A PROJECT ON

“STUDY ON SAVING & INVESTMENT”

SUBMITTED TO

LAXMAN DEVRAM SONAWANE COLLEGE

COMPLETION OF THE DEGREE OF MASTER IN COMMERCE

(ADVANCED ACCOUNTANCY)
SEMESTER 4 (2021-22)
UNDER THE FACULTY OF COMMERCE

SUBMITTED BY:

PANKAJ GORAKH CHAUDHARI

ROLL NO 116

M.COM PART II

UNDER THE GUIDANCE OF

PROFESSOR MRS SMITA V. JADHAV

LAXMAN DEVRAM SONAWANE COLLEGE

ARTS, SCIENCE AND COMMERCE
OPPOSITE OF FIRE STATION, NEAR DURGADI KILLA
KALYAN (W)- 421301
SEM 4 (2021-22)

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 CERTIFICATE

This is to certify that MR. PANKAJ GORAKH CHAUDHARI , ( Roll No.

116) has worked and duly completed her Project Work for the degree of
Master in Commerce under the Faculty of Commerce in the subject of
(ADVANCED ACCOUNTANCY) and his project is entitled , “STUDY ON
SAVING & INVESTMENT” under my supervision .

It is his own work and facts reported by her personal findings and
investigations.

External Examiner
Name And

Signature Of

Guiding

Teacher

Date Of Submission:

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 DECLARATION BY LEARNER

I the undersigned MR. PANKAJ GORAKH CHAUDHARI (Roll No.

116 ) here by, declare that the work embodied in this project work
titled “STUDY ON SAVING & INVESTMENT” forms my own
contribution to the research work carried out under the guidance of
Prof. Smita V. Jadhav is a result of my own research work and has not
been previously submitted to any other University for any other Degree/
Diploma to this or any other University.

Wherever reference has been made to previous works of others, it has

been clearly indicated as such and included in the bibliography.

I, here by further declare that all information of this document has

been obtained and presented in accordance with academic rules and
ethicalconduct.

Name and
Signature of
the learner

Certified by
Name and signature of the Guiding Teacher

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 ACKNOWLEDGEMENT

To list who all have helped me is difficult because they are so

numerous and the depth is so enormous.

I would like to acknowledge the following as being idealistic channels

and fresh dimensions in the completion of this project.

I take this opportunity to thank the University of Mumbai for giving

me chance to do this project.

I would like to thank my Principal , Ms. Annie Antony for providing the
necessary facilities required for completion of this project.
I take this opportunity to thank our Coordinator Prof. Dr. Kesar
Lalchandani, for her moralsupport and guidance.

I would also like to express my sincere gratitudetowards my project guide

Prof. Smita V. Jadhav whose guidance and care made the project
successful.

I would like to thank my College Library , for having provided various

reference books and magazines related to my project.

Lastly , I would like to thank each and every person who directly or
indirectly helped me in the completion of the project especially my
Parents and Peers who supported me throughout my project.

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 INDEX

Description
1 Introduction
1.1 Introduction
1.2 Savings
1.3 Importance of Saving
1.4 Investment
1.5 Investment & Speculation
2 Research Methodology
2.1 Research Methodology
2.2 Research Process
2.3 Objectives of the Study
2.4 Limitations of the Study
2.5 Significance of the Study
2.6 Hypothesis
2.6.1 Types of Hypothesis
2.7 Research Design
3 Review of literature
3.1 Literature Review
3.1.1 Objectives of the review of literature
3.1.2 Empirical Studies
3.1.4 Research articles

4 Data Analysis And Data Interpretation

4.1 Meaning
4.1.1 Data Analysis
4.1.2 Data Interpretation
4.2 Importance
4.2.1 Importance of Data Analysis
5 Conclusion and Suggestions
5.1 Findings
5.2 Conclusion and Suggestions

5.3 Bibliography

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1.1 INTRODUCTION

As we know that oxygen is necessary for human life in the same way Savings
are necessary for uncertain future in context to meet the various need of life.
Savings means sacrificing the current consumption in order to increase the living
standard and fulfilling the daily requirements in future. The saving can be done
in different ways by making bank deposits, or invests the saving in different
ways. One of the best ways of saving is to create an automatic saving plan.
Savings plays very important role in making of the household and the national
economy. Saving also provide the financial protection to meet the requirement
or emergencies in future. It is necessary to have saving plan because it will help
in meeting financial goals like secure future, children’s education, meeting the
demands of the family etc. Today investment is an economic activity. Basically
investment is efficiently use of funds with the expectation of receiving good
return or benefits in the future. Investment is mainly done with the objective like
wanting a home, creating a regular income after retirement, and possessing
money for the child’s education.

In present scenario, everyone wants to save for oneself as well as the family
against unpredictable future. Investors have to decide where they put their
saving so that the return will be profitable to them. Various investment avenues
are available in the market, which provide more security and safety of the
investor fund. The investors have to decide and & set their investment portfolio
from available opportunities by selecting the best investment options. It is not an
easy task as it requires knowledge & awareness about investment concept & its
features. Demographics characteristics also affect the investment preferences of
the investors. Investment can be made in mutual funds, shares, bonds, fixed
deposits, real estates, art work & jewellery etc. Increase in income has resulted
in growth of investment. Ups and down in stock market, rise in Inflation rates
affect the decision of investment of the investors. Most of the Indian people
invest their saving/income in the investment option for their needs and
necessities after retirement. They depend upon their relatives & friends who give
them the advice about investment options. Every investor has to set off its own
objectives and goals whether for short, medium, long term after considering the

risk and return measures on adopted investment pattern. Investments are always

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interesting, challenging and rewarding. Future is uncertain, thus investor has to
determine before how much risk he is willing to bear. Even a small amount of
investing in investment options can gives more profitable rewards and returns
over a long term. But to achieve a good profit the investors has full knowledge
of investment decision i.e. where to invest, when to invest and how much to
invest. Investors have to use his skill, knowledge, and experience while selecting
/investing money. Investors cannot avoid the risk but they can minimize the risk
by investing their money in various forms of investment, which are considered
as the safe forms of Investment. Many options are available for the investors to
invest their savings. Each investment avenues has its own risk and return
features. Investment avenues are available from bank deposit, post office
schemes, government securities, provident funds, insurance policies, corporate
deposits, pension’s plans, real estates, gold & silver etc.

Many individuals find investments to be fascinating because they can participate

in the decision making process. One expects to earn a positive return on a
diversified portfolio. Investing is not a game but a serious subject matter that can
have a major impact on investor’s future wellbeing. Virtually, everyone makes
investments. Each of the investment has common characteristics like, potential
return, capital appreciation and the risk one must bear. The future is uncertain,
and one must determine how much risk one is willing to bear since higher return
is associated with accepting more risk. The capital market plays an important
role in the development of the country for mobilizing and allocation of domestic
and foreign savings. It plays crucial role to channelize the savings from
household sector of the country, which in turn enhance the capacity of the
economy to product goods and services to society. Therefore capital market
plays a very crucial role in stimulating industrial growth as well as economic
growth and development. Indian financial system’s formal part is consisting of
an existence of stock exchange and an active new issue market. This market is
consisting of primary and secondary segments, which deal with new issues of
securities and trade the existing securities, respectively. Securities in both the
market comprise of debt and equity instruments. Both are open for individual
retail investment to park their saving.

