The Study of Investment Pattern(Ppt)

SPRIERZ CONSULTANTSSPRIERZ CONSULTANTS

THE STUDY OF INVESTMENT PATTERN

OF DIFFERENT SEGMENTS OF THE SOCIETY

IN AHMEDABAD

OBJECTIVE OF THE STUDYPRIMARY OBJECTIVE

• To conduct a survey and analyze different investment pattern of people of Ahmedabad.

SECONDARY OBJECTIVE• To study investment

decisions of different segments of the society& know the individual perception about it.

• To find out the extent to which the investors are ready to take risk.

• To compare cost effectiveness of different investment options.

INVESTMENTINVESTMENT IS THE EMPLOYMENT OF FUNDS WITH

THE AIM OF ACHIEVING ADDITIONAL INCOME OR GROWTH IN VALUE.

INVESTMENT

ADDITIONAL INCOME

FUNDS/FINANCE

TYPES OF INVESTMENT• CASH INVESTMENT• DEBT SECURITIES• STOCK• MUTUAL FUND• BULLION• REAL ESTATE• FOREX , etc.

CONCEPT OF INCOME, EXPENSES,SAVINGS & INVESTMENT

INCOME EXPENSES SAVINGS

SAVINGS INVESTMENTS→

TOP 10 INVESTMENTOPTIONS IN INDIA

• BANK FIXED DEPOSITS• INSURANCE POLICIES• NATIONAL SAVINGS CERTIFICATE• PUBLIC PROVIDENT FUND• SHARE MARKET• MUTUAL FUND• GOLD DEPOSIT SCHEME• REAL ESTATE• EQUITY• NON RESIDENT ORDINARY FUNDS

INVESTMENT PORTFOLIOAn Investment Portfolio is a mixture of

investment types all held simultaneously, and is a method of limiting the risk associated with

investing.

PORTFOLIO ITEMSPORTFOLIO MANAGEMENTAny item that is likely to

retain its value or produce a return can be included in

an investment portfolio

A Portfolio management refers to the science of analyzing the strengths, weakness, opportunities and threats for performing wide range of activities related to one’s portfolio for maximizing the return at a given risk.

DIVERSIFICATIONA risk management technique that mixes a wide

variety of investments within a portfolio.

DIVERSIFIED PORTFOLIODiversified portfolio greatly reduces risk while smoothing investment

returns by owning many securities across a wide range of industries.Diversification reduces about 70% of the total risk of investing.

THE TWO MAIN ADVANTAGES OF PORTFOLIO DIVERSIFICATION:

• It helps you minimize the potential of losing all your investment money if any sector or industry does poorly.

• It helps you maximize the potential of doing really well if any sector or industry does well.

WHY PEOPLE SAVE AND INVEST MONEY?

• Manage personal finance

• Retirement

• Tax advantage

GLOBAL SCENARIO

BullionBullion is defined as a bulk quantity of precious

metals consisting of gold, silver and others that can be assessed by weight and cast as a lump. Bullion is valued by its purity and mass rather than its face value which is applicable in the case of money.

Types of Bullion

Gold

Silver

Diamond

Platinum

TYPE Price

GoldGold Rs. 28000Rs. 28000

SilverSilver Rs. 51800Rs. 51800

DiamondDiamond Rs. 35000Rs. 35000

Platinum Platinum Rs. 22000Rs. 22000

Bullion Rate as on 16th January 2012

Forex The Foreign Exchange market, also referred to as the

"FOREX" or "Forex" or "Retail Forex" or "FX" or "Spot FX" or just "Spot" is the largest financial market in the world, with a volume of over $3.2 trillion a day. All these currencies are traded against the US dollar (USD).

What is traded on the Foreign Exchange market?

The simple answer is money. Forex trading is the simultaneous buying of one currency and the selling of another. Currencies are traded through a broker or dealer, and are traded in pairs.

USD ($)EUR (€)J PY (¥)GBP (£)CHF (Fr)CAD ($)HKD ($)SEK (kr)NZD ($)KRW (₩)SGD ($)NOK (kr)MXN ($)INR ( )

Mutual Funds

Mutual Fund is a trust that pools the savings of a number of investors who share a

common financial goal .

