A JOURNAL OF COMPOSITION THEORY ISSN : 0731-6755

A STUDY ON PREFERRED INVESTMENT AVENUES AMONG

SALARIED PEOPLE

C.GEETHA
Ph.D Research Scholar, PG & Research Department of Commerce,
Jamal Mohamed College (Autonomous), Tiruchirappalli

Dr. M. MARIMUTHU
Assistant Professor & Research Advisor, PG & Research Department of Commerce,
Jamal Mohamed College (Autonomous), Tiruchirappalli

ABSTRACT
Investment is the employment of funds on assets with the aim of earning income or
capital appreciation. Investment is the most important things today. People are earning more,
but they do not know where, when and how to invest it. A proper understanding of money, its
value, the available avenues for investment, various financial institutions, the rate of
return/risk etc., are essential to successfully manage one’s finance for achieving life’s goal.
The stock market is one of the most popular investing places because of its expected high
profit. Traditionally, technical analysis approach, that predicts stock prices based on historical
prices and volume, basic concepts of trends, price patterns and oscillators, is commonly used
by stock investors to aid investment decisions. The results highlight that certain factors like
education level, awareness about the current financial system, age of investors etc… make
significant impact while deciding the investment avenues. Actually, the present study
identifies the preferred investment avenues among the individual investors using self
assessment test. The data has been analyzed using percentage and chi-square test with the
help of statistical software. There are large numbers of investment opportunities available
today. In this paper is going to briefly examine how the salaried peoples managing their
investments. In recent years, most of the researchers have been concentrating their research
work on the future prediction of share market prices by using Neural Networks. But, in this
paper we newly propose a methodology in which the neural network is applied to the
investor’s financial decision making to invest all type of shares irrespective of the high / low
index value of the scripts, in a continuous time frame work and further it is further extended
to obtain the expected return on investment through the Neural Networks and finally it is
compared with the actual value. The proposed network has been tested with stock data
obtained from the Indian Share Market BSE Index. Finally, the design, implementation and
performance of the proposed neural network are described.
Key Words: Investment,Share Markrt,Financial System

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INTRODUCTION
The developing countries like India face the enormous task of finding sufficient
capital in their development efforts. Most of these countries find it difficult to get out of the
vicious circle of poverty of low income, low saving, low investment, low employment etc.
With high capital output ratio, India needs very high rates of investments to make a leap
forward in her efforts of attaining high levels of growth. Since the beginning of planning, the
emphasis was on investment as the primary instruments of economic growth and increase in
national income. In order to have production as per target, investment was considered the
crucial determinant and capital formation had to be supported by appropriate volume of
saving. Capital is a crucial factor in the development of an economy. The pace of economic
development is conditioned, among other things, by the rate of capital formation. And capital
formation is conditioned by the mobilization and channelization of investible funds.
The role of the financial system is to channel funds from surplus sectors to deficit
sectors. Facilitating such flows on a national level increases the level of investment and
effective demand and thus accelerates economic development. The people has to choose
Proper Avenue among them, depending upon his specific need, risk preference, and return
expected Investment avenues can broadly categories under the following heads.
1. Equity 2.FI Bonds 3.Corporate Debenture 4. Company Fixed 5. Bank Fixed 6.PPF 7.Life
Insurance 8.Post Office-NSC 9.Gold/Silver 10.Real Estate 11.Mutual Fund 12. Others
Equity:
Equity is one of the most risky areas. But, at the same time this is also a place where an
investor can earn high rates of returns that will push up the returns of the entire portfolio.
There is a need for the investor to separate the speculation from the investment. Investment in
equities can be made directly by the purchase of shares from the market or it can be done
through the mutual fund route, whereby the investor buys the mutual fund units and the fund
in turn buys equity shares for its portfolio.
Debt:
Debt is a route that most people will know and have the necessary experience of. There is a
wide range of debt instruments that are present from bank fixed deposits to company fixed
deposits. Debt is simple as the investor ill earn at a fixed percentage of the investment, which
will then be returned to the investor at the time of maturity or redemption of the investment.
Mutual Funds:

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This is an emerging area for investment and there is a large variety of schemes in the market
to suit the requirements of a large number of people. In finance, in general, you can think of
equity as ownership in any asset after all debts associated with that asset are paid off. For
example, a car or house with no outstanding debt is considered the owner's equity because he
or she can readily sell the item for cash. Stocks are equity because they represent ownership
in a company.
Corporate Debenture:
Corporate debentures are normally backed by the reputation and general creditworthiness of
the issuing company. It is a type of debt instrument that is not covered by the security of
physical assets or collateral. Debentures are a method of raising credit for the company and
although the money thus raised is considered a part of the company's capital structure, it is
not part of the share capital.
Company Fixed Deposit:
Company fixed deposit is the deposit placed by investors with companies for a fixed term
carrying a prescribed rate of interest. Company FDs are primarily meant for conservative
investors who don't wish to take the risk of vagaries of the stock market. But experts say the
due diligence that an investor should undertake is similar to that before buying shares.
Fixed Deposits:
Fixed Deposits with Banks are also referred to as term deposits. Minimum investment period
for bank FDs is 30 days. Deposits in banks are very safe because of the regulations of RBI
and the guarantee provided by the deposit insurance corporation. The interest rate on fixed
deposits varies with term of the deposits Bank deposits enjoy exceptionally high liquidity.
Loans can raised against bank deposits.
Post Office Savings:
Post Office Monthly Income Scheme is a low risk saving instrument, which can be availed
through any Post Office The interest rate on deposits is slightly higher than banks. The
interest is calculated half yearly and paid yearly
Life Insurance Policies:
Insurance companies offer many investment schemes to investors. These schemes promote
saving and additionally provide insurance cover. L1C is the largest life insurance company in
India. Insurance policies, while catering to the risk compensation to be faced in the future by
investor, also have the advantage of earning a reasonable interest on their investment
insurance premiums.
Public Provident Fund (Ppf):

