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A Study on Investment Pattern and Awareness of Salaried Class Investors in Coimbatore district of Tamilnadu, India.

 

Ms. S. Umamaheswari

Associate Professor,

Vivekanandha Institut e of Management Studies,

Coimbatore, Tamilnadu, India.

 

and

 

Mr. Ashok Kumar

Professor and Head,

Department of Management Studies,

Karpargam University,

Coimbatore, Tamilnadu, India.

 

ABSTRACT

 

Saving is a desire to reserve certain portion of income for future needs. In the recent findings it has been found that saving rate for household is affected not only by their ability to save but also their willingness to save. In the last few years it is evident that middle class Indians have paid attention only to their work for the entire duration. But it is tragical that only at the time of retirement they consult friends and relatives for investment for their future. Few years before there were only limited a number of options for investments like bank deposits and post office schemes. Only few percentages of rich and adventurous Indians have knowledge about Stock market and Securities. Now, the modern investment trend has a different scenario, various options of investment and best return for the investors. This would bring into light the awareness of investment patterns of salaried class investors in Coimbatore district.

 

Keywords: Saving, Investment, Income, and Awareness

 

Introduction

 

The word “Awareness” refers to a consciousness of the existence of a particular truth, event or thing. Hence, awareness is a course of action by which, one known’s the existence of a new thing. This process of knowledge makes a man to have an idea about a thing which he has not known earlier. However, he may not have a thorough knowledge of that thing. Acquiring the knowledge of the latest developments in a particular field also amounts to awareness and hence awareness is a continuous process.

 

The sense of awareness of an investor towards savings and investment is created modified and shaped up by various external sources. The print and electronic media such as the dailies, weeklies, television, radio etc., and personal contact with friends, relatives, investment consultants etc, contribute a lot in creating awareness among investors. As the awareness of investors is considered to be indispensable while studying one’s savings and investment pattern, an attempt was made to measure the awareness level of investors. Awareness is an abstract concept and hence it cannot be measured directly in quantifiable terms. Moreover, there is no fixed or readymade method available to measure it but the awareness can be indirectly measured.

 

Review of literature

 

Krishnamoorthy.C.(2008).in his study has analyzed the profile and awareness of salaried class investors and their attitude and satisfaction towards investment. In has been concluded that all salaried people were aware of bank deposits, PF schemes, insurance schemes, post office savings schemes, gold and however only few were aware 0f UTI.

 

Nasir and Khalid (2004) assessed behavior of saving and investment in Pakistan using appropriate econometric and statistical technique and attempted to generate a model on the basis of fundamental theories of saving and investment. They used data from 1971 to 2003, collected from Economic Survey of Pakistan. Ordinary Least Square Method was used as an estimation technique. The study concluded that Government Expenditures, Growth rate of Gross Domestic Product and Remittances Growth were positively and significantly influencing National Savings. Lewis A Sanders (2004) believes that people, irrespective of their location, have their own bias and react differently when investing in financial assets

 

Gavini and Athma (1999) found that social considerations, tax benefits, and provision for old age were the reasons cited for saving in urban areas, whereas to provide for old age was the main reason in rural areas. Among the post office schemes, Indira Vikas Patra (IVP), KVP and Post Office Recurring Deposit Account (PORD) were the most popular, in both urban and rural areas.

 

Objectives of the study

 

a) To analyze the profile of the salaried class investors.

b) To analyze the awareness level of salaried class investors towards the nature of investment held by investors

 

Methodology

 

The study is based on the data collected from the individual investors in Coimbatore district. Convenient sampling technique has been used in order to collect data from 1000 respondents which were collected for a period of 8 months i.e from December 2010 to July 2011through structured questionnaire. For the purpose of study Coimbatore district includes Valparai, Pollachi, Coimbatore and Metupalayam.

