arts, Science and
Commerce, Quepem-Goa
Email: gadekarnarhari@gmail.com
Mob. No: 8552804365
 ANALYSIS OF INVESTOR PREFERENCE WITH RESPECT TO
FINANCIAL INVESTMENT AND REAL INVESTMENT IN THE
STATE OF GOA

*Ashish Salvi
**Narahari Gadekar
Abstract
An investment is a monetary asset purchased with the idea that the asset will provide income
in the future or will later be sold at a higher price for a profit. Investment is classified into
financial investment and real investment. Financial investments are investment in mutual fund,
fixed deposits, bonds, preference shares, debentures and equities. Real investments are
investment in real estate, gold, silver, precious stones, arts and paintings. The present study
explores the different avenues available for the investment and the investment pattern of the
investors. The study further explores the investor’s preference with respect to investment in
financial and real investment avenues. The study also explores the investors’ behavior towards
risk and return on the selected investment. The study relies on a sample of eighty respondents
surveyed in the state of Goa.

Keywords: Financial Investment; Real Investment; Investor Preference; Investment

Avenues; Goa

*M.Com Part-1, Government College of Arts, Science and Commerce, Quepem - Goa
** M.Com Part-1, Government College of Arts, Science and Commerce, Quepem - Goa
Introduction
Investment is the employment of funds on assets with the aim of earning income or capital
appreciation. In other words, Investment is the commitment of funds which have been saved
from current consumption with the hope that some benefits will be received in the future.
Saving of the individuals are invested in assets depending on their risk and return demands,
safety money, liquidity, the available avenue for investment, various financial institutions, etc.
For the achievement of above goals appropriate decisions have to be taken. Investment
avenues are the different ways that a person can invest his money. It also
called investment alternatives or investment schemes. The different methods that are available
to classify the investment avenues are financial investment and real investment. Financial
investment is the investment in mutual fund, fixed deposits, bonds, preference shares,
debentures and equities. Whereas real investment is the investment in physical goods such as
real estate, gold, silver, precious stones, arts and paintings.

The reasons for which a person invest.

(i) Financial security
People want to be financially secure and this is why they need to have extra money. They are
able to protect themselves financially against whatever financial hardship that might strike
them.

(ii) Financial independence

Your investment enables you to be independent and not rely on the money of others in any
event of financial hardship. It ensures that you have enough money to pay for your needs and
wants for the rest of your life without having to rely on someone else or having to work in your
old age.

(iii) Build your wealth

People invest with the view to build their wealth. This means that they save and then invest
their savings over time. In this process, the proceeds from the investments, whether they are
dividends or interest earned, can be reinvested into the same financial instrument or even
something else.

(iv) Attain your goals

Some people set specific goals in life and invest to achieve those goals. Your goals could be
short term, medium or long term in nature. Investing your money according to your goals will
enable you to grow your money and achieve your goals quickly without you having to work all
your life.

Literature Review
Following literature are surveyed for the purpose of the study and they are presented year wise
in an ascending order.

 G. Velmurugan, V. Selvam, N. Nazar (2015), conducted an empirical analysis on

perception of investors’ towards various investment avenues. The study concluded that,
investments done in various avenues with the expectation of capital appreciation and
short and long term earnings. In their study, all government, private, self-employed and
retired person invest so that they can utilize the surplus money in favorable plans so
that the money will be rolled back as well as it will give high returns.

 Roopadarshini S., Nagaraj A.M. (2015), studied the perception of investment and the
selection behavior of investors towards the mutual funds. The study concluded that
mutual fund investment are good source of returns for majority of the households and
it is particularly useful for the people who are at the age of retirement. Due to lack of
information about how mutual funds work, many investors hesitate to invest in mutual
funds and they are restricting themselves towards conventional options like gold, fix
deposits, etc.

 Neha Shukla (2016), conducted a research on investors’ preference towards

investment avenues with special reference to salaried personnel in the Gujarat region.
In her research, she concluded that when it comes to investment and pattern of
investment, various demographic factors have different effect on behavior of
respondent. Her research clearly states that both male and female irrespective of
education, have tendency to invest. Thought the amount may be different and
proportionate to their income. Her research also says that people tend to invest in fixed
deposits, post office scheme, gold and silver. Also friends, relatives and financial
advisors have greater impact over advices sought before investment.

 U.M.G. Krishna, A. Sultana, T.N. Reddy (2019), in his study on investors’ perception
towards investment avenues revealed that the investor’s preference reason in
Investment Avenue is depends upon the investment objective such as risk, return, safety
 and liquidity of the investment. Most of the investors enter into the share market for
returns and bond investors take risk and gains returns periodically. Risk aversion
investors like to invest in mutual fund Investment Avenue for future needs.

Identification of Research Problem

The above literature review brought to light the following research gap:
 Most of the studies on investors are done in the states other than Goa.
 The research is conducted on general investor behavior with regards to investment but
financial and real investment separately had been not considered.
 The research on satisfaction of the investors on the between the two investment avenue
has not been done.

Objectives of the Study

To explore the avenues available for the respondent.
To understand the investors behavior towards risk and return with respect to selected
Investment Avenue.
To analyse Investors preference with respect to selected financial investment and real
investment avenues.

Research Methodology
In order to study the above objectives, following research methodology has been planned and
executed.

Sample Size
For the purpose of the study, total 80 respondents have been studied.

Sample Selection
The study deals with the investor’s preference from Goa

Population
The universe: for the purpose of the study, Goa is considered as the population or universe.
Sources of Data
Primary Data
For the purpose of the study, questionnaire method has been considered as a source of primary
data considering 80 respondents.

