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1
Chadha, Mansi. "Cognitive Biases Impact on Investor’s Investment Decision of Retail Mutual Fund Investor." European Economic Letters (EEL) 14, no. 1 (March 1, 2024): 1989–2002. http://dx.doi.org/10.52783/eel.v14i1.1131.
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The purpose of this research is to study the effect of Cognitive bias on Investor’s investment decision of Retail Mutual Fund Investor.
Methodology Adopted:Structured questionnaire was distributed to 1012 Indian mutual fund investors of four states considered financial hubs of India (Delhi/NCR, Mumbai, Bangalore, and Kolkata). Multiple regressions were used to test the model. Validity of instrument was established through CFA.
Findings: Cognitive Bias (Overconfidence, over-reaction, Herd Effect and Regret Aversion) significant with investor’s investment decision making.
Research Implications:Results are significant on Indian investors but with different geographic results might different.
Originality/ Value: Academic research is still needed to understand the impact of mutual fund investors' cognitive biases on their investment decisions, Biases studied on Equity investors in south India, due to inconsistency in literature the work found to be original.
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Suruchi Sharma. "Investment Avenues Choices of Indian Retail Investors: An Empirical Investigation." TEST Engineering & Management 82 (January 1, 2020): 17968–74. http://dx.doi.org/10.52783/testmagzine.v82.14574.
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This study looks into investor behavior to identify the finest investment possibilities in India. The goal of the investment portfolio is to help investors choose a portfolio of investments that will allow them to reach their financial goals within a given time frame. Investing can lead to more significant economic growth and prosperity by boosting individual wealth. Companies that can raise funds through financial markets benefit from the investing process. Some investments kinds offer additional advantages to the investor, the company, and society. The ideas of portfolio holdings, risk, and investment growth are familiar to Indian investors. The investment's guiding principle is "Prevention is better than Cure," which is predicted to result in higher earnings but lower risk. This essay will make the pertinent discovery that retail investors behave differently regarding financial investments. However, it will also highlight how their preferences for investment options regarding receiving a return on the invested amount vary depending on their knowledge and awareness of those options. The researcher had considered Indian retail investors know different investment avenues choices of Indian retail investors and found that investors choose recurring deposits, life insurance policies, and certificates of deposit with financial institutions and banks, Most Indians limit their investing options to risk-free ones like bank accounts and Individual investors continue to select investments with predictable returns and physical assets.
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Sreekumar Nair, Abhilash, and Rani Ladha. "Determinants of non-economic investment goals among Indian investors." Corporate Governance 14, no. 5 (September 30, 2014): 714–27. http://dx.doi.org/10.1108/cg-09-2014-0102.
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Purpose – The purpose of this paper is to identify underlying characteristics of Indian investors that influence them to achieve their non-economic investment goals. Design/methodology/approach – The conceptual model posits that investors’ choice of non-economic goal (NEG) is determined by their values and beliefs which are measured through survey data collected from 342 respondents with prior experience of investing in the stock market. A structural equation model is specified to estimate the measurement model. Further, the study analyses the mediating effect of social investment efficacy on the impact of investors’ values and beliefs and their pursuit of non-economic investment goals. Findings – Religiosity and the belief that one’s actions can bring about a change in the society are the two important determinants of Indian investors’ pursuit of non-economic investment goal. Research limitations/implications – The model ignores aspects of an investor’s financial stability that may influence the urge to pursue non-economic investment goals. Practical implications – Socially responsible (SR) funds with investment filters designed to propagate religious values of Indian investors can be designed. As a result, it should be possible to channelize a part of the more than $15 billion available in different religious institutions across the country into the capital market. Social implications – Availability of SRI funds would provide investors with yet another avenue invest in companies that conform to their protected values. Originality/value – This is the first study that attempts to study investor characteristics (values and beliefs) and its impact on investor’s NEG in the Indian context.
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P.H., Haritha, and Rashmi Uchil. "Influence of investor sentiment and its antecedent on investment decision-making using partial least square technique." Management Research Review 43, no. 11 (June 10, 2020): 1441–59. http://dx.doi.org/10.1108/mrr-06-2019-0254.
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Purpose The purpose of this paper is to determine whether individual investor sentiment and its factors influence investment decision-making behavior in the Indian stock market. The study contributes to the novel conceptual framework that integrates the impact of investor sentiment and outlines the role of its factors (herding, media factor, advocate recommendation and social interaction) during the investment decision-making process. Design/methodology/approach In this paper, data were collected using a structured questionnaire survey from Indian individual investors. It uses self-reported sources of information collected via a survey of individual investors and estimated the linkage via path modeling. The collected data were analyzed using partial least square structural equation modeling to examine the relationship between the construct, namely, herding, media, advocate recommendation and social interaction with investor sentiment and investment decision-making. Findings The study shows that herding, media factor, advocate recommendation and social interaction significantly and positively influence the investor sentiment. Among all the factors, social interaction has the lowest influence on investor sentiment. The study also reveals that investor sentiment has a positive impact on investment decision-making. Practical implications The study provides valuable insights for the individual investors, financial advisors, policymakers and other stakeholders. Knowledge of behavioral finance would enhance the decision-making capabilities of individual investors in the stock market. Thus, the study calls for the need to increase awareness among Indian investors about behavioral finance and its usefulness in investment decision-making. The paper also sheds light upon the influence of investor sentiment and its antecedents on investment decision-making. The study confirms that the investor relies on their sentiment while making investment decisions. Hence, the stakeholders in the stock market should focus on investor sentiment and other psychological aspects of individual investors as well. Originality/value There are very few studies that deal with the behavioral aspects of individual investors in an emerging market context. The study mainly focuses on the antecedent of investor sentiment and its influence on investment decision-making in the Indian stock market. To the best of authors’ knowledge, the present study unique nature that examines the impact of the antecedent of investor sentiment which was not explored in the Indian context and investment decision-making of individual investors.
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Chandy, Jacob. "Index Returns and Institutional Trading." Shanlax International Journal of Management 9, S1-Feb (February 25, 2022): 218–25. http://dx.doi.org/10.34293/management.v9is1.4863.
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It is acknowledged that only 2% of the Indian public invest in stock markets. This compares with 55% in the USA and about 25% in the EU. The Indian public is therefore a miniscule proportion of investors and the power of the Indian public to move markets is negligible.This means that most trading activity in Indian stock markets are by institutional investors consisting of Foreign Institutional Investors (FIIs) and Domestic Institutional Investors (DIIs). It seems reasonable to hypothesize that their trading activities influence market returns. This paper aims to verify whether this hypothesis can be sustained by analyzing historical data and calculating statistics such as correlations, regression coefficients and coefficients of determination between FII and DII trading activity and Nifty 500 returns. The key aspects that have been evaluated are buying and selling by these institutional investors. Buy/sell ratios of these institutional investors have also been evaluated since buy/sell ratios are a proxy indicator that indicates the strength of bullishness by these institutional investors.A similar analysis also been done on Mutual Fund trading activity although mutual fund trading activity is normally subsumed under DII trading activity. Since it can be assumed that Mutual Fund trading arises mostly from the ebb and flow of funds from the investing public, they are an important indicator of general public sentiment.Some significant unexpected results have been obtained as the result of the analysis. For example, it has been found that Domestic Institutional Investor buying has negative impact on Nifty 500 return. This is unexpected since it would normally be assumed that an increase in buying by an important constituency such as Domestic Institutional Investor would likely increase Nifty 500 returns on average.
