Understanding Indian retail investors' stock investment behaviour: an empirical study

Chhavi Mehta and Neena Sondhi

International Journal of Management Practice, 2016, vol. 9, issue 1, 4-23

Abstract: The study was conducted among adult Indian investors, who capitalise their savings in the stock market. An online and physical form survey was conducted among 394 retail investors across major metros and mini-metros in India. The investor group was divided on the basis of their usage pattern into low stock investors (≤ 40% of their savings in stocks) and high stock investors (> 40% in stocks). The two groups were compared with regard to their demographics, trading, investing and monitoring patterns. A significant and robust logit regression model was derived on the basis of demographic variables as well as key decision criteria like liquidity, capital appreciation, higher returns, availability of funds and the opportunity of flexibility and experimentation. The high investor group was older, more educated and had a larger and diverse investment portfolio as compared to the low investor. The high investor group makes more informed and consistent trading at the stock market.

Keywords: stock market investments; investor motivation; investor behaviour; India; customer finance; logit regression modelling; investment practices; investment management; stock markets; retail investors; demographics; trading patterns; investing patterns; monitoring patterns; liquidity; capital appreciation; higher returns; fund availability . (search for similar items in EconPapers)
Date: 2016
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