International Journal of Commerce (IJC) ISSN: 2394-9597

A SURVEY ON INVESTORS FAVOURITE INVESTMENT AVENUES

IN SALEM
*J. Priyadharshini
**M. Selladurai
*Head, Department of Commerce, AVS College of Arts & Science, Salem.
**Assistant Professor, Dept. of Commerce, AVS College of Arts & Science, Salem.

Abstract
An investor has different investment avenues to park his/her hard earned savings. Investment is the current
commitment of money or other resources in the expectation of repairing future benefit. Investment is an economic action.
This involves creation of assts or exchange of assets with profit motive. This survey analyse the investors favourite
investments avenues and also analyse the before making investment decisions. Because sometimes fear and greed while
making investment decisions play a vital role while making their investment decisions. The survey has been conducted
among 350 investors in different parts of Salem. The collected data have been analysed with the help of chi-square test and
percentages.
Keywords: investment, investment avenues, investment decisions, investors behaviour.

Investment
Investment is the current commitment of money or other resources in the expectation of repairing
future benefit. Investment is an economic activity. This involves creation of assts or exchange of assets
with profit motive. It is the employment of funds with the purpose of earning additional income or
growth in value. The person making investment has to part with his funds. Investment is the
employment of funds with the aim of achieving additional income or growth value. Investment involves
long-term commitment; Investment is the allocation of monetary resources to assets that are expected to
yield some gain or positive return over a given period of time.

REVIEW OF LITERATURE
Karthikeyan B (2001) in his thesis titled Small Investors Perception on Post Office Small
Savings Schemes has made an attempt to assess the level of awareness among the small investors in
urban area and semi-urban areas. An attempt has also been made by him to elicit the perceived opinion
of the small investors on the post office small savings schemes. According to the author necessity of life
and tax benefits play a vital role in motivating the small investors in urban and semi-urban areas to invest
in post office small savings schemes.
Parul Mittal and Sandeep Aggarwal (2012) have conducted a study under the title Investment
in Financial Products: What Motivate the Investor? A Study in Jaipur the chief objective of the study is
to make generalization of consumers behaviour towards the investment of money. According to the
authors mens preferred investment destination is stock market (31%) and second alternate choice is
commodity market (22%), while more than 60% of men do not like to invest money in real estate and
government bonds. The authors have also found that Men invest more than women. The authors have
also stated that 83% of professional people invest money in market. The authors have recommended that
special schemes should be offered for the customer based on their occupation type like for businessman,
service people, and other classes.
Geetha N and Ramesh M (2011) in their article have made an attempt to study peoples choice in
investment avenues of Kurumbalur under the title A Study on Peoples Preferences in Investment
Behaviour the authors have found that 59.5 per cent of respondents investment decision depends on
return and protection of investment. 22.7 percent and 19.3 percent of respondents investment decision is
influenced by liquidity and risk performance respectively. The authors have concluded that in
Kurumbalur respondents are more aware about various investment avenues like insurance, PPF, bank
deposits, small savings like post office savings etc. The authors have concluded that awareness program
has to be conducted by stock brokering firms because most of the respondents are unaware of this new
service and stock market.

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International Journal of Commerce (IJC) ISSN: 2394-9597

Sanjay kantidas (2011) in this article titled An Empirical Analysis on Preferred Investment
Avenues among Rural and Semi-Urban House Holds has conducted a study to identify the investment
habits of the households in Nagaon Districts of Assam. The author has stated in the article that
respondents belonging to the age group of 40-50 years show keen interest in investing in insurance
products (54.55%) and the next choice goes in favour of investing in stock market (21.21%) followed by
investment in banks and financial institutions (15.15%). Investment in property scored the lowest
amongst all age group of the sample under the study. The author has further stated that ULIP (Unit Liked
Insurance Policy) is the most popular insurance product for short term insurance investment followed by
banks, share market and mutual fund. The long term investment interest goes in favour of insurance
products followed by share market and banks. The author has concluded by saying that higher income
group shows relatively high preference towards investment in share market, conversely lower and
average income group shows keen preference towards insurance and banks as the most preferred
investment avenues.

Objectives of the study

The specific objective of this survey is to examine the investors favourite investment avenues.
However the study has the following specific objectives.
To know the factors on the investors favourite investment avenues in Salem
To analyse the behaviour of investors in Salem while selecting their investment avenues.