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Kaur, Inderjit. "Mutual fund investor’s behaviour towards information search and selection criteria." Qualitative Research in Financial Markets 10, no. 4 (November 5, 2018): 395–414. http://dx.doi.org/10.1108/qrfm-09-2017-0084.
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PurposeThe fund selection process of investors in a mutual fund needs to be understood for designing better marketing strategies. Knowledge and perception about the mutual funds can affect investor’s behaviour towards information search and selection criteria during the decision process. Therefore, this study aims to examine Indian mutual fund investors under the framework of Theory of Planned Behaviour and consumer’s behaviour model.Design/methodology/approachThe data have been collected from mutual fund investors in the National Capital Region–Delhi, India, through structured questionnaire. The collected data were examined with relevant statistical tools.FindingsKnowledge and perception affect information search behaviour of the investor. Investors having better knowledge of mutual funds access impersonal sources of information and performance of fund affects their choice, whereas investors having lesser knowledge of mutual fund take advice of experts and select funds based on fund characteristics. Investors with better return perception for mutual funds ignore performance as selection criteria, whereas investors having poor risk perception tend to reduce their bias by accessing personal sources of information. Education and income of investor affect knowledge and perception of mutual funds.Practical implicationsThe financial advisor-driven investors ignore performance as selection criteria and could lead to dissatisfaction later. Therefore, to make the industry investor driven, mutual funds need to focus on improving the knowledge of investors.Originality/valueThis paper shows the unique effect of knowledge and perception on information search behaviour of investors towards mutual funds. The knowledgeable investor selects mutual funds by understanding all risks and benefits.
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K., Riyazahmed. "Investment motives and preferences – An empirical inquiry during COVID-19." Investment Management and Financial Innovations 18, no. 2 (April 9, 2021): 1–11. http://dx.doi.org/10.21511/imfi.18(2).2021.01.
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Following the COVID-19 breakout, investment in shares, mutual funds, and life insurance are witnessing a growing trend in India. Hence, examining the determinants of investor preferences is necessary to maintain a positive trend. This study analyzes the impact of investor motives and awareness on investor preferences using the data collected from 753 Indian investors in 2020. Factor analysis grouped the investment motives into six categories, namely Nature of investments, Future financial needs, Investor personal characteristics, Safety and stability of investments, Investor behavioral aspects, and Investor’s options. The regression model used to find the impact of the investment motives and the awareness on the investor preferences explains 52.3% of changes in investor preference. Investment factors like Nature of investments, Investor personal characteristics, Investor behavior, Investor options, Awareness of mutual funds, and shares have a significant impact on investor preferences. Further, the awareness level of mutual funds and the stock market are the major variables contributing to Investors’ preference rather than identified investment factors. Investors’ personal characteristics like knowledge, confidence, ability, responsibility, and belief negatively influence investor preferences. This study adds to the existing literature by analyzing investment motives and preferences during the pandemic.
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Bernard, Martin, and Malabika Deo. "Are Indian Investors Return Chasers? An Anatomy of their Trading Behavior." GIS Business 11, no. 3 (May 27, 2016): 32–44. http://dx.doi.org/10.26643/gis.v11i3.3435.
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Momentum has remained an unanswered anomaly in finance literature. Researchers have pointed out two arguments, whether the source of prior return anomalies are rational or behavioral. In this paper, we examined return chasing tendency investors and the profitability of probable price momentum strategy in Indian equity market using the monthly return data of equities represented in BSE-500 index encompassing the time period from July 2004 to Jun 2014. Study is an attempt to analyze momentum effect before, during and after the financial crisis of 2007–2009 to check whether investors continue to follow the same strategy during crisis or their behavior undergoes any change. Also study examined the adequacy of rational CAPM models to explain momentum profits. The result evidenced a strong presence of economically and statistically significant momentum profit in Indian stock market equity returns. Therefore return chasing tendency of Indian investors is found to be persistent in the intermediate horizon in Indian context. Closer observation of the results reveals that, Indian investors are winners chasers rather than investor in past losers. Study also confirmed that investors sentiments are volatile according to general market environment and inadequacy of rationalist equilibrium model to explain momentum profits.
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Bernard, Martin, and Malabika Deo. "Are Indian Investors Return Chasers? An Anatomy of their Trading Behavior." GIS Business 11, no. 4 (July 9, 2016): 32–44. http://dx.doi.org/10.26643/gis.v11i4.3430.
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Momentum has remained an unanswered anomaly in finance literature. Researchers have pointed out two arguments, whether the source of prior return anomalies are rational or behavioral. In this paper, we examined return chasing tendency investors and the profitability of probable price momentum strategy in Indian equity market using the monthly return data of equities represented in BSE-500 index encompassing the time period from July 2004 to Jun 2014. Study is an attempt to analyze momentum effect before, during and after the financial crisis of 2007–2009 to check whether investors continue to follow the same strategy during crisis or their behavior undergoes any change. Also study examined the adequacy of rational CAPM models to explain momentum profits. The result evidenced a strong presence of economically and statistically significant momentum profit in Indian stock market equity returns. Therefore return chasing tendency of Indian investors is found to be persistent in the intermediate horizon in Indian context. Closer observation of the results reveals that, Indian investors are winners chasers rather than investor in past losers. Study also confirmed that investors sentiments are volatile according to general market environment and inadequacy of rationalist equilibrium model to explain momentum profits.
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Bernard, Martin, and Malabika Deo. "Are Indian Investors Return Chasers? An Anatomy of their Trading Behavior." GIS Business 12, no. 1 (February 5, 2017): 32–44. http://dx.doi.org/10.26643/gis.v12i1.3376.
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Momentum has remained an unanswered anomaly in finance literature. Researchers have pointed out two arguments, whether the source of prior return anomalies are rational or behavioral. In this paper, we examined return chasing tendency investors and the profitability of probable price momentum strategy in Indian equity market using the monthly return data of equities represented in BSE-500 index encompassing the time period from July 2004 to Jun 2014. Study is an attempt to analyze momentum effect before, during and after the financial crisis of 2007–2009 to check whether investors continue to follow the same strategy during crisis or their behavior undergoes any change. Also study examined the adequacy of rational CAPM models to explain momentum profits. The result evidenced a strong presence of economically and statistically significant momentum profit in Indian stock market equity returns. Therefore return chasing tendency of Indian investors is found to be persistent in the intermediate horizon in Indian context. Closer observation of the results reveals that, Indian investors are winners chasers rather than investor in past losers. Study also confirmed that investors sentiments are volatile according to general market environment and inadequacy of rationalist equilibrium model to explain momentum profits.
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Bernard, Martin, and Malabika Deo. "Are Indian Investors Return Chasers? An Anatomy of their Trading Behavior." GIS Business 12, no. 2 (April 6, 2017): 32–44. http://dx.doi.org/10.26643/gis.v12i2.3362.
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Momentum has remained an unanswered anomaly in finance literature. Researchers have pointed out two arguments, whether the source of prior return anomalies are rational or behavioral. In this paper, we examined return chasing tendency investors and the profitability of probable price momentum strategy in Indian equity market using the monthly return data of equities represented in BSE-500 index encompassing the time period from July 2004 to Jun 2014. Study is an attempt to analyze momentum effect before, during and after the financial crisis of 2007–2009 to check whether investors continue to follow the same strategy during crisis or their behavior undergoes any change. Also study examined the adequacy of rational CAPM models to explain momentum profits. The result evidenced a strong presence of economically and statistically significant momentum profit in Indian stock market equity returns. Therefore return chasing tendency of Indian investors is found to be persistent in the intermediate horizon in Indian context. Closer observation of the results reveals that, Indian investors are winners chasers rather than investor in past losers. Study also confirmed that investors sentiments are volatile according to general market environment and inadequacy of rationalist equilibrium model to explain momentum profits.