Money Attitude of the people towards money in today’s world is that everybody
wants to enjoy the benefits of money because they have earned by hard work
and efforts made on it. That's great but spending all your money is not the

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smartest thing to do. Saving of money help people in the long run. There could
be the uncertainties of future which resist people to save for future. What
happens if you lose your job tomorrow? Or the car breaks down? If somebody
have savings for future than the uncertainties can be faced by people and stress
will be less. Without money put away in savings and or investments, people may
open themselves up to other risks as well. There are many ways through people
can save money one is controlling the extra expenses. For this make a list of the
things which shows necessity and purchase things according to it and don’t buy
extra things that exceeds peoples expanses and also stop going to shopping
complexes and malls that also reduces the cost and improves saving structure
.Secondly reduce the telephone expenses. Thirdly, reduce electricity expenses.
Electricity one can save lot if one remains alert and switch off lights and fans
and other electronic item immediately after their use. Similarly in case of
telephone you can save by buying an affordable model and talking less on
phone. Thus, your saving not only benefits you but also helps in preserving the
environment by preventing wastage and contributes to the economic growth of
country. Thinking before doing about the few reasons why saving has great
importance for people. Firstly, for emergency, this could be a new roof for the
house, out-of-pocket medical expenses, or a job layoff and sudden loss of
income. One needs money set aside for these emergencies Secondly, Retirement
is the second stage on thinking, one intends to retire someday, so needs money
kept as savings and investments to take the place of the income when one is no
longer get from your job. Thirdly, Average Life Expectancy plays a great role,
with more advances in medicine and public health; people are now living longer
and therefore needing more money. Fourthly, security of money for future
intends one to think upon it. Fifthly, Education - The costs for private and public
education are rising every year, and it's getting tougher to meet these demands.
So, saving is the necessary. Sixthly, to make a house for residential purpose is
the reason and to save money is for a down payment on a house. One’s
negotiating power goes a lot farther when one has a significant down payment
towards home. One will receive better interest rates, and be able to afford a
bigger home.

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One can determine how much you save towards this each month depending on
his circumstances. Seventhly, Save for Vacations and Other Luxury Items- A
Seventh reason to save money is to have fun. One can save up for tour of
Europe. Additionally one can be saving for fun One’s negotiating power is
stronger if you have cash in hand on bigger purchases. Day by day trends are
changing so there is the need for change in luxury items according to status, job
and business. Eighthly, save for a New

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Interpretation:

Car, an eight reason is to purchase a car with cash. Ninthly, Save for Sinking
Funds is to set up your sinking funds. A sinking fund is money one can set aside
for future repairs or improvements on one’s car, home or other possessions.
Investment involves making of a sacrifice in the present with the hope of getting
future benefits. Investment has many facets. The two important elements of
investments are current sacrifice and future benefits. There can be the
identification of various activities which displays the two features of investment.
For example, a portfolio manager buys 1000 shares of reliance industries Ltd.,
One could acquire the fixed deposit scheme of oriental bank of commerce for
years or more and a corporate firm expanding Rs. 40 lakh for expansion
programme, a father purchase jewellery for daughter’s marriage and so on. All
these constitute investment because they involve current sacrifice of
consumption and hope of future gain.
In other words investment, investment refers to a commitment of funds to one or
more assets that will be held over some future time period. Anything not
consumed for today saved for future use can be termed as Investment. The act of
committing money or capital to an endeavor with the expectation of obtaining an
additional income or profit. It's actually pretty simple: investing means putting
your money to work for you. Essentially, it's a different way to think about how
to make money.

Investing is not gambling. Gambling is putting money at risk by betting on an

uncertain outcome with the hope that you might win money. At this point ,it is
necessary to distinguish between certain activities which are in the nature of
gambling and those which are genuine investments .For example, if one
purchase in Rs. 500 lottery ticket ,one may be sacrificing current consumption in
the hope of winning high rate of returns ,but one may not investing there. In
gambling everything is uncertain and a purchaser of lottery knows that one
losses money if he doesn’t win in any situation because to win it is not in his
hands. However the Investor, not being a speculator, does not proceed with the
assumption that he would lose his money because the act of investment decision
making process is there. The genuine investors would always have appropriate
information, which is well analyzed in relation to risk- return profile of the
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Interpretation:

investor, and therefore the investment options/avenues are selected. However in

real life it is very difficult to draw a conclusion to separate gambling or
speculative motives from genuine investment motives and the difference is
purely a matter of opinion. Obviously, everybody wants more money. It's pretty
easy to understand that people invest because they want to increase their
personal freedom, sense of security and ability to afford the things they want in
life. However, regardless of why one invests, one should seek to manage
oneselves wealth effectively, obtaining most from it. This includes protecting the
assets from inflation, taxes, and other factors. Investment is important Because
of financial interdependence, increases wealth, fulfilling personal goals and
Reduces future risk.

The developing countries in world, like India face as seen the enormous task of
finding sufficient capital to utilize in their development efforts. Most of countries
find it difficult at at stage to get out of the vicious circle of poverty that is
prevailing of low income, low saving, low investment, low employment etc and
the list goes on. With high capital output ratio, that is observed India needs very
high rates of investments that would take and make leap forward in her efforts
continues of attaining high levels of growth.

The major features that is seen in an investment are safety of principal amount,
liquidity, income and its stability, appreciation and lastly easy transferability. A
different variety of investment avenues in abundance and types are available
such as shares, bank, companies, gold and silver, real estate, life insurance,
postal savings. All the investors invest who wish to invest, invest their surplus
money in the above mentioned avenues that are available based on their risk
taking attitude and capacity bearing.

Investment is not a mere game but a rather crucial subject that can have a major
impact on investor’s wellbeing. Virtually everyone make investments at some
point of time, in their lives. Even when an individual isn’t making investments
on certain assets example, stock market assets such as shares, debentures, etc.;
investments are made through other means such as participation in pension plan,

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Interpretation:

employee savings schemes, and purchase of life insurance products or even a

home.

Many individuals find investments to be fascinating because they get an

opportunity to participate in decision making process and thereby assess the
outcomes of their investment choices. Not all investments are profitable. One can
make proper investment decisions through the knowledge and experience that
one has gained over the years. However, most investments earn positive returns
on a diversified portfolio.

1.2 SAVING

Saving is income not spent, or deferred consumption. Methods of saving include

putting money aside in, for example, a deposit account, a pension account, an
investment fund, or as cash. Saving also involves reducing expenditures, such as
recurring costs. In terms of personal finance, saving generally specifies low-risk
preservation of money, as in a deposit account, versus investment, wherein risk
is a lot higher; in economics more broadly, it refers to any income not used for
immediate consumption. Saving does not automatically include interest.

Saving differs from savings. The former refers to the act of not consuming
one's assets, whereas the latter refers to either multiple opportunities to
reduce costs; or one's assets in the form of cash. Saving refers to an activity
occurring over time, a flow variable, whereas savings refers to something
that exists at any one time, a stock variable. This distinction is often
misunderstood, and even professional economists and investment
professionals will often refer to "saving" as "savings".

In different contexts there can be subtle differences in what counts as saving.

For example, the part of a person's income that is spent on mortgage loan
principal repayments is not spent on present consumption and is therefore
saving by the above definition, even though people do not always think of
repaying a loan as saving. However, in the U.S. measurement of the numbers
behind its gross national product (i.e., the National Income and Product

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Accounts), personal interest payments are not treated as "saving" unless the
institutions and people who receive them save them.