 

Results & Discussion

 

Profile and awareness of salaried class investors:

 

The profile of sample investors has been discussed by taken into consideration their personal. The terms ‘Awareness’ is used to describe the awareness of investors about the existence of numerous avenues of saving and investments. In this study, the level of awareness of salaried class investors is measured through the construction of Awareness scale. Moreover, there is no fixed or ready-made method available to measure the awareness level. In order to quantify the awareness level, the researcher has indentified 17 components as investment channels and awareness scale has been constructed by awarding scores to the 17 components. Each components has been given one score in order to give equal importance to each avenue of investment. The indentified components and scores secured by them have been presented in It is observed from Table-1 that 83.0 percent sample investors recognized the Provident fund. It is followed by insurance product which was known to 69.2 percent of sample investors. 50.0 percent & 44.1 percent of sample investors known about the Gold jewellery and banking deposit. In order to know the different levels of awareness of respondents, awareness scores had been grouped into 3 categories, namely investors with high, medium and low level of awareness. For identity these levels of awareness, the researcher has made use of mean and standard deviation techniques. The mean and standard deviation are calculated from the collected data.

 

Low level awareness = 1-5.

Medium level awareness = 6 – 11.

High level awareness = 12-17.

 

According to the system devised, investors who scores 1-5 below to low awareness category. Those who belong scores between 6-11 belong to medium awareness category and scores between 12-17 have high awareness and Table-2 exhibits the three categories of investors with regard to awareness. It is ascertained that 81.2 percents had low level awareness, 17.4 had medium term awareness, and 14 percents sample investors had high level awareness.

 

TABLE-1

AWARENESS ON NATURE OF INVESTMENT

 

S.No

Investment

No. of investors

%

Rank

1.       

Provident fund

832

83.2

1

2.       

Insurance products

692

69.2

2

3.       

Gold and Jewellery

500

50.0

3

4.       

Deposits in commercial Bank

441

44.1

4

5.       

Postal saving

315

31.5

5

6.       

Agricultural Land

279

27.9

6

7.       

House property

250

25.0

7

8.       

Shares, debentures and bonds

161

16.1

8

9.       

Capital in own business

137

13.7

9

10.   

Vehicles

96

9.6

10

11.   

Urban land

79

7.9

11

12.   

Mutual funds

76

7.6

12

13.   

Chit funds

65

6.5

13

14.   

Pension fund

63

6.3

14

15.   

Plantation & Breeding

48

4.8

15

16.   

NSS/NCC

37

3.7

16

17

Unit in UTI

37

3.7

17

Source: Primary Data

 

TABLE: 2

LEVEL OF AWARENESS

 

S.No

Level of Awareness

No. of investors

Percent

1

Low

812

81.2

2

Medium

174

17.4

3

High

14

1.4

 

Total

1000

100

Source: Primary Data

 

TABLE:2 CHI-SQUARE ANALYSIS & ANOVA

 

VARIABLE

VARIABLE

TABLE VALUE

CALCULATE D VALUE

ANOVA

RESULTS

 

 

 

 

AWARENESS OF INVESTMENTS

Gender

5.991

1.665

 

Accepted

Age

2.614

 

.086

Accepted

Marital status

5.991

1.466

 

Accepted

Place of  Residence

5.991

6.296

 

Rejected

Education qualification

3.338

 

3.795

Accepted

No of earning member in the family

9.488

4.639

 

Rejected

No of dependent

3.801

 

14.322

Accepted

Monthly income

2.223

 

.373

Accepted

Monthly expenses

15.507

15.626

 

Rejected

Monthly investments

15.507

12.903

 

Accepted

 

 

 

 

 

 

 

 

 

 

 

 

 

 

TABLE: 3 Data on Personal Factors of the Investments

 

Personal factors

No of Respondent

Percentage

Low

Medium

High

Gender

 

Male

779

78

639

130

10

Female

221

22

173

44

4

Age

 

21-30

379

38

304

68

7

31-40

321

32

261

58

2

41-50

151

15

123

26

2

51-60

149

15

124

22

3

Marital status

 

Married

732

73

596

124

12

Unmarried

268

27

216

50

2

Place of Residence

 

 

Village

303

30

232

65

6

Town

697

70

580

109

8

Education Qualification

 

Higher Secondary

327

33

273

52

2

Degree

376

38

301

70

5

Post Graduates

133

13

97

31

5

Professional

107

11

91

14

2

Others

57

5

50

7

-

Earning Member in the Family

 