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Dasgupta, Ranjan, and Sandip Chattopadhyay. "Stock market drivers of retail investors’ sentiment – facets and new evidences from India." Rajagiri Management Journal 14, no. 2 (July 13, 2020): 133–54. http://dx.doi.org/10.1108/ramj-05-2020-0015.
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Purpose The determinants of investors’ sentiment based on secondary stock market proxies in many empirical studies are reported. However, to the best of our knowledge, no study undertakes investor sentiment drivers developed from primary survey measures by constructing an investor sentiment index (ISI) in relation to market drivers to date. This study aims to fill this research gap by first developing the ISI for the Indian retail investors and then examining which of the stock market drivers impacts such sentiment. Design/methodology/approach The ISI is constructed using the mean scores of eight statements as formulated based on popular direct investor sentiment surveys undertaken across the world. Then, we use the multiple regression approach overall and for top 33.33% (high-sentiment) and bottom 33.33% (low-sentiment) investors based on the responses of 576 respondents on 18 statements (proxying eight study hypotheses) collected in 2016. Moreover, the demography-based classification based investors’ sentiment is examined to make our results more robust and in-depth. Findings On an overall basis, the IPO activities/issues and information certainty, trading volume and momentum and institutional investors’ investment activities market drivers significantly and positively impact retail investors is examined. However, only IPO activities/issues and information certainty influences both high- and low-sentiment investors. It is intriguing to report that nature of the stock markets show conflicting results for high- (negative significant) and low- (positive significant) sentiment investors. Originality/value The construction of the ISI from primary survey measure is for the first time in Indian context in relation to investigating the stock market drivers influential to retail investors’ sentiment. In addition, hypothesized market drivers are also unique, each representing different fundamental and technical characteristics associated with the Indian market.
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P., Sashikala, and Girish G. P. "Factors Influencing Retail Investor’s Trading Behavior in Indian Equity Market." International Journal of Business and Management 10, no. 11 (October 26, 2015): 206. http://dx.doi.org/10.5539/ijbm.v10n11p206.
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In this study we identify the factors which influence and affect retail investor’s trading behavior in Indian equity market. To identify the factors, we use primary data collected from retail investors belonging to different age group, professional backgrounds and demographics of India. The results of the study suggest that factors like broker’s advice, personal analysis, current price of the equity stock, financial analyst’s recommendations, inclination towards online trading; investor’s confidence in advice given by his/her financial advisor plays a major role in influencing and affecting trading behavior of retail investors. The result of the study gives insights to firms offering financial services in developing nation like India to keep these factors in mind while offering products/services or in their marketing campaigns while targeting retail investors of Indian equity market.
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Sinha, Sonalika, and Bandi Kamaiah. "Estimating Option-implied Risk Aversion for Indian Markets." IIM Kozhikode Society & Management Review 6, no. 1 (January 2017): 90–97. http://dx.doi.org/10.1177/2277975216677600.
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What do nearly 1.5 lakh observations of options data say about risk preferences of Indian investors? This paper explores a nonparametric technique to compute probability density functions (PDFs) directly from NIFTY 50 option prices in India, based on the utility preferences of the representative investor. Use of probability density functions to estimate investor expectations of the distribution of future levels of the underlying assets has gained tremendous popularity over the last decade. Studying option prices provides information about the market participants’ probability assessment of the future outcome of the underlying asset. We compare the forecast ability of the risk-neutral PDF and risk-adjusted density functions to arrive at a unique index of relative risk aversion for Indian markets. Results indicate that risk-adjusted PDFs are reasonably better forecasts of investor expectations of future levels of the underlying assets. We find that Indian investors are not neutral to risk, contrary to the theoretical assumption of risk-neutrality among investors. The computed time-series of relative risk aversion overcomes the limitations of the VIX (implied volatility index) to yield a more reliable index, particularly useful for the Indian markets. Validity of the computed index is established by comparing with existing measures of risk and the relationships are found to be consistent with market expectations.
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Sharma, Manika, and Mohammad Firoz. "Do Investors’ Exhibit Cognitive Biases: Evidence From Indian Equity Market." International Journal of Financial Research 11, no. 2 (March 16, 2020): 26. http://dx.doi.org/10.5430/ijfr.v11n2p26.
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The current article examines the influence of cognitive biases on the process of decision making among equity investors of India. The research is being directed by conducting a survey on a sample of 400 investors investing in Indian capital market. This study measures behavioural biases of individual investors' using a structured questionnaire as a research instrument of the study. By means of cross section data analysis, this analysis steadily provides evidence that behavioural biases adversely affect rational decision-making of an investor. This research indicates that a statistically significant relationship exists between behavioural biases among investors and the process of rational decision-making. The findings of the study are imperative to investors investing Indian capital market, brokers, financial consultants and investment advisors; responsible for managing assets and constructing portfolios for investment clients, as they can alter the investment decision by accessing the susceptibility of investors towards cognitive biases, which often lead to erroneous decision.
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Katti, Supriya, and Mehul Raithatha. "Impact of Venture Capital Investment on Firm Performance: An Indian Evidence." Global Business Review 21, no. 4 (June 27, 2018): 1011–24. http://dx.doi.org/10.1177/0972150918779165.
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We evaluate the monitoring and certification hypotheses associated with venture capital (VC) investors involved with Indian listed firms having the potential to influence firm performance. Empirical results of our study do not support monitoring and certification hypotheses associated for VC investors involved in publicly listed firms in India. On the other hand, we find the evidence of value erosion due to the presence of VC investors. The negative effect is justified through the opportunistic behaviour of the investor having a very easy route to exit investment through the secondary market in case of expected underperformance of the firm. The study also reveals that the origin of VC investors does influence firm performance. The results have a significant impact due to the regulatory framework defining the portfolio of VC investors.
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Dhandayuthapani, Dr S. P. "Indian Investors and IPO�S." International Journal for Research in Applied Science and Engineering Technology 7, no. 3 (March 31, 2019): 2093–97. http://dx.doi.org/10.22214/ijraset.2019.3387.
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Kar, Siddhartha P. "Indian science needs alternative investors." Nature 485, no. 7397 (May 2012): 174. http://dx.doi.org/10.1038/485174a.
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Harris, Sid. "Investors Targeting the Indian Market." Focus on Powder Coatings 2009, no. 8 (August 2009): 1–2. http://dx.doi.org/10.1016/s1364-5439(09)70147-9.
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Prosad, Jaya Mamta, Sujata Kapoor, and Jhumur Sengupta. "Behavioral biases of Indian investors: a survey of Delhi-NCR region." Qualitative Research in Financial Markets 7, no. 3 (August 3, 2015): 230–63. http://dx.doi.org/10.1108/qrfm-04-2014-0012.