Working of Mutual Funds

Types of Mutual Funds

Structured

Open-Ended Close-Ended IntervalsDebt Fund Guilt Fund

Short Term Plan

Nature

Index Specific Sector

Tax Saving

Others

• Professional Management

Advantages

• Diversification

• Economies of Scale

Disadvantages• Costs

• Dilutions

• Taxes

Stock MarketStock Market or Share Market is one important constituent of capital market. Stock Exchange is an

organized market for the purchase and sale of industrial and financial security.

Features• Market for securities

• Transactions effected only

through members

• Association of person

• Working as per rules

FUNCTIONS• Encourage capital formation

• Continuous and ready market for securities

• Regulates company management

• Facilitates evaluation of securities.

Life InsuranceLife Insurance is a contract between an insurance

policy holder and an insurer, where the insurer promises to pay a designated beneficiary a sum of money upon the death of an insured person. The

policy holder typically pays a premium, either regularly or as a lump sum.

The advantage for the policy owner is peace of mind, in knowing that the death of the insured person will not result in financial hard ship for loved ones.

Life policies are legal contracts and the term of the contract describes the limitations of the insured events. Common examples are claims relating to suicides, fraud, war, riots and civil commotions.

Life based contracts tend to fall into two major categories.• Protection Policies: designed to provide a benefit in the

event of specified event, typically a lump sum amount.• Investment Policies: where the main objective is to

facilitate the growth of capital by regular or single premiums.

Types of Life Insurance

• Term insurance

• Money back life insurance policy

• Endowment insurance policy

• Whole life insurance policy

• Unit linked insurance policy

Post Office• Out of 155,000 post offices spread all over the country, 89% are in the rural

areas. Post offices in India play a vital role in the rural areas. They connect these rural areas with the rest of the country and also provide banking facilities.

• The modern postal service in India is more than 150years old. In 1854, the post office in the province of Sindh made postal history, when India became the first country to issue postage stamps.

• After independence the Indian government broadened the vision of the postal system, to reach the entire population of the country. Today Indian Postal system has a reach that ranges from Kanyakumari to Laddakh.

• Indian postal service provide many facilities like general or registered mail, parcel post, speed post, express post, ePost and EMS Speed Post. They also offer a number of post office savings scheme like National Savings Certificate, Kisan Vikas Patra, Recurring Deposits and Term Deposits.

The various post office schemes are:• Kisan Vikas Patra• Monthly Income Account• National Savings Certificate• Public Provident Fund• Recurring Deposit Account• Post Office Savings Account• Time Deposit Account

Real Estate• one of the most successful investment

phenomenon.• major part of investment is done by foreign

investors.• investment is done in both commercial and

residential sphere.• shortage of 26.53 million houses during the 11th

five year plan(2007-12) may result into a big investment opportunity.

• it produces relatively consistent total return that are hybrid of income and capital growth.

• (income return from real estate) = (rent payments received from tenants) – (cost of operating the property and outgoing mortgage.)

• In real estate income returns tend to be fairly stable and capital returns fluctuate more.

Types of Real Estate• Residential property

• Commercial property

• Agricultural land

Bank Deposits• Bank deposit means money placed into a banking

institution for safekeeping.• Bank deposits are made to deposit accounts such

as savings accounts, checking accounts and money market accounts at a banking institution.

• It is a liability owed by the bank to the depositor.• the total amount of fixed deposits with banks in

India is rs. 35,68,435 crores as per RBI.• Bank deposits give medium return with low risk

which is a very safe method of investment.

Types of Bank Deposits

• Demand deposit

• Fixed deposit

• Recurring deposit

• Savings account

• Current account

Analysis & Interpretation

AGE CLASSIFICATION

AGE CLASSIFICATION

INVESTORS

PERCENTAGE

BELOW 25 17 9%

26-35 42 21%

36-45 50 24%

46-55 44 22%

56 AND ABOVE

47 24%

TOTAL 200 100%

SAVINGS CLASSIFICATION

INVESTORS %

LESS THAN 10% 57 28%

10-25% 91 45%

25-40% 41 21%

40-55% 6 3%

55% AND ABOVE 5 3%

TOTAL 200 100%

PERCENTAGE OF INCOME PEOPLE SAVE

INVESTMENT OPTIONS

PREFERENCE %

BULLION 74 13%

MUTUAL FUND 37 6%

STOCK 55 10%

LIFE INSURANCE

114 20%

POST OFFICE 97 17%

FOREX TRADING

5 1%

REAL ESTATE 57 10%

BANK DEPOSIT 135 23%

100%

PREFERRED INVESTMENT OPTIONS

INVESTMENT OPTIONS PREFFERENCE %

BULLION 88 18%MUTUAL FUND 48 10%

STOCK 54 11%LIFE INSURANCE 52 10%

POST OFFICE 55 11%FOREX TRADING 16 3%

REAL ESTATE 95 18%BANK DEPOSIT 93 19%

TOTAL 100%

IF GIVEN RS.10 LAC, OPTIONS WHERE PEOPLE PREFER TO INVEST IN.