One

622

62

515

101

6

Two

243

24

190

47

6

Three & above

135

14

107

26

2

Number  of dependent

 

None

34

3

20

10

4

1-2

127

13

84

37

6

3-4

662

66

551

108

3

5&above

177

18

157

19

1

Monthly income

 

<10,000

52

5.2

41

9

2

10000-15000

496

50

405

86

5

15000-20000

327

32

268

53

6

20000-25000

99

9.9

79

19

1

25000-30000

19

1.9

14

5

-

> 30000

7

1

5

2

-

Monthly Expenses

 

Less than 5000

98

9.8

72

21

5

5000-10000

576

57

473

95

8

10000-15000

277

28

228

48

1

15000-20000

46

5

36

10

-

20000-25000

3

0.3

3

-

-

>25,000

-

-

-

-

 

Monthly investment

 

Less than4000

184

18

147

32

5

4000-8000

694

69.4

571

115

8

8000-12000

103

10.3

83

19

1

12000-16000

16

2.0

10

6

-

16000-20000

3

0.3

1

2

-

>20,000

-

-

-

-

-

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Sex and awareness level

 

It refers to the biological and physiological characteristics that define men and women. This analysis is made based on the gender it reveals that Male investor has 82.0% low level awareness and 16.7% investor has medium level awareness and 1.3% has high level awareness. Female investor has 78.3% low level awareness and 19.9% medium level awareness and 1.8% has high level awareness.

 

Age and awareness level

 

Age indicates the length of time that one has existed. During the time period are their aware about their investment for their future benefits. Table discuss that from 21-30 years of sample investors have 80.2% of low level awareness and 17.9% have medium level awareness and 1.8% high level awareness. And age between 31-40 have 81.3% of low level awareness and 18.1% have medium level and .6% high level awareness. From 41-51 years of sample investors have 81.5% low level awareness and 17.2% and 1.3% medium and high level awareness. Sample investors at the age of 51-60 have 83.2% of low level awareness and 14.8% and 2.0% of medium and high level awareness.

 

Marital status & awareness level

 

Marital Status indicates whether person married or unmarried. Unmarried investor can invest most of his earning for his future. But the married investor must spend his most of his earnings to the family for purchase of asset, children’s education and also retirement benefit etc. That married investor has 81.4% low level awareness and 16.9% investor has medium level awareness and 1.6% has high level awareness. Unmarried investor has 80.6% low level awareness and 18.7% medium level awareness and .7% has high level awareness.

 

Place of residence

 

Saving is income not spent or deferred consumption. Now-a-days rural people play a vital role in the investment they are interested to invest in various investment patterns. Table discuss that village investor has 76.6% low level awareness and 21.5% investor has medium level awareness and 2.0% has high level awareness. Town investor has 83.2% low level awareness and 15.6% medium level awareness and 1.1% has high level awareness.

 

Educational qualification and awareness level

 

Qualification of investors will impact in their savings and investment pattern. In recent trend education qualification in our economy are developed. The investors have more knowledge in the investment. Investors in different level of awareness by education qualification been classified it reveals that among the sample investor upto +2 83.5% of sample investor had low level 15.9% of sample investor had medium level awareness and .6% had high awareness level. The sample investor of Degree holders 80.1% had low level awareness 18.6% had medium level awareness and 1.3% had high level awareness. Investors of post graduate 72.9% had low level awareness and 23.3% had medium level and 3.8% had high level awareness. The professional investors had 85% of low level awareness and 13.1% had medium and 1.9% had high level awareness. Among the sample investors of other qualification had 87.7% of low level awareness and 12.3% had medium level awareness

 

Number of earnings and level of awareness

 

Today everybody is part of a working family. There’s no single model; it’s not the old stereotype of the male breadwinner with the wife at home taking care of the family and community needs. One number of earning member in family has 82.8% low level awareness and 16.2% investor has medium level awareness and 1.0% has high level awareness. Two number of earning members in family has 78.2% low level awareness and 19.3% medium level awareness and 2.5% has high level awareness.3 & above number of earning members in family has 79.3% low level awareness and 19.3% has medium level awareness and 1.5% has high level awareness.