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Purpose – The purpose of this paper is to examine the presence the behavioral biases in Indian investors specifically, overconfidence, excessive optimism (pessimism), herd behavior and the disposition effect. It further investigates the role of demographics and investor sophistication in influencing the biases. Finally, it reveals which bias is most prevalent in the Indian context. Design/methodology/approach – For this purpose, a survey has been conducted on the investors of the Delhi/NCR area. The data have been collected with the help of a structured questionnaire that is analyzed with the help of relevant statistical tools. Findings – The survey evidence shows that behavioral biases are dependent on investors’ demographics and their trading sophistication with highest influencing factors being age, profession and trading frequency. Each bias corresponds to a specific set of investor characteristics and overconfidence comes out to be the most important bias in the Indian context. Research limitations/implications – The potential limitations of the present survey can be ascribed to socially desirable responses and their difference with actual market behavior. Further, due to time and resource constraint, the data set is limited to investors of only Delhi/NCR. Practical implications – This study is most relevant for financial advisors, as it facilitates them in gaining a better understanding of their clients’ psychology. It can aid them in developing behaviorally modified portfolio, which best suits their clients’ predisposition. Originality/value – The paper gives a unique insight on the investors’ profile corresponding to each bias under consideration. It not only updates the evidence on behavioral biases but also highlights which bias is the most influential in the Indian context.
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Dasgupta, Ranjan, and Rashmi Singh. "Investor sentiment antecedents." Review of Behavioral Finance 11, no. 1 (June 5, 2019): 36–54. http://dx.doi.org/10.1108/rbf-07-2017-0068.
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PurposeThe determinants of investor sentiment based on stock market proxies are found in numbers in empirical studies. However, investor sentiment antecedents developed from primary survey measures by constructing an investor sentiment index (ISI) are not done till date. The purpose of this paper is to fill this research gap by first developing an ISI for the Indian retail investors and then examining the investor-specific, stock market-specific, macroeconomic and policy-specific factors’ individual impact on the investor sentiment.Design/methodology/approachFirst, the authors develop the ISI by using the mean scores of six statements as formulated based on popular direct investor sentiment surveys undertaken throughout the world. Then, the authors employ the structural equation modeling approach on the responses of 576 respondents on 40 statements (representing the index and four study hypotheses) collected in 2016 across the country.FindingsThe results show that investor- and stock market-specific factors are the major antecedents of investor sentiment for these investors. However, interestingly macroeconomic fundamentals and policy-specific factors have no role to play in driving their sentiment to invest in the stock market.Practical implicationsThe major implication of the results is that the Indian retail investors are showing a mixed approach of Bayesian and behavioral finance decision making. So, these implications can guide the investment consultants, regulators, other stakeholders in markets and overwhelmingly the retail investors to introspect their investment decision making across time horizons.Originality/valueThe formulation of ISI in an emerging market context and thereafter examining possible antecedents to influence retail investors in their investment decision making are not done till date. So, the study is unique in its research issue and findings and will have significant implication for the retail investors at least in emerging market contexts.
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UPADHYAY, RITESH. "Factors affecting the Investment behavior of Stock Market Investors: A Quantitative Investigation." International Journal of Management, IT and Engineering 08, no. 04 (2018): 300–307. http://dx.doi.org/10.36893/ijmie.2018.v8i4.300-307.
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One of the world's most active and complicated financial markets is the stock market. There is a sizable quantity of money invested in various stocks and securities due to the market's participation by millions of investors. Several variables, including monetary conditions, political stability, corporate performance, and personal preferences, have an impact on how investors behave in the stock market. Investors must make sound financial decisions to maximize profits and reduce risks and stock market investment behavior is a critical component of that process. It's essential for investors, financial advisors, and legislators to comprehend the variables that influence investment behavior. The way Indian stock market investors invest is influenced by a number of factors. Individual investor preferences, risk tolerance, and investment goals all have a big impact on how they behave when it comes to investing. The ability to manage the complicated and dynamic financial market can be aided by having a thorough awareness of the numerous elements that influence investing behavior in the Indian stock market.
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Chatnani, Niti Nandini. "Green Investing and Indian Investors: The Case of Suzlon Energy." FIIB Business Review 7, no. 1 (March 2018): 16–21. http://dx.doi.org/10.1177/2319714518763395.
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In the early 2000s, ‘green investing’ caught the fancy of investors worldwide as they realized that being environmentally conscious could also be financially rewarding. The Suzlon Energy Initial Public Offering (IPO) in India in September 2005 received much attention, and was oversubscribed nearly 25 times. Many investors regarded Suzlon as a green investment opportunity, and the stock touched record high levels over the next three years of its listing. However, some large and highly leveraged acquisitions made with the objective of achieving fast growth led to major financial distress for the company. The race to capture new markets with new products also led to compromises on product quality and customer service. A good business model was damaged by bad investment decisions, and stock prices declined steadily. Suzlon disappeared from the radar of green investors till an acquisition 23 per cent stake in Suzlon Energy by a strategic investor revived the market’s interest in this stock. This paper is a case study of how, despite being a green business with great potential, Suzlon took on risks that led to major losses for its investors, and lessons for green investors of India.
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Mutum, Kelvin. "Volatility Forecast Incorporating Investors’ Sentiment and its Application in Options Trading Strategies: A Behavioural Finance Approach at Nifty 50 Index." Vision: The Journal of Business Perspective 24, no. 2 (April 26, 2020): 217–27. http://dx.doi.org/10.1177/0972262920914117.
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The present study was to examine whether the performance of options trading strategies can be improved if volatility forecasting incorporating investors’ sentiment was incorporated in the decision-making process at the Indian options market. The study adopted the multiple-factor model to build the Indian volatility forecasting model. The benchmark forecasting model (BMF) includes absolute daily returns (|RA|), daily high–low range (HLR) and daily realized volatility (RV). The proxies of investors’ sentiment considered in the study were India volatility index (IVIX), advance decline ratio (ADR), put-call open interest (PCOI) and their changes. The results of the causality and regression test indicate that investors’ sentiment and their changes should be included in the forecasting model. Mean absolute percentage error (MAPE) indicates that 15-day holding period shows the minimum error. Straddle strategies were simulated 15 days ahead before the options maturity date base on the direction of the forecast for different volatility forecasting models. The simulation result shows that the options trading performance might be improved if volatility forecasting incorporating investor sentiment, particularly IVIX, was incorporated in the decision-making process at the Indian options market. From the behavioural finance point of view, the study bridges the gap between options trading, volatility forecasting and information content of investors’ sentiment at the Indian financial market.
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Bosco. T., Ms Daisy, and Dr John Paul M. "A Study on Investors Perception on Indian Mutual Funds System with Reference to Private and Public Players." International Journal for Research in Applied Science and Engineering Technology 10, no. 4 (April 30, 2022): 2701–7. http://dx.doi.org/10.22214/ijraset.2022.41869.
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Abstract: The goal of this research is to find out more about investors' preferences and perceptions of the Indian mutual fund system, with a focus on private and public players. The two most common investor classes in the Indian mutual fund market, public and private players, were used to select mutual fund businesses. A mutual fund is a way of pooling money by distributing units to investors and investing the proceeds in securities in accordance with the offer document's goals. As a result, for the typical person, a mutual fund is the greatest investment since it allows them to invest in a diversified, professionally managed basket of securities at a low cost. In recent years, the number of investors and investment sources has exploded.
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Dubey, Priti, and Rishika Shankar. "Determinants of the Commodity Futures Market Performance: An Indian Perspective." South Asia Economic Journal 21, no. 2 (September 2020): 239–57. http://dx.doi.org/10.1177/1391561420970837.