INVESTMENT OPTIONS\ OCCUPATIONS:

BUSINESS

SERVICE

RETIRED

HOUSEWIFE

SELF EMPLOY

EDBULLION 22 11 10 18 12

MUTUAL FUND 9 10 9 6 4STOCK 16 5 16 6 12

LIFE INSURANCE 28 22 22 19 21POST OFFICE 18 20 23 20 17

FOREX TRADING 2 0 0 0 2REAL ESTATE 24 10 7 5 10

BANK DEPOSIT 31 27 30 31 26

INVESTMENT PREFERENCE AMONG VARIOUS OCCUPATIONS

CHANGE IN

PRESENT INVESTME

NT

PREFFERENCE %

YES 70 36%

NO 124 62%

DEPENDS 3 2%

TOTAL 200 100%

DO PEOPLE WANT TO CHANGE THEIR INVESTMENT IN FUTURE?

RESEARCH METHODOLOGY

• Primary Data• Secondary Data• Period of Study• Type of research• Sampling Technique• Sample Size• Tools used for data analysis

LIMITATIONS

• The investment pattern analysis has been limited to only 200 investors.

• This study is conducted to analyze their pattern not all those factors that really matter while investing.

• It is conducted in Ahmedabad city. • An interpretation of this study is based on the assumption

that the respondents have given correct information. • The economy and industry are so wide and comprehensive

that it is difficult to encompass all the likely factors influencing the investors’ investment pattern in the given period of time.

• As the study has been limited to only 200, so there may be different perception level of respondent to invest.

• Besides the study has the limitation of time, place and resources.

FINDINGS

• The common thing we found out through our research that investors of all age group of Ahmedabad mainly invest in bank deposit and life insurance.

• The main purpose behind the investment of investors of Ahmedabad is safety and returns.

• We also have found that majority of investors of Ahmedabad save up to 10-25% of their income. Majority of investors invest for period of 1 to 5 years only.

• Mainly investor of Ahmedabad prefers advice of family and friends in investment decision and also some seeks advice of consultants and local brokers.

• We have observed that investors of Ahmedabad prefer low and moderate risk in investment.

• People of Ahmedabad are aware of the benefits of diversification of investment and so they tend to play safe.

• Investors of Ahmedabad are satisfied with their present investors and are not ready to change but only some prefer to change in future while some stays neutral and change as per the situation in future

• Mostly Bullion is preferred by house wife’s and business class people.• Stock is more preferred by retired and business class investors.• Forex is yet not been preferred by all, only business and self-employed class opt for that.• From the study we have observed that, business class investors tend to invest more than

the otherclass followed by retired class than by service and house wife and last rank goes to service class in Ahmedabad.

OBSERVATIONS

• Our grand project gave us an experience to work in a group of 10 people and also gain real life knowledge about investment through survey.

• Investment is part of our day to day life, and the experience gained in the sudy of investment pattern of different segments of society will surely help each one of us in future.

• Through the survey we got a chance to interact with people of various occupation and know their experience.

• The communication was easy with service class people and the people between age of 25-35years and retired class people. Some people were co-operative while some were quite uncomfortable filling up the questionnaire.

• We found it difficult to explain most of the housewife’s the purpose behind our survey and also explaining our topic to them.

• We observed that most of the people were not ready to disclose all the facts related to investment.

• From our survey we observed that people of Ahmedabad are clearly aware of different investment options and almost all have diversified investment pattern.

• We all finally got a platform to show our creativity and knowledge that we used in preparing this grand project be it for using Ms excel or Ms word.

SUGGESTIONSS - Straight ReturnI - Investment RisksM- Manageable InvestmentP - PersistentL - Learning ProcessE- Expanding The Investment

Conclusion• General Conclusion - Diversification• Specific Conclusion – Age wise Investment:o All age groupo Above 50o Young Investors