Saving is closely related to physical investment, in that the former provides a

source of funds for the latter. By not using income to buy consumer goods and
services, it is possible for resources to instead be invested by being used to
produce fixed capital, such as factories and machinery. Saving can therefore be
vital to increase the amount of fixed capital available, which contributes to
economic growth.

However, increased saving does not always correspond to increased investment.

If savings are not deposited into a financial intermediary such as a bank, there is
no chance for those savings to be recycled as investment by business. This
means that saving may increase without increasing investment, possibly causing
a short-fall of demand (a pile-up of inventories, a cut-back of production,
employment, and income, and thus a recession) rather than to economic growth.
In the short term, if saving falls below investment, it can lead to a growth of
aggregate demand and an economic boom. In the long term if saving falls below
investment it eventually reduces investment and detracts from future growth.
Future growth is made possible by foregoing present consumption to increase
investment. However, savings not deposited into a financial intermediary
amount to an (interest-free) loan to the government or central bank, who can
recycle this loan.

Savings is the money a person has left over when they subtract their consumer
spending from their disposable income over a given time period. Savings can be
used to increase income through investing.

Savings comprise the amount of money left over after spending. For example,
Sasha’s monthly paycheck is $5,000. Her expenses include a $1,300 rent
payment, a $450 car payment, a $500 student loan payment, a $300 credit card
payment, $250 for groceries, $75 for utilities, $75 for her cellphone and $100 for
gas. Since her monthly income is $5,000 and her monthly expenses are $3,050,
Sasha has $1,950 left over. If Sasha saves her excess income and faces an
emergency, she has money to live on while resolving the issue. If Sasha does not

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Interpretation:

save her extra money and her expenses exceed her income, she is living
paycheck to paycheck. If she has an emergency, she does not have money to live
on and must secure payments for her bills.

Savings refers to any income that we do not spend and put aside – we put the
money away. It is the portion of our disposable income that we do not spend on
consumer goods, but accumulate or invest.
According to Keynesian economics, the term refers to the amount of money left
over when the cost of an individual’s consumer expenditure is subtracted from
his or her total disposable income earned over a specified period. Put simply,
total disposable income minus how much of that disposable income is spent.
Savings does not mean the absence of spending – a definition that many people
will give you if you ask them what the term means. Instead, it is the result of the
intentional act of setting money aside, building it up, usually for a specific
purpose or goal.
If savings are invested in different investment vehicles, they can be turned into
additional income.
According to Finance in the Classroom: “Savings is the portion of income not spent
oncurrent expenditures. Because a person does not know what will happen in the future,
moneyshould be saved to pay for unexpected events or emergencies. An individual’s car
maybreakdown, their dishwasher could begin to leak, or a medical emergency could
occur.Without savings, unexpected events can become large financial burdens.
Therefore, savingshelps an individual or family become financially secure.”

1.3 Importance Of Saving Money:

The importance of saving money cannot be understated. In fact, with so many

proven benefits, saving money is one of the best financial habits you can adopt.
But, if saving money doesn’t come easy to you, or you just don’t see the point,
it’s natural to ask yourself, why is saving money important?

First and foremost, saving money is important because it helps protect you in the
event of a financial emergency. Additionally, saving money can help you pay for

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large purchases, avoid debt, reduce your financial stress, leave a financial
legacy, and provide you with a greater sense of financial freedom. Truthfully,
there are countless reasons to save money.

1.Freedom to Pursue Your Dream Career

Have you ever known somebody that was stuck in a job they hate, because they
didn’t have the financial freedom to quit and pursue something they enjoy?
Well, if they had enough savings, I’m willing to bet that wouldn’t be the case.
One of the most important reasons to save is to provide yourself with the
freedom to pursue a career you love.
When you have ample cash sitting in your savings account, and a pile of
investments earning interest, there’s absolutely no reason to endure a situation
you hate.
In other words, a big pile of savings gives you the freedom to quit a job you hate
and pursue your dream career.

2.Long-Term Security
No matter how hard I try, I can’t predict the future; and neither can you. And for
that reason, saving up a safety net is a really good idea.
Think about it — without savings, how will you weather any financial storms?
Without investments, how do you plan to make money when you’re too old to
work? If you lose your job, will you be able to pay your bills?
Saving money is important because it provides you with financial security. And
the more you save, the more secure you will be.

3.Emergencies
It’s inevitable that throughout life, there will be some emergencies. From a
family emergency that requires you to fly across the country, to less emotional
emergencies like a broken down car, having a decent amount of money saved up
keeps you from adding financial stress to the pile.
Seriously, money is the last thing you need to be worrying about in an
emergency. So do your future-self a favor and save up an emergency fund.

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Interpretation:

Hopefully you’ll never need to use it, but if you do, you’ll be beyond grateful
it’s there.

4.Helping Others
Do you know what happens when you save money wisely and invest
intelligently? Your money grows. And when your money grows, your
opportunity to help others financially grows with it.
Consider this: if you give 10% of every dollar you earn to charity or your local
church, and you don’t have any savings or investments, your ability to give is
limited by your annual salary. In contrast, if you save and invest your money,
your ability to give will grow exponentially with compound interest.
Remember, money is just a tool you can use to accomplish your goals. And if
your goal is to help others as much as possible, you need to be saving and
investing your money consistently.

5.Your Marriage
I don’t think it’s a big secret that money problems are one of the leading causes
of divorce. And if you’re married, you’ve probably experienced a money fight or
two. And let me tell you, they are no fun.
But I can also tell you from experience that the more money you save, the less
frequent those arguments occur.
6.Leaving A Financial Legacy
If you died tomorrow, what kind of financial legacy would you be leaving
behind? Would your story be one of debt and financial burden for your family?
Or, would you leave a legacy of financial fortitude, wisdom and honor. Your
financial legacy is important to the people around you. Whether you’re 20
years old, or 90 years old, the way you handle your money will leave lasting
effects—positive or negative—on your loved ones.

7.Education
Do you know what’s expensive? College. (Though, to be honest,
elementary, middle, and high school are pricey little endeavors these days as

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Interpretation:

well) I mean, my wife is pregnant with our first baby, and we’re already
discussing 529 plans and funding our child’s college education.
And short of growing a money tree–you know, the kind dads always talk
about– the only way we will be able to afford it, is if we start saving now.
Education is important–whether it’s your own, or your children’s. Ipso facto,
saving money so you can pay for education is important.

8.Home Ownership
If you own a home, you’ve undoubtedly experienced the many expenses that
come with it.
Whether they’re big expenses like kitchen remodels, or small expenses, like
buying filters for your furnace, they add up. And while you might be able to cash
flow the majority of them, it’s in your best interest to prepare for them in
advance.
In fact, I recommend setting up a specific savings account just for your home
expenses. That way, you don’t have to feel guilty pulling money from savings
when you need to fix or update something.

9.Major Life Events

Life is full of events, but there are a few big ones that can get particularly
expensive. For instance, the two that instantly come to mind are newborn babies
and weddings.
So, it’s important to save for them.
Here are a couple of guidelines to get you started.
When that little pee stick reads positive, start a baby savings fund, and throw
every last penny you can squeeze out of your budget into it. Then, when your
daughter first starts dreaming about her wedding day, start saving for it.
Weddings aren’t cheap.

10.Minimizing Financial Risk

The more money you have, the less risky your financial situation will become.
For instance, if you have $10,000 to your name, and you invest $6,000 to start
your own business, you just risked 60% of your net worth. Whereas, if you save

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Interpretation:

and invest until your net worth crests one-million dollars, then spend $60,000 to
start a company, you only risked 6% of your net worth.
Plus, when you only invest 6% of your net worth, it’s pretty likely you will make
up for that in interest, alone, over the next year.