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This article aims to find out interlinkages between equity and commodity markets through the channel of investors’ outlook in the equity market. The proxies used for gauging perception of investors are investor sentiment index and Advance–Decline ratio. The study also incorporates the introduction of Commodity Transaction Tax (CTT) and occurrence of National Spot Exchange Limited (NSEL) scam in the year 2013. Additionally, returns in commodity market are examined to be a function of equity returns. The empirical findings suggest that the liquidity of commodity futures is inversely related to investor sentiments in equity market, and commodity returns are also negatively related to equity returns. Therefore, equity and commodity markets are inversely related, as liquidity in both the markets reacts to the investor sentiments; contrarily, commodity returns experience a significantly negative impact from equity returns. Additionally, the results also provide evidence that investor sentiment in equity possesses the ability to predict liquidity in the commodity futures market. The study also suggests that the CTT and NSEL scam have significantly and positively affected the liquidity of the Indian commodity market.
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Dassani, M. Preksha, and M. Sandhya Sridevi. "Understanding Investor Behaviour Using Prospect Theory: An Indian Perspective." ANUSANDHAN – NDIM's Journal of Business and Management Research 3, no. 1 (February 28, 2021): 42–50. http://dx.doi.org/10.56411/anusandhan.2021.v3i1.42-50.
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Kahneman and Tversky's Prospect Theory tries to explain investor behaviour under risk when alternative outcomes are available to them while making an investment decision. Loss Aversion, Regret Aversion, and Mental Accounting are the three dimensions of this theory. Loss aversion is an investor emotion that prevents unloading unprofitable investments because they lead to a loss. Regret Aversion is the anticipation of regret where an investor holds to loss-making investments with the fear of admitting an incorrect investment decision. Mental Accounting is the value investors place on money, often leading to detrimental results. This research attempts to gain deeper insights into the complex investor behaviour which forms an important aspect of behavioural finance. An online survey of 282 pan-India stock market investors is done on the three dimensions and the collected data is analysed using One-way ANOVA to measure the relationship between independent (income, investment amount, education qualification, age, gender, and investor experience) and dependent variables (loss aversion, regret aversion, and mental accounting). This study is of significant interest to financial institutions for product design, to the government in making economic policy, and financial advisors who can consider the independent variables as crucial factors that make their clients prone to behavioural biases.
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Goswami, Sarthak, Akshat Bhargava, Bhumika Mulchandani, and Vaishnavi Rathi. "BEHAVIOURAL FINANCE : A STUDY OF PRESENCE OF INVESTOR BIASES AMONG INDIAN INVESTORS." International Journal of Advanced Research 8, no. 02 (February 29, 2020): 06–14. http://dx.doi.org/10.21474/ijar01/10429.
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Nagar, Gautam Buddh. "The Impact of Real Estate Investment Trusts (REITs) on the Indian Commercial Real Estate Market: A Study of Investor Perception and Market Performance." INTERANTIONAL JOURNAL OF SCIENTIFIC RESEARCH IN ENGINEERING AND MANAGEMENT 08, no. 05 (May 2, 2024): 1–5. http://dx.doi.org/10.55041/ijsrem33024.
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The introduction of Real Estate Investment Trusts (REITs) in India has marked a significant evolution in the country's commercial real estate landscape. This paper examines the multifaceted impact of REITs on the Indian commercial real estate market, focusing on key dimensions such as liquidity, transparency, investor access, and market development. Firstly, REITs have enhanced liquidity in the commercial real estate sector by providing investors with a liquid avenue to invest in income-generating properties, thereby reducing the traditionally illiquid nature of real estate investments. This increased liquidity has facilitated capital flow into the market and stimulated transaction activity. Secondly, REITs have contributed to greater transparency in the Indian real estate market. By mandating regular disclosures and adherence to stringent governance standards, REITs have improved information symmetry between investors and property developers, leading to a more efficient allocation of capital and reduced investment risk. Thirdly, the introduction of REITs has widened investor access to commercial real estate assets. Individual investors, institutional funds, and foreign investors now have the opportunity to participate in the market through REIT investments, thereby diversifying their portfolios and potentially earning stable returns from rental income and capital appreciation. Furthermore, REITs have played a pivotal role in the development of the Indian commercial real estate market. Their presence has spurred the professionalization of property management practices, encouraged the adoption of international standards, and catalyzed the growth of ancillary industries such as real estate services and financial advisory firms.
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Mehtab, Ms Fozia, and Dr H. Nagraj. "Personality Traits and Risk Perception of Indian Investors." International Journal of Trend in Scientific Research and Development Volume-3, Issue-3 (April 30, 2019): 540–44. http://dx.doi.org/10.31142/ijtsrd22874.
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Garg, Ashish, and Rachita Gulati. "Do investors herd in Indian market." DECISION 40, no. 3 (December 2013): 181–96. http://dx.doi.org/10.1007/s40622-013-0015-z.
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Mushinada, Venkata Narasimha Chary, and Venkata Subrahmanya Sarma Veluri. "Elucidating investors rationality and behavioural biases in Indian stock market." Review of Behavioral Finance 11, no. 2 (June 28, 2019): 201–19. http://dx.doi.org/10.1108/rbf-04-2018-0034.
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Purpose The purpose of this paper is to empirically test the relationship between investors’ rationality and behavioural biases like self-attribution, overconfidence. Design/methodology/approach The study applies structural equation modelling to understand whether individual investors, besides being rational, are subjected to self-attribution bias and overconfidence bias. Findings The study shows the empirical evidence in the support of behavioural biases like self-attribution and overconfidence existing besides investors’ rationality. Moreover, there is a statistically significant positive covariance found between self-attribution and overconfidence, implying that an increase/decrease in self-attribution results in the increase/decrease in overconfidence and vice versa. It is also observed that the personal characteristics of an investor such as gender, age, occupation, annual income and their trading experience have an impact on behavioural biases. Research limitations/implications The study focused on rational decision making, self-attribution and overconfidence biases using primary data. Further studies can be encouraged to test the existence of behavioural biases based on both market level and individual account data simultaneously. Practical implications Insights from the study suggest that the investors should perform a post-analysis of each investment, so that they become aware of past behavioural mistakes and stop continuing the same. This might help investors to minimise the negative impact of self-attribution and overconfidence on their expected utility. Originality/value To the best of the authors’ knowledge, this is the first study to examine the relationship among investors’ rationality, self-attribution and overconfidence in the Indian context using a comprehensive survey.
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R, Saravanaselvi, and Thiruppathy K. "Functions of the indian mutual fund industry." Journal of Management and Science 1, no. 1 (June 30, 2013): 32–38. http://dx.doi.org/10.26524/jms.2013.5.
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Investment is a commitment of funds in real assets or financial assets. Investment involves risk and gain. In the present dynamic global environment, e x p l o r i n g investment a v e n u e s a r e of g r e a t r e l e v a n c e .Investment skills developed over a period of time are considerably influenced by experience and spadework carried out to arrive at conclusions. The success of an investment acti vit y depends on the knowledge and ability of investors to invest, the right amount, in the right type of investment, at the right time. Real assets, being tangible material things, are less liquid than financial asset Compared to financial assets, returns on real assets are more difficult to measure accurately due to the absence of broad, ready, and active market. Financial assets available to individual investors are manifold, having different concomitant benefits to choose from. All financial investments are risky but the degree of risk and return differ from each other. An investor has to use his discretion, which is an art acquired by l earning a n d pra ct i cal experience. The knowledge of financial investment and the art of its management are the basic requirements for a successful investor Financial system comprises of financial institutions, services, markets and instruments,which are closely related and work in conjunction with each other. The litany of new financial institutions and instruments developed in recent years, with the ostensible objective of modernizing the financial sector, is impressively long; Mutual Funds, Discount and Finance House of India, Money Market Mutual Funds, Certificate of Deposit, Commercial Paper, Factoring and Treasury Bills. Financial services through the network of elements serve the needsofindividuals, institutionsand companies. It is through these elements, the functioning of the financial system is facilitated. Over the years, the financial services in India have undergone revolutionary changes and had become more sophisticated, in response to the varied needs of the economy. The process of financial sector reforms, economic liberalization and globalization of Indian Ca pi tal Market had generated and augmented the interest of the investors in equity. But, due to Inadequate knowledge of the capital market and lack of professional expertise, the common investors are still hesitant to invest their hard earned money in the corporate securities. The advent of mutual funds has helped in garnering the investible funds of this category of investors in a significant way.