Hypotheses of the study

HO: Investment decisions are not affected by gender of the respondents.
HO: Interval in making investments is not affected by occupational status.
HO: Fear and greed while making investment decisions is not affected by
annual income of respondents.

Research Methodology
The study has been conducted among 350 investors in different parts of Salem. The sample
investors were selected by adopting convenience sampling method. Primary data relating to the study
were collected by using questionnaire method. The questionnaire contains two parts. First part contains
the questions which are related to demographic variables were included. The questions of second part are
related to investment behaviour the collected data have been analysed with the help of SPSS package.
Chi-square test and percentages have been used to analyse the collected data. Chi-square test has been
used to analyse the significant relationship between certain demographic variables and investment
behaviour variables.

Data Analysis
The demographic profile of the individual investors in Salem is explained in the following
paragraphs.
Table 1: Demographic Profile
Sl. No Particulars Choices No. of the Investors Percentage
Male 247 70.6%
1 Gender Female 103 29.4%
Total 350 100%
Less than 20 28 8.0%

Age 21-30 136 39.0%

2
(in years) 31-40 114 32.5%
41-50 56 15.9%

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International Journal of Commerce (IJC) ISSN: 2394-9597

Above 51 16 4.6%
Total 350 100%
Uneducated 58 16.6%
Primary school 90 25.7%
High school/H.S.C 82 23.4%
Educational
3 Degree 50 14.3%
Qualification
PG Degree 57 16.3%
Diploma/ITI/Others 13 3.7%
Total 350 100%

Farmer 102 29.1%

House Wife 31 8.9%

Employed 129 36.9%
Occupational Businessman 48 13.7%
4
Status
Professional 16 4.6%
Retired 11 3.1%
Others 13 3.7%
Total 350 100%

Below 1,00,000 125 35.7%

1,00,001 - 1,50,000 126 36.1%

Annual Income
5
(in Rs.) 1,50,001 - 2,00,000 53 15.1%
Above Rs.2,00,001 46 13.1%
Total 350 100%

Source: Primary data

The above Table shows the gender classification of the respondents. Out of the 350 respondents
70.6% of the investors belong to male and the remaining belongs to female category.
The above Table shows that out of the total 350 sample respondents 39% of the respondents are
in the age group of 21-30 years, 32.5% of the respondents are in the age group of 31-40 years, 15.9% of the
respondents are in the age group of 41-50 years, 8% of the respondents are in the age group of less than 20
years and 4.6% of the respondents are in the age group of above 51 years. Hence it is concluded that a
considerable percentage of sample respondents are in the age group of 21-30 years.
The above Table reveals that out of the 350 sample respondents, 25.7% of the respondents are
having primary level of education, 23.4% of the respondents fall in the category of High
school/H.S.C,16.6% of the respondents are uneducated. 16.3% of the respondents are post graduates,
14.3% of the respondents are under graduates and 3.7% of the respondents fall in others category which
includes ITI, Certificate Courses and Diploma. It may be concluded that around 26% of the individual
investors in Salem are having school level education only.
The above Table indicates the occupational status of the individual investors in Salem out of the
350 sample respondents, 36.9% of the respondents are employees, 29.1% of the respondents are farmers,

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13.7% of the respondents are businessmen, 8.9% of the respondents are homemakers, 4.6% of the
respondents are professionals, 3.7% of the respondents belong to Others category and 3.1% of the
respondents fall under Retired category. Hence it may be concluded that a considerable number of
respondents (129) are employees.
It is revealed from the above that out of the 350 sample respondents 36.1% of the respondents fall
in the annual income group of 1,00,001 to 1,50,000, 35.7% of the respondents fall in the annual income
group of below 1,00,000, 15.1% of the respondents fall in the annual income group of 1,50,001 to 2,00,000,
13.1% of the respondents fall in the annual income group of above Rs.2,00,001, it may be concluded that
around 72% of the respondents fall in the annual income category of less than Rs.1,50,000.