11.Financial Independence
One of the best parts of being an adult is the independence and freedom to do
what you want when you want. (Within the confines of the law, of course) But
the less you save, and the more debt you accrue, the less independence you
will have. So, if you want to be financially independent and unshackled, you
need to beef up your savings.

The Importance of Saving Money – Final Thoughts

Saving money is important because it provides security, stress relief, and

freedom. And while there are countless reasons to save, you just need to find a
reason that resonates with you. Whether it’s helping others, improving your
marital finances, leaving a positive financial legacy, or just having a little more
fun, you owe it to yourself to prioritize saving.

1.4 Investment
An investment is an asset or item acquired with the goal of generating income or
appreciation. Appreciation refers to an increase in the value of an asset over
time. When an individual purchases a good as an investment, the intent is not to
consume the good but rather to use it in the future to create wealth. An
investment always concerns the outlay of some asset today—time, money, or
effort—in hopes of a greater payoff in the future than what was originally put in.

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Interpretation:

For example, an investor may purchase a monetary asset now with the idea that
the asset will provide income in the future or will later be sold at a higher price
for a profit.

To invest is to allocate money in the expectation of some benefit/return in the

future. In other words, to invest means owning an asset or an item with the goal
of generating income from the investment or the appreciation of your investment
which is an increase in the value of the asset over a period of time. When you
invest it always requires a sacrifice of some present asset that you own today
such as time, money, or effort.

In finance, the benefit from an investing is when you receive a return on your
investment. The return may consist of a gain or a loss realized from the sale of a
property or an investment, unrealized capital appreciation (or depreciation), or
investment income such as dividends, interest, rental income etc., or a
combination of capital gain and income. The return may also include currency
gains or losses due to changes in the foreign currency exchange rates.

Investors generally expect higher returns from riskier investments. When a low-
risk investment is made, the return is also generally low. Similarly, high risk
comes with high returns.

Investors, particularly novices, are often advised to adopt a particular investment

strategy and diversify their portfolio. Diversification has the statistical effect of
reducing overall risk.

An investor may bear a risk of loss of some or all of their capital invested.
Investment differs from arbitrage, in which profit is generated without investing
capital or bearing risk.
Savings bear the (normally remote) risk that the financial provider may default.

Foreign currency savings also bear foreign exchange risk: if the currency of a
savings account differs from the account holder's home currency, then there is
the risk that the exchange rate between the two currencies will move unfavorably
so that the value of the savings account decreases, measured in the account
holder's home currency.

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Interpretation:

In contrast with savings, investments tend to carry more risk, in the form of both
a wider variety of risk factors and a greater level of uncertainty.

Industry to industry volatility is more or less of a risk depending. In

biotechnology for example, investors look for big profits on companies that have
small market capitalizations but can be worth hundreds of millions quite quickly.

An investment is essentially an asset that is created with the intention of

allowing money to grow. The wealth created can be used for a variety of
objectives such as meeting shortages in income, saving up for retirement, or
fulfilling certain specific obligations such as repayment of loan, payment of
tuition fees, or purpose of other assets.

Investment may generate income for you in two ways. One, if you invest in a
saleable assets, you may earn income by way of profit. Second, if investment is
made in a return generation plan, then you will earn an income via accumulation
of gains. In this sense, ‘what is investment’ can be understood by saying that
investments are all about putting your savings into assets or objects that become
worth more than their initial worth or those that will help produce an income
with time.

Investment can be studied under two main categories:

• Economic Investment.
• Financial Investment.

Economic investments are, by definition, additions to the capital stock of a

company. These can range from equipment or machinery to a new production
facility or even higher-quality materials to be used in manufacturing products to
yield higher profit margins. The notion of capital stock just refers to something
that is used in the production of other goods. Generally speaking, economic
investments refer to a financial outlay in the areas of buildings, equipment and
inventory.

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Human capital is also included in the notion of economic investments. If your

company brings on a new director of sales to help grow some of your accounts,
you are investing in that individual, banking on their ability to bring extra profits
to the business. As is the case with any investment, this effort might or might not
prove fruitful, depending on how successful the director of sales is at her job.

Along similar lines, hiring 10 new employees to work on the production floor so
that your company can begin to manufacture products on a night shift would be
considered an economic investment. While initially the business will be forced
to spend additional funds, you are moving forward under the assumption that the
night shift employees will produce enough additional inventories to help you
gain a bigger portion of the available profits in your industry.

Economic investments can, of course, be much more linear. If you purchase a

second machine to shrink wrap your products, it will enable you to package
twice as many in the same amount of time. This can help your business get more
product out on trucks and into stores each day. Theoretically, this investment in
the new shrink wrapping machine will help you produce more and increase your
profits.

Even more direct is the relationship between the purchase of capital stock like
inventory or machines that directly produce what you sell. With more
ingredients on hand, your factory might be able to bake more cookies that you
can then sell. With another industrial oven on the production floor, you should
similarly be able to bake more cookies and thus see an increase in sales.

When considering economic investments that some capital stock necessitates an

increase in other areas before profits can increase. Take, for instance, the
example of purchasing more cookie ingredients. While this theoretically could
lead to a spike in sales, you will also need to scale up your labor and sales
channels to enjoy the profits you anticipate. Without additional staff to bake the
cookies or stores in which to sell them, you could end up with extra inventory
and nowhere to sell it.

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Financial investments are a bit different from economic investments. Whereas

economic investments are tied to a tangible increase in capital stock, financial
investments refer to an allocation of resources to assets that you expect to yield
some sort of dividend over a period. Instead of being tangible objects or the
means of production, financial investments are things like stocks, bonds or real
estate ventures. Investments into the market, purchases of certificates of deposit
or bonds, ownership of rental properties and even things like life insurance
policies would fall under the category of financial investments. These
investments merely transfer the existing ownership of an asset from one person
or institution to another. Anything that you expect will yield financial gain in the
future but is traded as a purely financial resource in the short term could be
considered this type of investment.

Generally speaking, the more developed an economy or a company, the more

likely it is to deal in financial investments rather than merely economic ones.
Financial investments tend to come about when an entity has enough capital to
spare that they can maintain the status quo and stay profitable, plus some.
Without adequate financial stability to keep your company running, you likely
won’t be looking to make as many financial investments. A bit of extra funding
usually goes towards economic investments, to grow profits. Only once the
company has managed to develop a stable system for maintaining the growth of
economic investments do they tend to move on to financial investments.

Businesses often choose to invest in real estate as they grow. Successful retail
chains, in particular, often make the bulk of their income from their real estate
interests. This is a way to grow profits at a more rapid rate than other sorts of
financial investments.

1.5 Investing & Speculating

Investors and traders take on calculated risk as they attempt to profit from
transactions they make in the markets. The level of risk undertaken in the
transactions is the main difference between investing and speculating.

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Whenever a person spends money with the expectation that the endeavor will
return a profit, they are investing. In this scenario, the undertaking bases the
decision on a reasonable judgment made after a thorough investigation of the
soundness that the endeavor has a good probability of success.

But what if the same person spends money on an undertaking that shows a high
probability of failure? In this case, they are speculating. The success or failure
depends primarily on chance, or on uncontrollable (external) forces or events.

The primary difference between investing and speculating is the amount of risk
undertaken. High-risk speculation is typically akin to gambling, whereas lower-
risk investing uses a basis of fundamentals and analysis.