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P.H., Haritha, and Rashmi Uchil. "Impact of investor sentiment on decision-making in Indian stock market: an empirical analysis." Journal of Advances in Management Research 17, no. 1 (September 13, 2019): 66–83. http://dx.doi.org/10.1108/jamr-03-2019-0041.
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Purpose The purpose of this paper is to analyze the relationship between the factors influencing investors sentiment and investment decision-making (DM) of the individual investors. This paper proposes a unique conceptual framework that incorporates the herding, market and awareness factors that are leading to investor sentiment (IS) and decision-making process of the individual investors. Design/methodology/approach This study has conducted a questionnaire-based survey to collect data from 875 individual investors through the convenience sampling method. Structural equation modeling was used to evaluate the relationship between factors, namely, market effect, herd behavior, media, social interaction and advocate recommendation that influences IS and DM. Findings The present study found that market effect and herding are the most significantly influencing factors of investors sentiment. Among the sources of awareness, the internet has the lowest influence when compared to media, social interaction and advocate recommendation. Practical implications This study will help individual investors to avoid the problems faced while making an investment decision. The study could help investors to select a suitable investment aid and avoid repeating expensive errors, which arise due to investors’ sentiment. It is recommended to increase the awareness regarding investors’ sentiment among individuals, so as to increase their understanding about the financial settings and to make them confident while investing. The present study also sheds light upon the behavior of Indian individual investors so that policymakers can take appropriate measures to provide the proper guidance. Policymakers can conduct awareness campaigns to increase investors’ knowledge on the market condition and to enhance proper investment DM among them. Originality/value To best of the authors’ knowledge, previous studies have focused on limited factors at a time. The present study has investigated how factors influencing investors sentiment, namely, market factors (MF), herding as well as awareness would influence investment DM among individual investors in India. The influence of these factors has never been studied simultaneously in the context of Indian individual investors’ DM.
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VERMA, JYOTI. "Factors’ Influencing Driving Demand of Cryptocurrency and its Impact on Behavioral Intention: An Indian Perspective." Review of Finance and Banking 14, no. 1 (June 30, 2022): 35–43. http://dx.doi.org/10.24818/rfb.22.14.01.03.
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Investors are gearing up to invest their money into wide range of cryptocurrency choices. However, investors are still somewhat hesitant about the adoption of this virtual currency. Therefore, there is a strong need to Önd out the reasons by identifying the factors that a§ect the investorsí perceptions towards adoption decisions for investing in cryptocur- rencies. New constructs have been identiÖed that will provide value and utility for users of cryptocurrencies. The factors proposed in the model have the greatest ináuence on the behavioral intention of the investors. Findings highlighted the concerns regarding trust, risk factors, ease of use, and supportive technologies.
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Rajasekharan Ganesh, Sampath Thiyagarajan, Gopala Vasudevan, and G. Naresh. "INVESTORS’ OVERCONFIDENCE IN THE STOCK MARKET." Copernican Journal of Finance & Accounting 11, no. 4 (July 19, 2023): 107–23. http://dx.doi.org/10.12775/cjfa.2022.021.
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An investor would normally depend on technical or/and fundamental analysis to make his/her investment decision in the secondary market. But in most cases the investor may not have time to do these analyses, understand the market or stock and then make the decision, therefore, they often end up taking irrational decisions. In some cases, the investors take these irrational decisions on the basis of the overconfidence they have concerning the information they possess. These investors are termed to bear overconfidence bias. The study aims to examine the influence of overconfidence bias in the Indian stock market. The study employed Vector Autoregression (VAR) methodology and impulse response function to know how long the bias persists in the market once the overconfidence bias is influenced by the investor. The results of the study show enough evidence to point out the influence of overconfidence bias in the market and it persists for more than 110 days. The study also finds out Efficient Market Hypothesis does not hold good. Our study period includes the time period since globalization of the Indian stock market and it also covers several periods of stress including the global financial crisis of 2007–08 and COVID-19 period.
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Panchal, Nilam, and Ayush Ajmera. "STUDY ON MAJOR INVESTMENT PREFERENCES OF INDIAN INVESTORS." International Journal of Management, Public Policy and Research 1, no. 3 (August 31, 2022): 35–39. http://dx.doi.org/10.55829/ijmpr.v1i3.58.
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The purpose of this study was to analyse the preferences of investors in the Indian share market and other investment options available in the market. Many factors including risk awareness, investment time horizon, mode of trading, objectives of investment, usage of fundamental & technical analysis before investment, sources of information, etc. which affect the investment decisions are analysed through this research. The study is carried out using only the primary data collected by convenience sampling technique through a survey of 204 respondents from different regions of India but majorly from Gujarat State. Parametric and Non-parametric tests are applied to the data using SPSS software to analyse the effects of different variables. The study concluded that income levels and risk involvement highly affect the investment decision of an investor. Also, the usage of fundamental and technical analysis is important before making any investment. Another big conclusion is that returns are the major objective of maximum investors. Fixed deposit is the most preferred investment option according to the respondents.
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PATSIDES, NICHOLAS. "Allies, Constituents or Myopic Investors: Marcus Garvey and Black Americans." Journal of American Studies 41, no. 2 (July 5, 2007): 279–305. http://dx.doi.org/10.1017/s0021875807003489.
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Marcus Garvey's ideology had special meaning to West Indian migrants because it helped their economic adjustment in the United States. Despite the relocation of the Universal Negro Improvement Association to New York City, Garvey continued to speak predominantly to West Indians at home and abroad, since he shared their colonial mentality and understood their migrant ideology – the search for economic gain abroad in order to multiply options back home. Garvey scholars have argued that black Americans benefited from Garvey rhetoric as much as West Indian migrants, but tensions between the two communities suggest that black Americans did not think so. Garveyism served to accentuate economic rivalries as black Americans suspected that migrants wanted to transfer their material success back home – indeed, Garvey openly encouraged as much.
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Saxena, Kirti, and Madhumita Chakraborty. "Does it pay to pay attention to attention? Evidence from an emerging market." Managerial Finance 48, no. 4 (February 8, 2022): 629–42. http://dx.doi.org/10.1108/mf-09-2021-0401.
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Purpose This study aims to explore the asset pricing implications of attention allocation theories in the Indian stock market.Design/methodology/approach Investor attention is captured through investors' search behavior, the Google search volume index. Panel least square method is used in this study, and the research is performed at firm-level upon NSE100 constituent firms with 21,566 firm-week observations.Findings The authors find a significant increase in abnormal return following an increase in abnormal attention. Also, this effect is strengthened for smaller firms and firms with positive sentiments. Further, applying a geographic lens to the investigation, it is found that the attention impact is attributable to local investors. Finally, the study demonstrates that local attention-based portfolio formation and trading strategy, i.e. long in high abnormal local attention stocks and short in low abnormal local attention stocks, leads to a significant return premium.Research limitations/implications This study reveals that behavioral factors like investor attention drive the Indian Stock Market. Also, the geography analysis shows that observing investors' behavior enables predicting the arrival of private information. Thus abnormal local attention can be a potential input factor for forecasting exercises and trading strategy formation, thereby aiding in exploiting profitable opportunities.Originality/value The study captures asset pricing implications of investor attention and explores the effect of firm size and sentiment on the attention–return relationship in an emerging economy, India. It also relates location proximity with investors' attention allocation and tests its implications on stock prices.
