ABSTRACT other words, understanding the normal behaviour is important

ABSTRACTThis study analyzes the impact of socio demographic variables on the behavioural of investors towards investments. To achieve this, 405 respondents of Coimbatore city, having differentsocio Economic profiles were surveyed. Sevenbehavioural factors of investment were identified such as Cognitive Factor, AttitudeFactor, Herding Factor, Emotional Factor, Risk Factor, Economic Factor and MarketFactor and included for the study. The resultshighlight that age of investors has significant association with Herdingfactor and Risk factor, while gender of investors has significant associationwith Attitude and Economic factor.

It is evident from the study that annualindividual income of the investors does not have significant association withall the seven behavioural factors and also found that association between lifecycle stage of investors and Risk factor of retail investors.Key words:Behavioural factors, Socio-Demographic Characteristics, Retail Investors,Investment1. INTRODUCTIONInvestment Behaviour is a study of investor’s psychologicaltraits on their investment decisions. Behaviour may be a reflection of aninteraction of Cognitive and Emotional factors and can be captured moreeffectively using an approach that focuses on the interplay of differentdecision-making systems.

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Itis vital to study the effect of socio-demographic factors on the behaviouralfactors in order to understand and explain the investors’ decisions. In otherwords, understanding the normal behaviour is important for investment decisionmaking. This study aims to determine the influence of the socio-demographicfactors on the behavioural aspects of Investment decisions of retail investors.2.REVIEW OF LITERATUREIn the opinion of Iqbal Mahmood, Habib Ahmad & MansoorAnjum1 (2011)recognized an important area in the study of recent finance literature.

Its implicit objective is to discover and remedy the deviations from therational decision making in the investment process. They examined the role ofvarious socioeconomic, demographic and attitudinal factors affecting theinvestment decision of investors in the market. Shanmugsundaram.V andBalakrishnan.V2(2011) found that Investor decisions are influenced by psychological factorsand behavioural dimensions. Menu Verma3(2008) stated that investment choice depends on and is affected by thedemographic variables as well as by the personality types. Manish Mittal andVyas4(2008) has classified the Indian investors into different personalitytypes and explored the association between various demographic factors and theinvestment personality exhibited by the investors.

Meenakshi Chaturvedi and Shruti Khare5 (2012)studied on saving pattern and investment preferences of individual household inIndia that revealed the impact of age, education, occupation and income levelof the individual on investment. Sohani Islam6 (2012)had found that psychological factor is the most dominating influence uponinvestor’s decision making process and micro economic factor also haveinfluence on selecting investment securities. LingesiyaKengatharan7(2014) found out that there are four behavioural factors affecting theinvestment decisions of individual investors which are herding, heuristics,prospect and market. Godbole, & Arekar,8(2014) concluded that there are six important factors which affects theinvestment buying behaviour i.e. motives, risk & returns, opinions, marketinformation, benefits and security. 3 RESEARCH METHODOLOGYThis research has adopteddescriptive research design using interview method. This study is descriptivein nature because this study describes the characteristics of a particularindividual or a group and attempts to capture the characteristics of Investors,opinion, behaviour, Risk taking attitude, their awareness of Investmentopportunities and their Investment pattern of retail Investors.

The research was conducted in Coimbatore,which is a city in India. The data collection process took place duringthe period December 2012 to May 2013. The Data collection was done mainly through primary sources and alsosecondary sources. The primary data was collected through questionnaire method.The sampling techniques used forthe study is Non-Probabilistic Convenience sampling method.

Since the exactpopulation of salaried class Investors is not known exactly, the selection isleft to the researcher who is to select the sample. A sample size of 405Investors was personally interviewed and data was collected for thisstatistical study. 4 OBJECTIVES OF THE STUDY Following objective is framed for the study withregard to the above mentioned research questions: To study the impact of socio-demographic characteristics over the behavioural factors of retail investors. 5 RESEARCH HYPOTHESES Following hypotheses are developed afterreviewing the extant literature on socio-demographic profile and behaviouralfactors of retail investors Ha0:There is no significant association between the age group and the behavioural factors of retail investors. Hb0:There is no significant association between the gender and the behavioural factors of retail investors.

Hc0:There is no significant association between the individual annual income and the behavioural factors of retailinvestors. Hd0:There is no significant association between the marital status and the behavioural factors of retailinvestors. He0:There is no significant association between the Life cycle stage and the behavioural factors of retailinvestors. Hf0:There is no significant association between the family type and the behavioural factors of retail investors.  6.DATA ANALYSIS AND INTERPRETATIONThe instrumentused for this purpose is structured questionnaire. The reliability of thisquestionnaire was tested by calculating the Cronbach alpha which is anestablished method to work out the internal consistency.

Cronbach’s alpha isfound to be 0.892 for the internal scales questions. The measures included inthe study are above 0.60 which demonstrates good reliability.