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A long term savings instrument with a maturity of 15 years. A PPF account can be opened
through a nationalized bank at anytime during the year and is open all through the year for
depositing money. Tax benefits can be availed for the amount invested and interest accrued is
tax-free. A withdrawal is permissible every year from the seventh financial year of the date of
opening of the account
Real Estate:
Investment in real estate also made when the expected returns are very attractive. Buying
property is an equally strenuous investment decisions. Real estate investment is often linked
with the future development plans of the location. At present investment in real assets is
booming there are various investment source are available for investment which are directly
or indirectly investing real estate. In addition to this, the more affluent investors are likely to
be interested in other type of real estate, like commercial property, agricultural land, semi
urban land, and resorts.
Gold/ Silver /Others:
The bullion offers investment opportunity in the form of gold, silver, art objects (paintings
,antiques), precious stones and other metals (precious objects), specific categories of metals
are traded in the metal exchange.
2. OBJECTIVES AND SCOPE OF THE STUDY:
1. To study the investment preference among salaried people working in different
sectors in Tamil Nadu, India.
2. To know the factor that influencing investment behavior of the peoples.
3. To analyze the investment pattern among the salaried investors.
4. To find the problems facing by the investors.
5. To know the mode of investments of the salaried respondents in various investment
avenues.
SCOPE OF THE STUDY:
This study is focusing on the preference of Investments by salaried class people and it
will be helpful to identify the better investment options in the market.

3. REVIEW OF LITERATURE:
Behavioral finance is a new emerging science that studies the irrational behavior of
the people. Avinash Kumar Singh (2015) The study entitled "Investment Pattern of People"

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has been undertaken with the objective, to analyze the investment pattern of people in
Bangalore city and Bhubaneswar analysis of the study was undertaken with the help of
survey conducted. All the age groups give more important to invest in equity & except people
those who are above 50 give important to insurance, fixed deposits and tax saving benefits.
Generally those investors who are invested in equity, are personally follow the stock market
frequently i.e. in daily basis.
Sudalaimuthu and senthil kumar (2017) Mutual fund is the one of investment
avenues the researcher research in this area about investors perception towards mutual fund
investments has been analyzed effectively taking into account the investors reference towards
the mutual fund sector, scheme type, purchase of mutual fund units, level of risks undertaken
by investors, source of information about the market value of the units, investors opinion on
factors influenced to invest in mutual funds, the investors satisfaction level towards various
motivating factors, source of awareness of mutual fund schemes, types of plan held by the
investors, awareness of risk category by investors, problems faced by mutual fund investors.
Running a successful mutual fund requires complete understanding of the peculiarities of the
Indian Stock Market and also the awareness of the small investor.
4. RESEARCH METHODOLOGY:
This part explain the methodology used in this study. The methodology includes data
and sources of data, sample size, area of the study and framework of analysis. The study is
based on primary and secondary data. Primary data have been collected from100 respondents
through a structure questionnaire covering salaried peoples of Tamil Nadu, India. The
secondary data have been collected from various books, magazine, journals, news papers and
websites. The samples sizes of 100 respondents were taken for the research work among
Tamil Nadu, India. The sampling technique followed in this study is probability sampling.
Simple random techniques are used to select the respondent from the available database. In
order to analyze the collected data, the following tools were used. Simple percentage
analysis: it states the frequency and percentage of the customers profile, attitude and opinion
regarding peoples.

ANALYSIS AND INTERPRETATION

ANALYSIS OF INVESTMENT PATTERN IN SALARIED PEOPLES
Variable respondents % Variable respondents %