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Raut, Rajdeep Kumar, and Rohit Kumar. "Investment Decision-Making Process between Different Groups of Investors: A Study of Indian Stock Market." Asia-Pacific Journal of Management Research and Innovation 14, no. 1-2 (March 2018): 39–49. http://dx.doi.org/10.1177/2319510x18813770.
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This article attempts to identify differences in perception for the seven most prominent behavioural biases between two groups of individual investors: (a) experienced and (b) new to the market investors in investment decision-making. Primary data have been collected from the active individual stock market participants from the four states of India, namely, Jharkhand, Bihar, Odisha and West Bengal. Findings of this study suggest that respondents have a similar perception for availability bias, representativeness and emotional contagion while the other four factors such as herding, informational cascades, anchoring and overconfidence show significant discrimination in investment decision-making between the two groups of investors. Herding is identified as the most discriminatory factor for investor groups.
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I B, Dr Cirappa, and Ms Tejashwini K C. "The Relationship between Awareness and Retail Investors Investment Intentions in the Derivatives Market." International Journal of Management and Humanities 9, no. 2 (October 30, 2022): 10–13. http://dx.doi.org/10.35940/ijmh.b1529.109222.
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The Indian derivatives market remains small despite a lengthy history, several committee recommendations, and continuous developments. The Indian derivatives market is dominated by institutional investors, with little participation from individual investors due to a lack of awareness and comprehension of the product. As a result, the objectives of this research are to establish the level of retail investor derivatives market awareness, as well as the relationship between awareness and derivatives market investment intention. A questionnaire- based survey is being conducted with a sample size of 30 respondents. The findings of the survey demonstrate that the majority of respondents have either average or below average derivatives market awareness, and that there is a strong link between awareness and derivatives market investment intention.
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Prajapati, Dhaval, Dipen Paul, Sushant Malik, and Dharmesh K. Mishra. "Understanding the preference of individual retail investors on green bond in India: An empirical study." Investment Management and Financial Innovations 18, no. 1 (February 16, 2021): 177–89. http://dx.doi.org/10.21511/imfi.18(1).2021.15.
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The biggest challenge facing countries, including India, is creating and managing an LCR (low carbon resilient) economy, which balances the need for high growth rates and is environmentally sustainable. The green bond market provides investors the means to help change the economy into an LCR economy. The study was undertaken to understand the key drivers and the factors influencing the individual retail investor’s decision to invest in green bonds. A survey instrument was designed and administered through the snowball sampling technique to 125 Indian respondents of various age groups who were eligible to invest in the Indian bond market. SPSS software was used to conduct a descriptive analysis followed by regression and conjoint analyses. The study results suggest that the Environmental, Social, and Governance (ESG) rating and credit rating of the green bond issuers are the key factors that influence an individual’s investment decision. The findings also highlight that incentives such as tax exemptions and awareness of green bonds also affect an investor’s decision. This research stands out as one of the first attempts to understand the Indian retail investors’ perception of a green bond.
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Venkataiah, Dr G. C., M. Yellaiah Naidu, and Dr M. Paparao. "Analysis of Influencing Factors of Investor’s Perceptions on Indian Stock Markets." Revista Gestão Inovação e Tecnologias 11, no. 4 (September 27, 2021): 5629–33. http://dx.doi.org/10.47059/revistageintec.v11i4.2587.
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Investing in the Indian stock market is a great way for groups of investors to pool their funds for a common goal. Stock market schemes in India are managed by companies sponsored by financial institutions, banks, private companies, or international companies. This study was conducted to learn more about people's attitudes toward investing in the Indian stock market. For this study, the researcher spoke with 101 people who have invested in stock markets such as the BSE and NSE. The study is empirical in nature, and the universe for this study is Hyderabad city investors, with convenient sampling as the sampling technique. This study relied on primary data gathered through a structured questionnaire. The findings of the study suggest that stock market investors should pay close attention to other factors such as currency fluctuations, international relationships, tax rates, inflation rates, and political decisions, as these factors have an impact on stock market prices at the BSE and NSE, and that international relationships, tax rates, and political decisions influence investor perceptions.
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Kushwaha, Bijay Prasad, Atul Shiva, and Vikas Tyagi. "How Investors’ Financial Well-being Influences Enterprises and Individual’s Psychological Fitness? Moderating Role of Experience under Uncertainty." Sustainability 15, no. 2 (January 16, 2023): 1699. http://dx.doi.org/10.3390/su15021699.
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The study aims to investigate the role of financial well-being of the investor on psychological fitness of clients and organizations in the emerging financial markets of India. A survey was conducted during the pandemic in Indian financial markets wherein most of people’s financial situation was extremely poor and uncertain. During the COVID-19 pandemic, retail investors who availed themselves of financial products and services from leading brokerage houses of India were investigated. The study was conducted on 290 retail investors of Delhi, National Capital Region (NCR) and the financial hub of Mumbai. The participants were approached using the purposive sampling method. The study further examined moderating effects of pleasant and unpleasant experience of investors during difficult times. The study applied partial least square multi-group analysis (PLS–MGA) for measuring invariance for pleasant and unpleasant scenarios of investors in the Indian context. The findings suggested that consumers’ well-being enhances individual satisfaction at higher enterprise levels, it also motivates individuals to manage their finances to deal with uncertain times. Additionally, the control variables of age and gender were used to measure pleasant and unpleasant experiences of investors from the base of their satisfaction level. The results suggest that during difficult times in financial markets, females exhibited higher unpleasant experiences than male investors. Further, consumers’ well-being was primarily driven by older investors with pleasant experiences during the pandemic. The present study offers an interdisciplinary approach towards measuring consumers’ psychology in the domain of behavioral finance.
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Bondia, Ripsy, Pratap Chandra Biswal, and Abinash Panda. "The unspoken facets of buying by individual investors in Indian stock market." Review of Behavioral Finance 11, no. 3 (August 12, 2019): 324–51. http://dx.doi.org/10.1108/rbf-12-2017-0121.
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PurposeThe purpose of this paper is to develop an in-depth contextualized understanding of individual investors’ buying decision in Indian stock market. Specifically, it provides answers to: how do individual investors make buying decision in stock market; and how and when do biases set in during such decisions. The paper also brings forward some aspects of individual’s journey as an investor.Design/methodology/approachGiven the exploratory nature of this study, the paper takes a step away from typically used variance approach and instead uses a process approach. The authors do in-depth one-on-one interview, where each respondent shares his/her lived experiences as an investor retrospectively. To understand buying decision, each respondent is asked to elaborate three significant buying transactions carried out by him/ her in stock market.FindingsSocio-cultural factors are found to have significant influence in inducing respondents to enter market. “Safe” vs “Risky” mental account emerges as the prominent stock categorization done by Indian investors. Three building blocks, namely, Identification, Rationalization and Further Validation emerge as the building blocks that culminate into buying decision of individual investors. The biases are seen to play a dual role in such decisions; as Attention Boosters and Rationales.Originality/valueThis study, to the best of authors’ knowledge, is first of its kind which amalgamates behavioral biases with phenomenon such as attention and Rationalization, to understand “how” behavioral biases set in during buying decision of individual investors.