Therefore theresults of reliability analysis confirmed that consistency is at an acceptablelevel for each factor. These indexes show that items included in the factors: Cognitive,Attitude, Herding, Emotional, Risk, Economic, and Market are reliable enoughfor further use. Cronbach’s alpha for each factor is given below.   Table No. 6.0:Results of Cronbach’s Alpha test Factors Identified No.

of Items Cronbach’s alpha Cognitive 7 0.757 Attitude 12 0.814 Herding 8 0.747 Emotional 7 0.694 Risk 8 0.782 Economic 8 0.

730 Market 6 0.660   Source: Computed fromPrimary dataTable6.1 Behavioural factors and socio-demographic profile of retail investors Socio-Demographic Profile Behavioural Factors Attitude Cognitive Herding Risk Economic Emotional Market Age group Chi-Square 4.533 1.

100 8.154 15.842 0.864 5.038 3.211 Sig. Value 0.209 0.

777 0.043* 0.001* 0.834 0.169 0.360 Gender Chi-Square 7.040 3.

225 1.084 0.530 5.506 0.124 1.771 Sig. Value 0.

008* 0.073 0.298 0.467 0.019* 0.725 0.183 Individual Annual Income Chi-Square 2.709 6.

159 11.917 9.515 4.

447 5.402 6.584 Sig. Value 0.844 0.406 0.064 0.

147 0.616 0.493 0.361 Marital Status Chi-Square 0.

318 0.063 2.292 4.454 0.709 2.

416 0.003 Sig. Value 0.573 0.802 0.

130 0.035* 0.400 0.120 0.958 Life cycle Chi-Square 3.110 3.789 7.

964 14.573 3.538 8.726 5.741 Sig.

Value 0.540 0.435 0.093 0.006* 0.

472 0.068 0.219 Family Type Chi-Square 4.109 1.123 7.045 2.916 1.

449 1.753 4.134 Sig. Value 0.128 0.

570 0.030* 0.233 0.484 0.

416 0.127 *   Significant association between thevariables     Source: Computed fromPrimary dataTable 6.2: The mean rank scores of Behaviouralfactors and Socio-demographic variables  Socio-Demographic Factors Behavioural Factors (Mean Rank) Attitude Cognitive Herding Risk Economic Emotional Market Age Group    (in years) 20 to 25 235.12 190.85 152.79 184.33 191.68 152.

14 182.97 26 – 30 195.76 195.12 189.27 155.05 214.43 217.48 187.

30 31 – 35 138.99 206.87 222.

00 209.88 181.78 198.70 213.04 > 35 211.07 217.

70 236.66 254.76 205.62 217.16 226.76 Gender Male 185.51 191.

60 211.68 199.13 187.70 206.

77 194.90 Female 249.85 235.08 186.

44 216.76 244.54 198.27 227.05 Individual Annual Income (Amount in Rs) 0 – 100000 200.

28 143.36 77.52 146.05 193.11 209.

67 173.83 100001 – 200000 197.23 207.23 191.96 217.

52 219.20 168.34 190.

74 200001 – 300000 221.89 230.38 216.48 201.

28 188.06 213.29 205.87 300001 – 400000 178.77 204.

97 205.76 171.93 228.95 218.95 260.06 400001 – 500000 200.28 185.

94 194.58 226.55 156.37 239.38 192.36 500001 – 600000 154.

72 91.39 127.23 65.70 209.06 188.

77 108.13 > 600000 230.63 184.76 287.98 259.49 229.

92 232.79 211.10 Marital Status Single 211.

53 207.52 184.87 177.23 215.

08 184.40 204.97 Married 198.95 201.93 218.63 224.29 196.34 218.

99 203.79 Divorcee 190.17 179.42 131.

64 165.98 120.82 192.86 158.60 Widow 150.26 126.28 189.

78 165.98 115.36 156.20 115.

78 Life cycle Single with financial burdens 212.25 209.20 182.32 170.

85 214.76 181.10 204.

36 Young couple without children 187.98 153.15 145.98 150.53 192.

89 179.20 128.52 Young family with childcare/ mortgage cost 173.47 206.30 229.31 215.

69 168.52 260.49 211.25 Mature family with peak earnings 231.78 239.31 237.27 275.

36 216.73 185.05 226.51 Preparing for retirement 215.04 189.38 237.55 252.89 226.

26 218.41 224.47 Family Type Nuclear 229.77 216.

66 233.54 224.47 218.13 220.92 228.

20 Joint 184.01 197.02 174.80 192.11 191.00 191.35 189.

88 Source: Computedfrom Primary dataHa0:There is no significant association between the age group and the behavioural factors of retail investors. From the Table No.6.