Investing
Investing can come in many different forms—through monetary, time, or
energybased methods. In the financial sense of the term, investing means the
buying and selling of securities such as stocks, bonds, exchange traded funds
(ETFs), mutual funds, and a variety of other financial products.

Investors hope to generate income or profit through a satisfactory return on their

capital by taking on an average or below-average amount of risk. Income can be
in the form of the underlying asset appreciating in value, in periodic dividends or
interest payments, or in the full return of their spent capital.

Most often, investing is the act of buying and holding an asset for the long-term.
To classify as a long-term holding, the investor must own the asset for at least
one year.

Let's consider a large stable multinational company as an example of investing.

This company may pay a consistent dividend that increases annually, and it may
have a low business risk. An investor may choose to invest in this company over
the longterm to make a satisfactory return on their capital while taking on
relatively low risk. Additionally, the investor may add several similar companies

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across different industries to their portfolio to diversify and further lower their
risk.

Analysis and research is a key part of the investment process. It involves

evaluating different assets, sectors, and patterns or trends that occur in the
market. Investors can use tools like fundamental or technical analysis to choose
their investment strategies or design their portfolios. By using fundamental
analysis, investors can determine what factors affect the value of securities, from
microeconomic to macroeconomic factors. Technical analysis, on the other hand,
uses statistical trends such as security prices and volumes to find opportunities in
the market.

Investors have many options available for them to invest their money. Brokerage
accounts give investors access to a variety of securities. By opening an account,
an investor agrees to make deposits and then places orders through the firm. The
assets and income belong to the investors, while the brokerage takes a
commission for facilitating the trades. With new technology, investors can now
invest with roboadvisers, too. These are automated investment companies that
use an algorithm to come up with an investment strategy based on investors'
goals and risk tolerance.

Speculating
Speculating is the act of putting money into financial endeavors with a high
probability of failure. Speculating seeks abnormally high returns from bets that
can go one way or the other. While speculating is likened to gambling, it is not
exactly the same, as speculators try to make an educated decision on the
direction of their trades. However, the inherent speculative risk involved in the
transaction tends to be significantly above average.

These traders buy securities with the understanding that they will be held for
only a short period before selling. They may frequently move into and out of a
position.

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As an example of a speculative trade, consider a volatile junior gold mining

company with an equal chance over the near-term of skyrocketing from a new
gold mine discovery or going bankrupt. With no news from the company,
investors would tend to shy away from such a risky trade. However, some
speculators may believe the junior gold mining company will strike gold and
may buy its stock on a hunch. This hunch and the subsequent activity by
investors is called speculation.

Speculative trading does have its downfalls. When there are inflated expectations
of growth or price action for a particular asset class or sector, values will rise.
When this happens, trading volume increases, eventually leading to a bubble.
This happened with the dotcom bubble. Investment in Internet companies grew
exponentially in the late 1990s, with valuations rising rapidly. The market
crashed after 2001, causing major tech companies to lose a big chunk of their
value, with many others being wiped out.

Types of Speculative Traders

Day trading is a form of speculation. Day traders don't necessarily have any
specific qualifications, rather, they are labeled as such because they trade often.
They generally hold their positions for a day, closing once the trading session is
complete.

A swing trader, on the other hand, holds their position up to about several weeks
hoping to capitalize on gains during that time. This is accomplished by trying to
determine where a stock's price will move, taking a position, and then making a
profit.

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CHAPTER 2
Research Methodology

2.1 Research Methodology

Research methodology is the specific procedures or techniques used to identify,

select, process, and analyze information about a topic. In a research paper, the
methodology section allows the reader to critically evaluate a study’s overall
validity and reliability.

Research methodology is the path through which researchers need to conduct

their research. It shows the path through which these researchers formulate their
problem and objective and present their result from the data obtained during the
study period. This research design and methodology chapter also shows how the
research outcome at the end will be obtained in line with meeting the objective
of the study. This chapter hence discusses the research methods that were used
during the research process. It includes the research methodology of the study
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from the research strategy to the result dissemination. For emphasis, in this
chapter, the author outlines the research strategy, research design, research
methodology, the study area, data sources such as primary data sources and
secondary data, population consideration and sample size determination such as
questionnaires sample size determination and workplace site exposure
measurement sample determination, data collection methods like primary data
collection methods including workplace site observation data collection and data
collection through desk review, data collection through questionnaires, data
obtained from experts opinion, workplace site exposure measurement, data
collection tools pretest, secondary data collection methods, methods of data
analysis used such as quantitative data analysis and qualitative data analysis,
data analysis software, the reliability and validity analysis of the quantitative
data, reliability of data, reliability analysis, validity, data quality management,
inclusion criteria, ethical consideration and dissemination of result and its
utilization approaches. In order to satisfy the objectives of the study, a
qualitative and quantitative research method is apprehended in general.

The study used these mixed strategies because the data were obtained from all
aspects of the data source during the study time. Therefore, the purpose of this
methodology is to satisfy the research plan and target devised by the researcher.
2.2Research Process

Identification of the problem

Review of literature

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Setting of objectives

Formulation of hypothesis

Setting up of research design

Selection of sample

Sample Collection of the data

Analysis of data collection

Findings, Conclusion and Suggestions of the study

2.3 Objectives of the study

1. To analyze the profile of the respondents

2. To study the consumption, saving and investment habits of salaried
person in Mumbai and Thane city.
3. To study the consumption, saving and investment habits of salaried
earring person in different income brackets in Mumbai and Thane city.
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4. To study the determinants of consumption, saving and investment.

5. To study the impact of age of the person on the consumption, saving
habits of the individual.
6. To study the impact of sector of employment on consumption and saving
habits of the sample group.
7. To study the growth and development of various investment
opportunities.
8. To study the awareness and pattern of investment among people in
Mumbai and Thane city.
9. To analyze factors influencing investment decisions.
10. To evaluate the risk and return on investment.
11. To examine the various problems faced by the investors.
12. To suggest suitable measures for improving profitable and safe
investments.
13. To determine the preference of salaried individuals regarding saving and
investment avenues and sectors on the basis of their gender.
14. To study the impact of various investment objectives on the level of
satisfaction derived by salaried individuals.
15. To summarize the key findings and offer suggestions and conclusion.

2.4 Limitations to the study

1) The primary data were collected from samples in Mumbai and Thane city. The results
arrived in the study may or may not be applicable to other districts.

2) Convenient sampling technique was used to select sample. The samples may not
represent the true population.

3) The study has been limited to college salaried people in Mumbai and Thane city.

4) The analysis was on the basis of information/opinion of the respondents which may
change with change of time, trend, lifestyle changes, etc.

5) Scope of the study is limited to the selected saving and investment avenues.

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6) The data given by respondents may have been biased and it would affect the findings
of the study.

2.5 Significance of the study

The study of salary earners with reference to Consumption, Saving and

Investment habits is a vast subject. The study limits its scope to the thane city
only in view of the limitations of the individual researcher. As consumption,
saving and investment covers many more factors so, the present study limits its
scope to the selected factors. The study concentrates on the analysis of
consumption, saving and investment habits of salary earning person.

With the entry of various new financial products in the Indian Market, the
avenue for parking the funds in the form of savings & investment have been
increased. The decision of making an investment is emerging as a new challenge
not only for the various investors in the market. When the range of investors
present in the market is majorly composed of significant number of salaried class
individuals than it becomes important to talk about it. For retaining this group of
investors who had just gotten the essence of return than it is of essential to
understand that what all are the possible factors that are flagging them towards
investment and vice versa. It is essential to understand that why a salaried class
individual is so keen in investing and with which level of knowledge.