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Ajmera, Ayush. "PERFORMANCE & GROWTH OF INDIAN EQUITY MARKET: A QUANTITATIVE RESEARCH." International Journal of Management, Public Policy and Research 2, no. 4 (October 17, 2023): 18–24. http://dx.doi.org/10.55829/ijmpr.v2i4.184.
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This study focuses on the growth of Indian equity market over past few years and the performance of market for the upcoming years, as the technology has had an intense and irreversible impact on the world as well as Indian equity market. The study is based on quantitative research with the objectives to determine the impact of demographic factors of investors on their investing decisions and their perception towards the equity market. The study also analyzes the impact of equity market on the Indian economy. Primary research is conducted by Questionnaire method. Sample is collected using convenience sampling method with sample size of 224 respondents, consisting investors aged above 30 years, from major cities of Gujarat state. Inferential analysis is used to make conclusions on the objectives of our study. Non-parametric tests are performed using SPSS software. From this study, researcher can easily conclude that performance and growth of equity markets depend on various factors and variables. The expected returns of investors are also affected by factors like investment time horizon and percentage of investments. Also the opinion of investor regarding the growth and performance of equity market is affected by many factors such as their age, gender, occupation, income level, expectations of returns, current performance of market and much more.
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Bogart, Dan, and Latika Chaudhary. "Extractive institutions? Investor returns to Indian railway companies in the age of high imperialism." Journal of Institutional Economics 15, no. 5 (September 12, 2019): 751–74. http://dx.doi.org/10.1017/s1744137419000237.
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AbstractDid colonial policies in India deliver excessive returns to British investors? We answer this question using annual data on Indian securities trading on the London Stock Exchange. We present new series on market capitalization, capital gains, dividend yields, and total returns of railway securities from 1880 to 1929. The average annual total return on the largest and most important Indian railway securities was 3.7%. These returns were not excessive by any financial standard. Indeed, they were lower than the return on railway securities in North America, Latin America, and Asia. We also undertake an event study analysis to assess whether Indian railways significantly benefited British investors. When the Government of India purchased large positions in the private railway companies between 1880 and 1910, there were opportunities for profit making. However, we find no evidence of abnormal investor returns in the years leading to the purchase of railway companies. Broadly our findings call into question the extractive nature of colonial railway policy.
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Siddiqui, Saif, and Preeti Roy. "Asymmetric information linkages across select futures and spot indices." Journal of Advances in Management Research 17, no. 3 (March 9, 2020): 397–419. http://dx.doi.org/10.1108/jamr-10-2019-0197.
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PurposeThe study investigates the amplitude and direction of the movement of information between spot and futures indices. The study progresses to account for the investor's heterogeneity and compare the evolving structure of investors in emerging and developed economies. Further, the structural linkages in terms of returns and variance have been explored for the futures indices to contribute to meteor shower literature as explained by Engle et al. (1990); Yarovaya et al. (2017).Design/methodology/approachTo facilitate the purpose, the Indian and Chinese markets were selected to represent emerging economies and the United States for developed one. The bivariate wavelet cum BEKK-GARCH (1,1) model was estimated.FindingsFor the developed markets, like the United States, the spot market improves its information transmission role with time horizon while exactly opposite holds for the Chinese market. A bidirectional overnight information spillover was found for all three pairs. The Indian futures market was vulnerable to bad news from the other two markets. Evidence suggesting the dominance of institutional investors in the Chinese futures market and retail investors in the Indian futures market is found.Originality/valueThe spot–futures relation has been studied on both the time and frequency domains considering different investment horizons. Due consideration has been taken to account for the overlapping trading hours.
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Sukla, Shivam, Deepak Babu, Sudhir Kumar Shukla, and Dinesh Prasad. "The Need of Cognitive Behavioural Therapy (CBT) for Capital Market Investors of Northern India – An Empirical Analysis." Lumbini Journal of Business and Economics 11, no. 1 (April 25, 2023): 214–30. http://dx.doi.org/10.3126/ljbe.v11i1.54330.
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The sudden and rapid growth of Indian capital markets has not only attracted global attention but has also propelled Indian people to invest in the markets, but there is a sizeable portion of such investors who have not actually been supposedly rational at making investment decisions and have ended up committing behavioural blunders with their capital market investment decisions which are giving them mental trauma and sleepless nights.
This study is the first of its kind on a global level where a total of 168 randomly selected capital market investors were asked to fill up a survey questionnaire aimed at testing the presence of five most prominent cognitive disorders (anxiety, panic attack, addiction, anger and eating disorder) among the capital market investors of India and the extent to which these disorders impact the stock investment decisions of Indian investors.
The results of the study show that cognitive disorders are not only closely associated with the investment decisions of Indian investors but also carry a significant impact on their market investment decisions. Moreover, there are considerable differences in opinions of investors across their socio-demography at 95% significance level (p<0.05) which gives a clear indication that Indian investors do need cognitive behavioural therapy to become more refined and sagacious at making capital market investments.
CBT has proven to be very helpful in treating a variety of mental illnesses in the past. Therefore, owing to the presence of cognitive disordersamongcapital market investors of India CBT can be of great help in developing an understanding of capital markets among investors by making them mindful of the unfavorable and frequently unreasonable considerations which adversely affect their sentiments, temperaments and subsequent market earnings.
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Isidore, Renu, and C. Joe Arun. "Does the annual income earned influence the decision-making in the Indian Secondary equity market?" Journal of Business and Economic Studies 26, no. 1 (May 26, 2022): 63–90. http://dx.doi.org/10.53462/aznz9904.
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The annual income earned plays a very important role in stock investing as it influences several dimensions of the investment process. The main goal of this research was to examine the role of the annual income earned by the secondary equity investors in the decision- making process. The research is exploratory in nature where a questionnaire survey was conducted on a sample of 436 secondary equity investors residing in the Chennai city of India. The data was analysed using quantitative techniques like ANOVA, Multinomial Logistic Regression, Discriminant and Cross Tabulation. The ANOVA results revealed that except in economy analysis and company analysis, the investors belonging to the various income groups differed in all the other decision-making techniques. When divided in terms of gender and age as well, the results were significant. The Multinomial logistic regression analysis resulted in a robust model which showed that industry analysis, technical analysis, gender*advocate recommendation and gender*equity investment knowledge are significant predictors of the annual income. The Discriminant model developed to predict the returns earned in equity investments showed that only the industry analysis and company analysis have a positive relationship with the equity returns. The demographic and financial profile of the high- and low-income investors were examined in the Cross-tabulation analysis. The main outcomes of the study are (i) older investors are less likely to belong to the low income group compared to the average income group; (ii) the low-income investors are likely to be male investors with decreased equity investment knowledge; (iii) investors who employ industry analysis are more likely to belong to the high income group and those who employ technical analysis are less likely to belong to the high income group compared to the average income group and (iv) investors with more equity investment knowledge are more likely to belong to the high income group compared to the average income group. The results also show that adopting industry analysis and/or company analysis may lead to a higher probability of earning higher returns in the equity market whereas the adoption of economy analysis, technical analysis and/or advocate recommendation lead to lower returns. This study would guide investors and advisors to examine the direct and indirect influences of the income earned. Government bodies and investor associations need to focus on the low income investors who are more vulnerable to financial blunders owing to their financial issues.