Secondary Data
The secondary information required for the purpose of the study is gathered from books,
journals and internet.
Period of the Study
The period of the survey is considered as the period of the study that is the month of January
2020.

Significance of the Study

The present study highlights the investors’ preference with respect to financial investment and
real investment in the state of Goa. This study will be useful to understand an individual’s
investment pattern. Also the study can reveal the investment the different avenues available to
the investor.

Case Study Analysis

There are many investors who like to invest in many avenues if given opportunities. From the
study we came to know that most of the investors who invest are males as they are the acting
head of their family. However females are also keen to invest in some avenues. The reason
maybe because they are independent or have that sort of attitude towards investment. The most
active investors are between the age group of twenty to forty as they are income earning people.
Majority of the investors who invest, their income stands out to be between the marks of
twenty-five thousand to fifty thousand per month. The investors whom we gave questionnaire,
majority are having a qualification of Graduate degree and have the profession in service sector.
The majority of the respondents are from rural areas as the study was unable to get much of
urban investors due to limitation of time.

According to the study, almost all respondents are interested in some sort of investment, it may
be either fixed deposits, mutual funds, post deposits, etc. Majority of the investors prefer to
invest in financial avenue that is fix deposits with banks, mutual funds, shares, deposits in post
office, etc. However the option to invest in debenture, bonds, etc. are not available to the
investors, therefore people are unaware about it and the investors of debentures are unable to
locate. It has seen that, investors who invest in real avenues are also limited. The general
respondents doesn’t do much investment in real investments like land, gold, flat, paintings, etc.
This type of investment is mostly done by professionals.

The study found that the investors are investing in order to get better returns and for their capital
appreciation. As per investors, if the avenue give better safety, then they will invest even though
they may get low returns. From the study, it is found that all the investors follow general rule
of investment, that is, they only invest when they have excess money and the investments are
made whenever required. The amount that most of the investors typically invest are within the
range of 20,000 to 60,000 and the most preferred duration of the investment is more than two
years as it provide tax benefits and also give better returns.

Not all investors are aware about the risk and return, but majority of them are aware about the
risk and return on their investment. Majority of the investors wish to invest in the avenues with
high risk which will give them better returns. The investors has not faced any problems while
investing as most of them have invested in fixed deposits with bank.

Analysis of Satisfaction in Financial Investment

In order to test hypothesis for regression analysis has been done, where the dependent variable
is satisfaction of investors with regards to financial investment.
Total seven independent variables have been considered namely Convenience, Return,
Liquidity, Duration, Risk, Safety and Taxation
Regression Model: Satisfaction in Financial Investment
Test H01: The investors are satisfied with the investment they have made in financial
avenue.
Dependent Variable: Satisfaction in Financial Investment.
R square: .297 F value: 3.867 P value: .001
Independent Variable Beta Value T Value Sig. value
Constant 3.129 3.872 .000

Convenience .064 .547 .587

Return .184 1.080 .284

Liquidity .134 1.044 .300

Duration .122 1.043 .301

Risk -.041 -.393 .695

Safety .122 .845 .401

 Taxation -.066 -.604 .548

Though the model is significant but the independent variables are not significant.

Analysis of Satisfaction in Real Investment

In order to test hypothesis for regression analysis has been done, where the dependent variable
is satisfaction of investors with regards to financial investment.
Total seven independent variables have been considered namely Convenience, Return,
Liquidity, Duration, Risk, Safety and Taxation
Regression Model: Satisfaction in Real Investment
Test H02: The investors are satisfied with the investment they have made in real avenue.
Dependent Variable: Satisfaction in Real Investment.
R square: .269 F value: 2.574 P value: .024
Independent Variable Beta Value T Value Sig. value
Constant 5.633 4.844 .000

Convenience -.134 -.754 .454

Return .145 .662 .511

Liquidity .607 3.234 .002

Duration -.628 -2.733 .009

Risk -.021 -.164 .871

Safety .147 .799 .428

Taxation .050 .291 .772

The model is found to be significant wherein two out of seven independent variables
significantly explain the satisfaction of investors with regards to real investment. The
independent variable liquidity has a positive impact whereas duration of the investment has a
negative impact on the satisfaction of investors. This model is explained to the extent of 0.269.

Conclusion
As per our survey, out of 80 respondents 90% of the respondents are investing in financial
avenues whereas remaining 10% of respondents are investing in real avenues. We came to a
conclusion that around 70% of the respondents are not happy with the financial investments
due to many reasons such as convenience in investment, liquidity, less knowledge about how
to deal with the investments. On the other hand, investment in real avenues is less but still
people who invested are satisfied about it.

References:
Roopadarshini.S, Nagaraj A M, 2015, A Study On The Perception Of Investment And The
Selection Behavior Of Investors Towards The Mutual Funds, International Journal of scientific
research and management (IJSRM), Volume 3, Issue 10.

G. Velmurugan, V. Selvam, N. Abdul Nazar, 2015, An Empirical Analysis On Perception of

Investors’ Towards Various Investment Avenues, Mediterranean Journal of Social Sciences
MCSER Publishing, Rome-Italy, Vol 6 No 4.

U M Gopal Krishna, Aliya Sultana, T Naraya Reddy, 2019, Investors Perception towards
Investment Avenues, International Journal of Recent Technology and Engineering (IJRTE),
Volume-8, Issue-2.

Neha S Shukla, 2016, Investors’ Preference towards Investment Avenues with Special
Reference to Salaried Personnel in North Gujarat Region, IJSART, Volume 2, Issue 1.

https://www.grin.com/document/366702

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