 

No. of dependents and awareness level

 

One who depends, one who is sustained by another, or who relies on another for support of favor especially financial support?  So no of dependents of investor are considered as an important variable to find out its association with the level of awareness of investors and relevant data shows  that sample investor  of who have no dependent 58.8% had low level 29.4% of sample investor had medium level awareness and 11.8% of sample investors had high level awareness . The sample investor of 1-2 dependents 66.1% had low level awareness 29.1% had medium level awareness and 4.7% had high level awareness. Investors of 3-4 dependents 83.2% had low level awareness and 16.32% had medium level and .5% had high level awareness. The sample investors who had more than 5 dependents have 88.7% of low level awareness and 10.7% had medium and .6% had high level awareness.

 

Monthly income and level of awareness

 

Income is the consumption and savings opportunity gained by an entity within a specified time frame, which is generally expressed in monetary terms. However, for households and individuals, "income is the sum of all the wages, salaries, profits, interests’ payments, rents and other forms of earnings received. table it is ascertained that among the sample investor  of who earn monthly income less than Rs.10,000 78.8% had low level 17.3% of sample investor had medium level awareness and 3.8% of sample investors had high level awareness . The sample investors who earn Rs 10,000-15,000 81.7% had low level awareness 17.3% had medium level awareness and 1.0% had high level awareness. Sample investor who earn Rs.15,000-20,000 82.0% had low level awareness and 16.2% had medium level awareness and 1.8%had low level awareness. The sample investors who earn Rs 20,000- 25,000 79.8% of low level awareness and 19.2% had medium and 1.0% had high level awareness and the sample investor who earn monthly income of Rs 25,000- 30,000 73.7% of low level awareness and 26.3% of medium level awareness. The sample investor who earn more than 30,000 71.4% of low level awareness and 28.6% of medium level awareness

 

Monthly expenses and level of awareness

 

A portion of total support; the value of lodging plus food consumed in the home, utilities paid, and repairs made. The total is divided equally among all family members. Each member's share of household expenses is part of his or her total support. Sample investors monthly household expenses less than Rs.5000 73.5% had low level 21.4% of sample investor had medium level awareness and 5.1% of sample investors had high level awareness . The sample investors who monthly household expenses Rs 5000-10,000 82.1% had low level awareness 16.5% had medium level awareness and 1.4% had high level awareness. Sample investors monthly household expenses Rs.10,000-15,000 82.3% had low level awareness and 17.3% had medium level awareness and .4%had low level awareness. The sample investors who earn Rs 15,000- 20,000 78.3% of low level awareness and 21.7% had medium level awareness .The sample investor who monthly household expenses of Rs 20,000- 25,000 100% of low level awareness.

 

Monthly investment and level of awareness

 

Investment plan that requires an investor to deposit a specific amount of money on a monthly basis to be invested. It is ascertained from the table that among the sample investors monthly investment less than Rs.4000 79.9% had low level 17.4% of sample investor had medium level awareness and 2.7% of sample investors had high level awareness . The sample investors who monthly investment Rs 4000-8,000 82.3% had low level awareness 16.6% had medium level awareness and 1.2% had high level awareness. Sample investors monthly investment Rs.8,000-12,000 80.6% had low level awareness and 18.4% had medium level awareness and 1.0%had low level awareness. The sample investors monthly investment Rs 12,000- 16,000 62.5% of low level awareness and 37.5% had medium level awareness .The sample investor who monthly investment of Rs 16,000- 20,000 had 33.3% of low level awareness and 66.7% had medium level awareness.

 

Conclusion

 

The studies especially relevant for the salaried and business people the inside of how and investment pattern get affect by the Socio-Economic variables helps the targeted respondents to make out the investment pattern. This study thus certainly improves the investment pattern and their choice to meet of their future investment. Similar studies with diverse samples will help in understanding the investment awareness of the targeted respondents in a better level.  The main reason has been observed to be the lack of awareness of investors about the concept and working of the investment pattern. Moreover, as far as the Socio-Economic variables are concerned, age, gender, income, education and occupation have been found influencing the attitude of investors towards investment significant.

 

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