The study will further help to understand the various factors affecting the various
saving & investment decisions of the salaried class investors towards various
investment avenues available in the market with regard to their level of
knowledge and level of satisfaction. It would additionally help to understand the
analogy of investment decision and investment patterns that would in turn help
the investment and financial marketers to have better understanding the mind set
of various Indian salaried class investors and in turn would also help in attracting
more and more investors.

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2.6 Hypothesis

Hypothesis literally means an idea or theory that the researcher sets as the goal
of the study and examines it and is replaced as a theory when the hypothesis is
true in the study's conclusion. Hypothesis is a material thinking based on
scientific process.

In research methods, hypothesis is a proposition which the researcher wants to

verify. Hypothesis is a certainly useful but it is not necessary at times the
researcher interested in collecting and analyzing data indicating the main
features without a hypothesis excepting which may suggest during the course of
his study. In case of problem oriented research, it is necessary to formulate
hypothesis. In this type of research, hypothesis is concerned with the cause of a
certain phenomenon or a relationship between two or more variable.

Hypothesis is impossible to generate in the absence of human thought.

Formulation of hypotheses in scientific study of social problems is an important
and strong aspect of research, utility of their use etc. It gives researcher a new
direction in research study.

In the absence of hypothesis, the researcher cannot move even a step further in
his study because on the basis of this thinking he tries to know what the reason
behind this research is. It is the definitive and fully planned path of research
study.

Hypothesis is helpful and useful in giving a definite direction to any research

study. It has an important place in the study of social phenomena. Hypothesis
controls and directs social research and scientific method.

Thus, hypothesis is a statement which should be a clear, specific, testable and

predictable statement. It must be guided by some available information or
evidence. The hypothesis may also has theoretical guidance. It can be formulated
in various research designs. Hypothesis, therefore, requires a research question.
Research question can be answered by both qualitative and quantitative research
methodologies but hypothesis is mostly used for quantitative research methods

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approach. Therefore, hypothesis provides direction for data collection and their
interpretation

In these, research study the hypothesis are as follows:

H0: There is significant relationship between the investment experience of the

respondents and their investment objectives.

H1: There is no significant relationship between the investment experience of the

respondents and their investment objectives.

H0: There is significant relationship between various factors affecting saving &
investment pattern of salaried individuals.

H1: There is no significant relationship between various factors affecting saving

& investment pattern of salaried individuals.

H0: There is significant impact of the various investments objectives on the

level of satisfaction derived by salaried Individuals

H1: There is no significant impact of the various investments objectives on the

level of satisfaction derived by salaried Individuals.

H0: There is significant difference between risk, return and level of satisfaction
derived by salaried individuals on the basis of sectors they are working in.

H1: There is no significant difference between risk, return and level of

satisfaction derived by salaried individuals on the basis of sectors they are
working in.

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2.6.1Types of hypothesis

A hypothesis (plural hypotheses) is a precise, testable statement of what the

researcher(s) predict will be the outcome of the study.

This usually involves proposing a possible relationship between two variables:

the independent variable (what the researcher changes) and the dependent
variable (what the research measures).

In research, there is a convention that the hypothesis is written in two forms, the
null hypothesis, and the alternative hypothesis (called the experimental
hypothesis when the method of investigation is an experiment).

Alternative Hypothesis

The alternative hypothesis states that there is a relationship between the two
variables being studied (one variable has an effect on the other).

It states that the results are not due to chance and that they are significant in
terms of supporting the theory being investigated.

Some hypothesis is connected with relation of analytic variables Such hypothesis

take place at a level of abstraction. Analytic variable requires the formulation of
a relationship between change in one the property and changes in another.
Abstraction is the highest level. Before this there are empirical uniformities
which indicates simple differences and ideal types which indicates specific
coincides of observation
e.g. high mortality rate among children is high in Asian countries. This is an
empirical study. An ideal type study would reveal that high mortality rate is
prevalent among the economically poor class of families. At the abstraction level
mortality among children of economically well - off families is going down.

Null Hypothesis

The null hypothesis states that there is no relationship between the two variables
being studied (one variable does not affect the other).

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It states results are due to chance and are not significant in terms of supporting
the idea being investigated.

When hypotheses are stated negatively. They are called null hypotheses, to avoid
personal bias of the researcher in the collection of data. Null hypothesis is used
to gathered additional support for the known hypothesis e.g. there is no
significant difference between the preferences shown towards the banking
facilities by business class customers. There are many occasions when salaried -
class of customers. There are many occasions when null hypothesis is
formulated with the main objective of rejection. The null hypothesis id
symbolized as H1. Assuming there are two sets of people X and Y and they are
compared for efficiency. Further, if we assume that both sets of persons are same
on their efficiency then this assumption is called null hypothesis.

2.7 RESEARCH DESIGN

Research Design is a framework or can be referred as an outline which helps in

determining the appropriate technique and is also selected for collecting,
summarizing and testing the data collected.

According to David J.L and Ronald S.R “A research design is the determination
and statement of the general research approach or strategy adopted for the
particular project. It is the heart of planning. If the design adheres to the research
objectives, it will ensure that the client needs will be severed.”

In this research the descriptive study and empirical analysis of the various factors
affecting the saving & investment decisions of salaried individuals. This
research is based upon quantitative and descriptive research. The quantitative
methods in knowing the observed facts by collection of numerical data which are
further analysed using statistical methods. This research design is adopted so as

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to match the empirical analysis which is based on primary data collected through
questionnaire.

Methodology of the study

The methodology used for the study can be summarized as under. It describes
the logic behind the selection of city, sample households, period etc.

Chapter 3
Review Of Literature

3.1REVIEW OF LITERATURE

A literature review identifies, evaluates and synthesizes the relevant literature

within a particular field of research. It illuminates how knowledge has evolved
within the field, highlighting what has already been done, what is generally
accepted, what is emerging and what is the current state of thinking on the topic.
In addition, within research-based texts such as a Doctoral thesis, a literature
review identifies a research gap

A review of literature presents much more than a summary of relevant sources.

The act of reviewing involves evaluating individual sources as well as
synthesizing these sources in order to gain a broad view of the field. At this
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‘field level’, a literature review discusses common and emerging approaches,

notable patterns and trends, areas of conflict and controversies, and gaps within
the relevant literature. When you can clearly observe these things, you will be
able to situate your own research and contribute to ongoing debates within the
field.

3.1.1 Objectives of the review of literature:

• It surveys the literature in the chosen area of study.

• It judgmentally analyses the information collected by identifying the
various gaps in current knowledge and by showcasing the limitations of
various, studies, points of view and researches and also by framing areas
for further study and by studying the areas of arguments.
• It represents the concerned literature in a very structured manner.
• To know the factors that influence investment behavior of the salaried
people.
• To analyze awareness level regarding different investment avenues of
salaried people.
• To study the perception of people related to various investment
alternatives.
• To study the awareness levels among the employees regarding the
available
  various investment avenues.
3.1.2Empirical studies

An empirical study of “Indian Individual Investors Behavior” by Syed

Tabassum Sultana (2010) was an attempt to know the profile of the investors
and also to know their characteristics so as to know their preference with respect
to their investments. The study also tried to unravel the influence of
demographic factors like gender and age on risk tolerance level of the investors.

