Abstract
Investor’s behavior is influenced by many factors during investment decision making. Demographic profile of investors is also one of the decision influencing factor among others.The aim of this paper is to examine the effect of demographic factors on investor’s level of risk tolerance regarding the choice of investment. 670 investors Pune City, Maharashtra State, India were selected as sample. ANOVA, Mann Whiteny ‘U’ test, Kruskal- Wallis test were used to explore the effect of demographic factors on investor’s level of risk tolerance regarding the choice of investment. Result of the paper showed that demographic factors of investors such as Age, Educational qualification, Income level, effect the investor’s level of risk tolerance. These results are important for managers to advise their clients about better area of investment and risk level according to their demographic profile.
Highlights
IntroductionFinance investment is putting money into something with the expectation of gain that upon thorough analysis has a high degree of security for the principle amount, as well as security of return, within an expected period of time
Investment has different meaning in the context of finance and economics
Investments made for a period of one to three years are termed as short-term investments and that are invested for more than three years are termed as long-term investments
Summary
Finance investment is putting money into something with the expectation of gain that upon thorough analysis has a high degree of security for the principle amount, as well as security of return, within an expected period of time. Putting money into something with an expectation of gain without making thorough analysis is speculation or gambling. Finance Investment involves decision making process in order to ensure security of both the principle amount and the return on investment (ROI) within an expected period of time. The two main classes of investments are i) Fixed Income Investment such as bonds, fixed deposits, preference shares and ii) Variable Income Investment such as business ownership (equities) or. Investments made for a period of one to three years are termed as short-term investments and that are invested for more than three years are termed as long-term investments. Almost everyone holding some portfolio of investment in the form of financial assets like bank deposits, bonds, stocks and so on; and real assets like motorcycle, house, gold etc
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