Table 2: Investors Favourite Investment Avenues

Sl. No Investment Avenues Present Investment
1 Post Office Small Savings Schemes 183 (52.3)
2 Bank Deposits 303 (86.6)
3 Company Deposits 29 (8.3)
4 Chit Fund 83 (23.7)
5 Life Insurance Policies 184 (52.6)
6 Mutual Fund 39 (11.1)
7 Corporate Securities (Shares/ Debentures/ Bonds) 31 (8.9)
8 Government Bonds 35 (10.0)
9 Bullion (Gold/ Silver) 272 (77.7)
10 Real Estate 105 (30.0)

Source: Primary data

From the above Table it is crystal clear that out of the 350 investors in Salem 86.6% have invested
in Bank deposits, 77.7% have invested their hard earned savings in Bullion (Gold/Silver), 52.6% have
preferred Life Insurance Policies, 52.3% have deposited their money in the Post Office small savings
schemes, 30% have invested in Real Estates, 23.7% have preferred Chit Funds, 11.1% have preferred
Mutual Funds, 10% have opted for Government bonds and 8.9% have purchased Corporate Securities
which include Shares, Debentures and Bonds. 8.3% have invested in Company Deposits at present.

Table 3: Investment Decision Based On Gender of the Respondents

Investors Investment Decision
Gender of the Respondents Brokers/ Peer group/
On my Family
Investment Friends/ Total
own members
Consultants Relatives
Male 68 27 99 53 247
Female 23 4 47 29 103
Total 91 31 146 82 350

Chi-Square Tests
Value Df Asymp. Sig. (2-sided)
Pearson Chi-Square 6.761a 3 0.080
Likelihood Ratio 7.416 3 0.060
Linear-by-Linear Association 3.456 1 0.063
No of Valid Cases 350

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a. 0 cells (0.0%) have expected count less than 5. The minimum expected count is 9.12.Since the
calculated value of chi-square (6.76) is more than the table at 5% level of significance, hence we reject
hypotheses.

Table 4: Interval Make Investment Based On Occupational Status

At what interval do you make investment?
Occupational
Half-
Status Weekly Monthly Quarterly Annually Total
Yearly
Farmer 7 29 24 14 28 102
House Wife 3 10 8 1 9 31
Employed 3 52 33 11 30 129
Businessman 4 14 12 12 6 48
Professional 0 11 5 0 0 16
Retired 0 0 2 9 0 11
Others 4 3 3 1 2 13
Total 21 119 87 48 75 350

Chi-Square Tests
Value Df Asymp. Sig. (2-sided)
Pearson Chi-Square 92.114a 24 0.000
Likelihood Ratio 79.039 24 0.000
Linear-by-Linear Association 3.353 1 0.067
No of Valid Cases 350

a. 17 cells (48.6%) have expected count less than 5. The minimum expected count is 0.66. Since the
calculated value of chi-square (92.11) is more than the table at 5% level of significance, hence we reject
hypotheses.

Table 5: Fear & Greed while making Investment Decisions based on Income
Annual Income Are you influenced by Fear & Greed while making Investment Decisions
(in Rs.) Very often Rarely Never No idea Total
Below 1,00,000 17 55 37 16 125
1,00,001 - 1,50,000 11 49 54 12 126
1,50,001 - 2,00,000 4 24 18 7 53
Above Rs.2,00,000 7 16 15 8 46
Total 39 144 124 43 350

Value Df Asymp. Sig. (2-sided)

Pearson Chi-Square 8.831a 9 0.453
Likelihood Ratio 8.767 9 0.459
Linear-by-Linear Association .779 1 0.378
No of Valid Cases 350

a. 0 cells (0.0%) have expected count less than 5. The minimum expected count is 5.13. Since the
calculated value of chi-square (8.81) is more than the table at 5% level of significance, hence we reject
hypotheses.

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Findings:
70.6% of the investors belong to male category and the remaining belongs to female category.
39% of the investors in the age group of 21-30 years.
26% of the investors in this district are having primary school level education only.
Around 40% respondents of investors (258) are employees.
Around 72% of the respondents fall in the annual income category of less than Rs.1, 50,000.
Majority of the investors have present investment 86.6% have invested in Bank deposits, 77.7% have
invested their hard earned savings in Bullion (Gold/Silver), 52.6% have preferred Life Insurance
Policies, 52.3% have deposited their money in Post Office small saving schemes.
Investment decision are not affected by gender of the respondents
Interval in making investment is not affected by occupational of the respondents.
Fear & Greed while making investment decisions are not affected by Income.

Conclusion:
In this survey, the respondents above 50% of investors preferred the investment avenues are
Bank deposits, Bullion, Life Insurance policies & Post Office small savings schemes. The survey also
confirms that investors in the sample area carefully consider all available informations before making
investment decision. Since the sample respondent investors belong to semi-urban and rural areas there is
no wonder in the behaviour of the respondents investors in preferring the investments in the order of
priority.

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