An elucidation of investment preferences and investment objectives of individual stock investors of punjab

Abstract

The present paper is an attempt to have an insight  into the influence of five key attributes that is Safety of principal, Liquidity, Stability of Income,  Capital Growth and inflation resistance on the  investment decisions of individual stock investors  of Punjab while choosing a particular investment  and also identifies their major investment  objectives. Additionally, the study gauges if there is  any significant difference in the investment objectives of investors across their age groups.  A  pre-tested, well structured questionnaire was  administered personally to 200 individual stock  investors in Punjab and their responses were  sought in terms of frequencies, percentages and  weighted average scores. Chi-square test has been  applied to test the difference between investment  objectives across age groups. Gold is found as the  highly preferred investment among individual  investors in Punjab for four attributes that is  safety of principal, liquidity, capital growth and  inflation resistance revealing that they consider  gold as most effective investment which is better  on each of the above mentioned attributes than all  the other potential investments. However,  securities market is second highly preferred  investment for three attributes that is liquidity,  capital growth and inflation resistance but as far  as attributes such as safety of principal and  stability of income are concerned, bank fixed  deposits is the second most preferred investment  by individual stock investors for these attributes.  Retirement planning is found as the major objective of individual stock investors of Punjab  for making investments. The above findings will  be helpful for the financial service providers in  offering more effective advice to the investors by  understanding their current stated investment  objectives and the importance of key attributes to  them while choosing among various investment  options.