Bhardwaj Rajesh, Raheja Rekh and Priyanka (2011), propounded in their

study that saving and investment pattern of salaried class school teachers of

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govt. and private schools has depended upon income and they both get salary but
the scale of the salaries are different and saving patterns that’s why is so
different. Govt. teachers prefer to invest the money for emergency purposes and
private teacher’s emphasis on children marriage and education.

Dr. S. Mathivannan and Dr. M. Selvakumar (2011) examined the saving and
investment patterns of salaried teachers of Sivakasi Taluk, Tamilnadu and they
found that there is great importance of money and money’s worth for them and
They are regularly preparing budgets for Expenditures and compare it with the
actual expenditure and take necessary actions if there are any deviations has
arrived so far and they are influenced by fashionable and costly items.

Dr.Ananthapadhmanabha Achar (2012) studied “Saving and Investment

Behaviour of Teachers - An empirical study”. In the analysis individual
characteristics of teachers such as age, gender, marital status, and lifestyle
determined the savings and investment behaviour of teaching community in the
study region. They considered monthly family income, stage of family life cycle,
and upbringing status emerged as determinants of their savings and investment
behaviour

Dr. Varsha Virani (2012) propounded in her study that In spite of low income
the teachers have been saving for future needs. The major impact on savings is
due to the level of income of the school teachers. The research shows that
majority of the respondents are saving money as Bank deposits for the safety of
an unpredictable future. The main avenues of investment are Bank deposits and
the main purpose of investment is for children education, marriage, and security
after retirement.
3.1.3Research Articles

Over the years several researcher have been conducted to analyze the
savings and investment of salaried people.

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Neha S Shukla(2016) focused on the analysis of investment preference of

working women of North Gujarat region. It was concluded that the majority of
the women preferred traditional mode of investment practices.

A study by B.Thulasipriya (2014), shows that majority of the respondents are

saving money as Bank Deposits for the safety of an unpredictable future. The
main avenues of investment are Bank Deposits and the main purpose of
investment is for children education, marriage and security after retirement.

The researchers, Sonali Patil &Dr.KalpanaNandawa (2014) has analyzed that

salaried human resources consider the security as well as good return on savings
on normal basis. Respondents are conscious about the investment avenues
offered in India excluding female investors.

Vasagadekar Priya (2014) examined that women working in various industrial

sector in Pune. The investment habits, the role in investment decision making,
preferable investment avenues and risk bearing capacity are studied. It is clear
from this study, women generally prefer to invest in safe investment avenues
like Post Office savings scheme and fixed deposits in banks.

V.R. Palanivelu&K.Chandrakumar (2013) studied the investment preferences

of salaried class in Namakkal Taluk, Tamil Nadu. It highlight’s that certain
factors like age, educational level, knowledge about financial system affect the
decision regarding the choice of investment avenues.

Dr.Anathapadhmanabha Achar (2012) research focused on the savings and

investment patterns of primary, high school, college and university teachers in
Udupi district of Karnataka State. The savings and investment act of teaching
population is determined by the distinctiveness such as age, gender, life style and
marital status.
Dr.VarshaVirani (2012) propounded in her study on savings and investment
model of school teachers in Gujarat in which data is collected from 100 school
teachers and conducted that a large amount of the school teachers are saving
funds as bank deposits and government securities as their investment preference.

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Dr. S. Mathivannan and Dr. M. Selvakumar (2011) studied the investment

and savings pattern of school teachers in Sivakashi Taluk, Tamil Nadu. The
study concluded those now days, teaching community has started preparing
budgets and compare with actual expense met by them.

Syed Tabassum Sultana (2010) the study confirms on Indian individual

investors behavior and it also made an effort to understand about the depositors
profile and characteristics in order to know about the performance regarding the
investment.

Somasundaram (1998) had conducted the research to evaluate the saving and
investment pattern of salaried people in Coimbatore District. He found that chit
funds and bank deposits were the most excellent known modes of saving amidst
investors.
At the same time, UTI schemes and plantation schemes are least branded
modes. Investor’s attitudes were highly positive and depicted their objective to
save for their potential requirements.

(C.Sathiyamoorthy&K.Krishnamurthy, 2015)This study talks about the

various traditional investment avenues like bank deposits which still remain the
most preferred and secured investment avenue of the various households and the
main objective of this type investment is to use these funds for the children’s
marriage, education or even for the sake of financial security after retirement.

(Sood& Kaur, 2015) In this research it was advocated that the most preferred
investment avenues are bank deposits and LIC and out of them the most of the
factors which influences the various investment decisions were, tax benefit,
safety and high returns.

(Cvrlje, 2015) In this research the researcher has studied about the change to be
made about the perspective instead of simply pushing individuals towards the
investment and financial products by the noncompliance government and they
should also try to provide the individuals with some motivation to actively try
and participate in taxation area.

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(Shivakumar& Thimmaiah, 2015) In this research the majority of the

respondents of the research said that the risk coverage of their funds and their
children education are the major objective of their saving & investment
decisions.

(Kothari, 2014) In this study it was found out that most of the younger and
millennium people are more interested in making different types of investment
in comparison to the most of middle and elder age people as they have different
concept of investment and relay on most of the traditional options available. So
it was concluded that the different age group have different perception towards
the concept of investment.

(Bhushan, 2014) The higher financial literate groups have high level of
awareness for all the financial assets apart from the post office savings as this
preferred by most of the public sector employees.

Ravi Vyas and Suresh C Moonat (2012) carried out a study on the perception
and behavior of mutual fund investors. The study was carried out to understand
the preference of investors investment avenues, mode and form of investment
preferred by investors at Indore with a sample size of 500 respondents out of
which 363 respondents were investing in mutual funds, and these 363
respondent’s data was analyzed to come out with conclusions. A structured
questionnaire was used to collect the data during personal interviews. To
understand the nature of holding by the respondents, chi square test was used
along with the calculation of median and mode. After analysis of data, it was
found that Gold was the most preferred investment option followed by bank
deposits and fixed deposits.

Archana Kanungo (2014),In his research paper the title has “Investment
strategies of the investor”. International Journal of Research and Development.
There use direct relationship between investors decision on investment and
saving the strategic position of the LICO’S for the insurance customer service
and satisfaction has became a key to the success. The Archana

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Kanungoconcludes on her study the better Investment strategies always help us

to making strong investment portfolio.
S Umamaheswari, M Ashok Kumar (2014) In his research project title has
“awareness, attitude, expectation and satisfaction over their investments”
Impact:
International Journal of Research in Business Management 2 (2), 99-108, and
2014. Investment aspiration of the salaried middle class is actually a
commitment to secure the consumption of all regular financial in-flow with a
futuristic perspective for several reasons. The 30%(Ref Table 1) fixed deposit
choice of this salaried class of the society makes it essential to study their
attitude for investments, level of investment awareness and their expectation of
returns based on the factors which have an upper hand on their investment
choices. In this paper author finally concluded the fact an effort to outline the
relationship between the dominant societal and demographic factors of the
salaried middle class that affects the investment criteria namely, investment
awareness, investment attitude and investment returns. Precisely, this study
pursued on the salaried middle class of Coimbatore District, Tamilnadu, India is
executed with a focus to comprehend the utilities of financial policies favoring
public.

Bindu. T (2017) investment plays a very significant role in the lives of salaried
class employees. Before making any investment return, risk, liquidity, tax
benefits must be considered by the investors. In today’s scenario many new
instruments avenues are available for the salaried employees who provide tax
benefits along with high return and less risk. They studied the behavior of
salaried employees towards investment in the district of palakkad. Most of the
employees under study are well aware about the different investment and saving
avenues. Today’s annual income of investors is closely related to the percentage
of making investment.

