Factors Affecting Individual’s Equity Investment Decision

Topics: Stock market, Stock, Risk Pages: 16 (4137 words) Published: April 9, 2013
Factors Affecting Individual’s Equity Investment Decision


"We would like to extend our sincere gratitude to our Professor and guide Mr. Surya Dev for his guidance, valuable comments and support throughout this project.

We would also like to thank Prof. (Dr.) C.K. Dash, for the valuable advice and support he has given us with motivation to do research on the topic. We appreciate all the help extended by him.

Finally we would like to thank all the survey respondents for expressing their opinions on the factors that affect while taking an investment decision, which helped us in coming up with valuable facts and figures. We hope the conclusions drawn in this report will assist further surveyors in future or any developer and would able to understand the factors affecting the purchase decision in the Market.

Executive Summary

This study was to survey the dynamics that affect an individual’s Equity investment decision. It was requested by Prof. (Dr.) C. K. Dash. It was requested on 25th March 2013. The investigation was done by Padmanav Sahoo (12DF010), Deepika Patra (12DF011), Bharat Kumar Sahoo (12DF012) and Nikita Sundarka (12DF013).

The main findings were that the Past Performance and Current Economic indicators got High Priority. Individuals look up to the past performance of the stock before investing in it. The past performance depicts the raise or downfall in the price of the stock to which Individuals react much faster. The past performance depicts the raise in the price of the stock. And the Current news affects the share price of a concern or a particular sector or group of sector act as an indicator to invest for an individual. The release of budget, affect the market. Investors put in their money in the sectors which has positive changes in it. Thus the Past Performance and Current Economic indicators affect an Individual’s decision and were given high priority and individuals react to it much faster than any other factor.

Reputation of the Firm, feeling For Firm’s product, Affordability of share, Performance of benchmark, 52 week High/Low, Earning of a Firm, Influence of Family, Friends & colleagues, Data in reports & Prospectus, Risk minimization, Diversification in Portfolio, Projects about to be executed, Beta of the firm, Peer group’s stock price hold Moderate Priority as Factors that influence an Individual’s Investment Decision.

Traditionally, only the wealthy could afford a broker and access the stock market. The internet triggered an explosion of discount brokers, which allow investors to trade at a lower cost, but don't provide personalized advice. Because of discount brokers, almost anybody can afford to invest in the market. Individuals having less of knowledge about investment preferred Brokers. They take recommendations from brokers to know how to invest, when to invest and in which to invest. But in the Study we find out that brokers have lost their impact. The stock Broker’s Recommendation turned out to be least preferred. It has being agreed with Least Priority area.

It was concluded that factors affecting individual’s decision on equity investment are the Past performance of the firm along with the current economic indicators. And in this day and age the brokers are trailing the grasp they had on the investors as their guide while investing.

The recommendations are that the technical factors like beta of the firm, 52 week High/low should be considered before making an investment. Investors should diversify their portfolio so that their Risk is minimized.

1. Introduction

This report has been written to analysis the Factors Affecting an Individual’s Equity Investment Decision. It was requested by Prof. (Dr.) C. K. Dash. It was requested on 25th March 2013.

The main objective of this study is to find out the factors which affect the individual’s equity investment decisions. As in stock market risk is...

References: Fishman, T.C. and Kerson, K. (2000), “To buy or not to buy”, Esquire, Vol. 134 No. 2, p. 36.
Adair, A.S., Berry J.N. and Mc Greal, W.S. (1994), “Investment decision-making: A behavioral perspective ' ', Journal of Property Finance, Vol. 5 No. 4, pp. 32-42.
Kim Hinag Liow, Muhamad Faishal Ibrahim and Qiong Huang, (2006), “Macroeconomic risk influences on the property stock market”, Journal of Property Investment and Finance, Vol 24, No.4 ,2006.
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