1, it is inferred that among the seven behavioural factors, the p value of Herdingfactor is 0.043 and p value of Risk factor is 0.001, both the values are lesserthan 0.05 (5 percent level of significance), therefore the null hypothesis isrejected.

Hence it is concluded that among the seven behavioural factors, thereis significant association between Herding factor and Risk factor on age ofretail investors.  It is inferred fromthe Table No. 6.2, the investors of age group greater than 35 years are highlyinfluenced by Herding factor (Mean Score: 236.66) and Risk factor (Mean Score:254.76) associated to the investment.Hb0: There is no significantassociation between the gender and thebehavioural factors of retail investors. From the Table No.

6.1, it is inferred that among the seven behavioural factors, the p value of Attitudefactor is 0.008 and Economic factor is 0.019, both the values are lesser than0.05 (5 percent level of significance), therefore the null hypothesis isrejected. Hence it is concluded that among the seven behavioural factors, thereis significant association between Attitude factor and Economic factor ongender of retail investors. It is inferred from the Table No. 6.

2, the femaleinvestors are highly influenced by their Attitude factor (Mean Score: 249.85)and their Economic factor (Mean Score: 244.54) associated to the investment.Hc0: There is nosignificant association between theindividual annual income and the behavioural factors of retailinvestors. From the Table No.6.1, it is inferred that among the seven behavioural factors, the p value of Attitudefactor is 0.

844, Cognitive factor is 0.406, Herding factor is 0.064, Riskfactor is 0.

147, Economic factor is 0.616, Emotional factor is 0.493 and Marketfactor is 0.361. It is inferred that all the p values of behavioural factorsare greater than 0.05 (5 percent level of significance), hence the nullhypothesis is accepted. It is concluded that all the seven behavioural factorsdo not have significant association with their annual individual income ofretail investors. Hd0: There is no significantassociation between the marital statusand the behavioural factors of retail investors.

From the Table No.6.1, it is inferred that among the seven behavioural factors, the p value of Riskfactor is 0.035 is lesser than 0.05 (5 percent level of significance),therefore the null hypothesis is rejected. Hence it is concluded that among theseven behavioural factors, there is significant association between Risk factorand marital status of retail investors. It is inferred from the Table No. 6.

2,the married investors are highly influenced by their Risk factor (Mean Score:224.29) associated to the investment.He0: There is no significantassociation between the Life cyclestage and the behavioural factors of retail investors. From the Table No.

6.1, it is inferred that among the seven behavioural factors, the p value of Riskfactor is 0.006 is lesser than 0.05 (5 percent level of significance),therefore the null hypothesis is rejected. Hence it is concluded that among theseven behavioural factors, there is significant association between Risk factorand Life cycle stage of retail investors. It is inferred from the Table No. 6.2,the investors who are in mature family with peak earnings are highly influencedby their Risk factor (Mean Score: 275.

36) associated to the investment.Hf0: There is nosignificant association between thefamily type and the behavioural factors of retail investors. From the Table No.

6.1, it is inferred that among the seven behavioural factors, the p value of Herdingfactor is 0.030 is lesser than 0.

05 (5 percent level of significance),therefore the null hypothesis is rejected. Hence it is concluded that among theseven behavioural factors, there is significant association between Herdingfactor and family type of retail investors. It is inferred from the Table No. 6.2,the investors who are in nuclear family type are highly influenced by their Herdingfactor (Mean Score: 233.54) associated to the investment.   7.FINDINGS OF THE STUDY Among the seven behavioural factors, there is significant association between Herding factor, Risk factor on age of retail investors.

It is inferred that investors of age group greater than 35 years are highly influenced by Herding and Risk factor associated to the investment. There is significant association between Attitude factors, Economic factor on gender of retail investors. It is inferred that female investors are highly influenced by their Attitude and their Economic factor associated to the investment. All the seven behavioural factors do not have significant association with their annual individual income of retail investors. There is significant association between Risk factor and marital status of retail investors. It is inferred that married investors are highly influenced by their Risk factor associated to the investment. There is significant association between Risk factor and Life cycle stage of retail investors. The investors who are in mature family with peak earnings are highly influenced by the Risk factor associated to the investment.

There is significant association between Herding factor and family type of retail investors. It is inferred that investors who live in nuclear family type are highly influenced by their Herding factor associated to the investment.  8.

CONCLUSION OF THE STUDYIt is evidentfrom the study that socio-demographic profile such as age, gender, martialstatus, life cycle stage and family type of investors has association withtheir behavioural aspects of investment. It is essential to note that annualincome of retail income do not have association with heir behavioural aspectsof investment. Age of retail investors is influenced by Herding and Risk factorassociated to the investment. Gender of investors is influenced by their Attitudeand their Economic factor associated to the investment. Life cycle of investorshas influence on their investment related Risk factor. There is associationbetween family type of retail investors and Herding factor.

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