Investment Patterns of Individual Stock Investors: An Empirical Analysis of Punjab

Abstract

The article is an exploratory attempt to analyse investment pattern of individual stock investors of Punjab. For the purpose, the preferences for various financial products, factors influencing such preferences, time spent on monitoring investments and the sources of information chased by them before investing are gauged. An in-depth analysis is carried out to find out whether demographic variables, that is, age, gender and income, exert a significant impact on the choice of various investment avenues. A pre-tested, well-structured questionnaire was administered personally to 250 individual stock investors in Punjab and their responses were sought for further analysis. The responses have been analysed in terms of frequencies, percentages and weighted average scores and factor analytic techniques. Bank fixed deposits have been found as first preference followed by gold as the second preference and then stocks as the third preference. The results of the factor analysis revealed four factors, that is, projected benefits, personal financial need, taxation benefits and security needs. Internet, Investment advisors and family-member recommendations are their most preferred sources of information. Large numbers of investors have been found monitoring their investments monthly. The current research will be helpful for financial service providers in understanding the investment preferences of individual stock investors and tracking the factors that influence individual investors to invest and suggesting investment options to them as per their needs.