Effect of Demographic Factors on Investment Decision Making Process

Abstract

Title: Effect of demographic Factors on investment decision making Issues of study: Value maximization of assets and cash inflows is traditionally considered as major interest to stakeholders. Investors on the basis of demographics and tolerance to the risk choose to put their savings to increase their present and future income inflows. However choosing between options and making investment final decision depends upon the demographics of individual. The investment options chosen are bifurcated in to high and low risk investment options and the preference on the basis age, gender, marital status, occupation, and income level, was a point of concern in this study Purpose: To be able to make a good investment decision, it is necessary to analyze investment decision-making process and, to draw an outcome about what actually cause an investor to make an investment decision was the purpose of study. The main focus of this study is on investment decision-making trends This study also discuss other variables which have positive effect on one's aptitude to choose an option and let go other such as financial literacy, which lead towards making investment decision. Method: The thesis is based on both literature studies and empirical research. The study identifies most relevant factor that contributes to make investment decision. Keeping in view each factor as a variable, its outcome on investment decision making on the basis of risk were evaluated. By combining the findings and results, a conclusion followed to link the results together Conclusion: The conclusion was drawn based on the results, most of the investors like to invest in secured or with minimum risk options like real estate, investment option with fixed rate of return and gold were preferred. However investment trend in stock exchange, and options with high level of risk was avoided by investors. Since level of risk differentiate an individual from risk averse to risk seeker, the study also identifies the age and gender having relation with investment decision making. Moreover choosing option or portfolio of investment also help to can diversify the risks of most uncertain a investment alternative