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Gender Occupation
Male 74 74 Government employee 38 38
Female 26 26 Private Employee 62 62
Age Annual Income
Below 25 10 10 Below 100000 31 31
25-35 24 24 100000-200000 46 46
36-45 47 47 200001-300000 14 14
46-55 11 11 300001-400000 06 06
Above 55 08 08 Above 400000 03 03
Percentage of Savings Basis of Investment Objectives
Below 10 34 34 High Return 24 24
10-20 36 36 Regular income 18 18
21-30 08 08 Tax Saving 23 23
31-40 12 12 Capital Appreciation 11 11
Above 40 10 10 Safety 24 24
Investment Reference Group
Mutual Funds 10 10 Family Member 22 22
Bank Deposits 30 30 Friends 16 16
Shares 08 08 Auditor 07 07
Post Office 13 13 Financial consultant 05 05
Insurance 21 21 Advertisement 21 21
Gold / real estate 18 18 By self 29 29
Investment Frequency Percentage of Investment Product
Monthly 10 10 Mutual funds 10 10
Quarterly 36 36 Bank deposits 20 20
Half yearly 24 24 Shares 07 07
annually 30 30 Post office savings 40 40
Insurance 15 15
Gold /real estate 08 08
Purpose Of Savings Sort Of Investment Preferred
Wealth creation 10 10 Long term 23 23
Future needs 42 42 Medium term 49 49
Children’s 38 38 Short term 28 28
education
House buildings 06 06 Satisfaction Level of Investment
Marriage 04 04 Very good 59 59
purposes
Marital Status Satisfactory 22 22
Married 70 70 poor 19 19
Single 30 30

TABLE SHOWS THAT INVESTORS (SALARIED CLAUS) PREFERENCE

A Study on Preferred Investment Avenues among

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Salaried Peoples in Tamil Nadu, India

Investment Frequency Percentage Cumulative
options percentage
Insurance 40 40 40
Fixed deposits 24 24 64
Real estates 16 16 80
Mutual fund 12 12 92
Gold 08 08 100

ANALYSIS OF INVESTMENT PATTERN:

 The analysis shows that insurance is the preferred investment avenues for salaried
class peoples. 40% of the respondents’ choices are insurance.
 From the percentage analysis it is inferred that 74% of the respondents are male and
26% are female.
 24% of respondent’s age group lies between 25-35 and 8% of age groups are above
55. 70% of respondents are married and 30% are single.
 38% of respondents are government employee and 62% are private employees. 46%
of respondents are lies 100000-200000 income group and 6% are belongs to 300001-
400000 income group.
 36% of respondents’ percentage of saving from their salary is 10- 20 and 10% are
above 40. 30% of respondents are like to invest in bank deposits and 18% are like to
invest in Gold / Real-estate.
 24% of respondents’ investment objective is safety and 23% of respondents
investment objective is tax saving. 36% of respondents’ investment behavior is
frequency in nature like investment in quarterly and 24% frequency investment in half
yearly.
 42% of respondents’ saving purpose is for future needs and 06% of respondents’
saving purpose is for house building. 29% of respondents are self decision makers in
choosing investment option and 21% are referring the advertisement.
 49% of respondents prefer medium term and 28% are choosing short term. 20% of
respondents are like to invest in bank deposit and 10% are likes to invest in shares.
 22% of respondents are satisfactory on their investment and 19% of respondents’
satisfaction is poor on their investment.
CONCLUSION

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The study on preferred investment choices has been undertaken with the objective, to
analyze the investment choice of salaried class in Tamil Nadu, India. Analysis of the study
was undertaken with the help of survey conducted. After analysis and interpretation of data it
is concluded that in Tamil Nadu, India respondents are medium aware about various
investment choices but they do not know aware about stock market, equity, bond and
debentures. The study is conducted by taking a limited number of sample sizes which is
stated earlier. And this study reflects the perceptions of those respondents who are residing in
Tamil Nadu, India. There might be a chance that the perceptions of the respondents of
different are varied due to diversity in social life, living pattern, income level etc. All the age
groups give more important to invest in Insurance and bank deposit. Income level of a
respondent is an important factor which affects portfolio of the respondent. Middle age
group, Lower income level groups respondents are preferred to invest in Insurance and bank
deposit rather than any other investment avenues. In Tamil Nadu, India respondents are more
aware about various investment avenues like Insurance, bank deposits, small savings like post
office savings etc. For that awareness program has to be conducted by Stock Broking firms,
because most of the respondents unaware about these new services about stock market.
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1. Bruner.R.F.,(2007), Case Studies in Finance, 5th Edition, Tata McGraw Hill, New
Delhi-8. Prasanna Chandra, (2006), Financial Management Theory and Practice, 6th
Edition, TataMcGraw Hill.,
2. Khan & Jain, (2005), Financial Management, 3rd edition, Tata McGraw- Hill
Publishing., Donald E Fischer, Ronald J Jordan., (1995), Security Analysis and
Portfolio Management, Prentice Hall
3. Openiyi, F.O. 1982. Saving Investment Behaviour of Farm Household in Ikale and
Ilaje/Ese-Odo LGA of Ondo State, Nigeria. Unpublished B. Agric. Project Report.
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4. Ayanwale, A.B. and A. S. Bamire. 2000. ‘‘Rural income, savings and investment
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5. Richard J Thaler, (1999), ‘Mental Accounting Matters’, Journal of Behavioral
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6. Slovic, P. (1972). ‘Psychological study of human judgement: Implications for
investment decision making’, Journal of Finance, 27:779-801.

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7. Kothari, C.R., (2004) Research Methodology-Methods and techniques, New

Ageinternaional publishers, New Delhi.
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