Varsha Virani (2014) analyzed the various avenues of investment & concluded
during the study that teachers have been saving for the future in spite of them
having a low level of income. They save and make investment in most profit

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Interpretation:

options in which low risk is involved. Most of the respondents prefer to invest in
bank deposits as it involves low risk and provide regular return. High rate of
return & tax benefit has influence the investment decision of the respondents.

Investment is an activity that follows after proper evaluation of all the

alternatives. The value associated with analysis of the consumer decision making
process is widely recognized by various researchers. People’s decision regarding
how much to save and invest for future depends upon the trade-off between
immediate and future consumption. This tradeoff was modeled as a problem of
optimizing utility or happiness over life span. Within this framework, optimal
saving and consumption path depends on how much people value the
consumption at different times in the future (Modigliani and Brumberg, 1954;
Friedman, 1957). Risky asset fraction of the portfolio are positively correlated
with income and age and negatively correlated with marital status (Cohn, et. al.,
1975). Several studies have brought out the relationship between the
demographics such as gender, age and risk tolerance level of individuals.
The relationship between age and risk tolerance level has attracted much
attention. Biological, demographic and socioeconomic characteristics; together
with investors psychological makeup affects one’s risk tolerance level (Horvath
and Zuckerman, 1993).

It was found that social considerations, tax benefits, and provision for old age
were the reasons cited for saving in urban areas, whereas to provide for old age,
etc. was the main reason in rural areas (Gavini and Athma, 1999). A research
identified the factors considered by institutional investors as economic, industry
and company related. These factors influenced the supply and demand of
investments and thus their prices (Mugo, 1999). Investments are made with an
avowed objective of maximizing the wealth. Investors need to make rational
decisions for maximizing their returns based on the information available by
taking judgments free from emotions (Brabazon, 2000). India being second
largest populated country. Most of the Indian population earn their livelihood
through salary so scattered researches have been carried out in this regard. It was
revealed that there is an association between the lifestyle clusters and
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Interpretation:

investment-related characteristics (Rajarajan, 2000). There was an existence of

strong association between demographic characteristics and the risk bearing
capacity of Indian investors. The relationship between age, income and risk
bearing capacity of the investors were very high. The salaried members
constituted the largest part of all categories (Rajarajan, 2003).

CHAPTER 4
Data Analysis and
Interpretation

4.1Meaning

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Interpretation:

4.1.1Data Analysis

Data analysis is defined as a process of cleaning, transforming, and

modelling data to discover useful information for business decision-
making. The purpose of Data Analysis is to extract useful information from
data and taking the decision based upon the data analysis.

A simple example of Data analysis is whenever we take any decision in our

dayto-day life is by thinking about what happened last time or what will
happen by choosing that particular decision. This is nothing but analyzing
our past or future and making decisions based on it. For that, we gather
memories of our past or dreams of our future. So that is nothing but data
analysis. Now same thing analyst does for business purposes, is called
Data Analysis.

4.1.2DATA INTEPRETATION:

Interpretation refers to the task of drawing inferences from the collected

facts, after an analytical and/or experimental study. In fact, it is search for
broader meaning of research findings.
The task has 2 major aspects viz.,

i. The efforts to establish continuity in research through linking the

results of a given study with those of another, and
ii. The establishment of explanatory concepts. “In one sense,
interpretation is concerned with relationship within the collected data,
partially overlapping analysis. Interpretation also extends beyond the data

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Interpretation:

of the study to include the results of other research, theory and

hypotheses.”

4.2Importance:

4.2.1Importance of Data Analysis:

Among the many benefits of data analysis, the more important ones are:

• Data scrutiny helps in the structuring the findings from different sources of
data.

• Data analysis is very helpful in breaking a macro problem into micro parts.

• Data analysis acts like a filter when it comes to acquiring meaningful

insights out of vast data set.

• Data analysis helps into custody human bias away from the research
conclusion with the help of good statistical treatment.

When discussing data analysis, it is essential to state that a methodology to

analysis it is significant to mention that a methodology to analyses data
needs to be chosen. If a specific methodology is not selected data can
neither be collected nor analyzed. The methodology must be present in the
study as it enables to the reader to know which methods have been used
during the research and what type of data has been collected and analysis
of various methods and techniques that were measured but ultimately not
used for the data analysis. An effective research methodology leads to
better data collection and analysis and leads the researcher to arrive at valid
and rational conclusions in the research.

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Interpretation:

4.2.2Importance of Data Interpretation:

Data interpretation refers to the implementation of processes through

which data is reviewed for the purpose of arriving at an informed
conclusion. The interpretation of data assigns a meaning to the information
analysed and determines its signification and implication. The purpose of
collection and interpretation is to acquires useful and usable information
and make the most informed decision possible. From businesses, to
newlyweds researching their first home, data collection and interpretation
provides limitless benefits for a wide range of institutions and individuals.

Data analysis and interpretation, regardless of method and qualitative /

quantitative status, may include the following characteristics:

• Data identification and explanation.

• Comparing and contrasting of data.

• Identification of data outlier.

• Future predictions.

Data analysis and interpretation, in the end, helps improve processes and
classify troubles. It is hard to grow and create dependable improvements
lacking, at the very least, minimal data gathering and interpretation.

Following are few of the business benefits of digital age data analysis and
interpretation:

1. Informed decision making: A decision is only as the knowledge

that formed it. Informed data decision making had the possible to set

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Interpretation:

industry selected apart from the rest of the market pack. Studies have
shown that companies in the top third of industries are on an average 5%
more productive and 6% more gainful when implementing educated data
decision making processes. Most decisive action will arise only after a
problem has been identified or a goal defined. Data analysis should include
classification thesis improvement and data collection follow by data
communication.

2. Anticipating needs with the trend’s identification: Data insights

provides information, and information is power. The insights obtained
from market and consumer data analyses have the capability to set trend
for peers within similar market section. An ideal example of how data
analysis can impact trend forecast can be evidenced in the music
identification application. allows users to upload an audio clips of song
they like, but can’t seem to identify. User makes 50 million songs
identification a day. When industry wants to identified, they can then
provide a greater industry purpose. Data meeting and interpretation
processes can permit for industry wide climate forecast and result in better
revenue streams across the market. For this cause, all institution must
follow the basic data cycle of collection, interpretation, decision making
and monitoring.

3. Cost efficiency: Proper implementation of data analysis processes

can make available businesses with profound cost reward within their
industries. The recent data study performed by the Deoitte vividly
demonstrates this in finding that data analysis ROL is drive by efficient
cost reductions. Often this benefit is overlooked because money making is
typically viewed as sexier than saving money yet, sound data analyses have
the capacity to alert management to cost reduction opportunities without
any significant extortion of effort on the part of human capital.

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Interpretation:

4. Clear foresights: Companies that collects and analyse their data

gain better knowledge about themselves, their processes and performance.
They can identify performance challenges when they arise and take action
to beat them. Data interpretation through visual representation lets them
process their answer faster and make improved informed decision on the
expectations of the company.

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 Chapter 5
Conclusion and
Suggestions

5.1Findings

In the study the researcher has investigated that out of 100%, 90.9% knows how
much they spend each year and the rest has no idea about it.
Most of the people i.e., 49% saves 20-30% of their income, then 32% saves
below 20% and then 12.5% saves 30-40% of their income and very less people
saves above 40% of their income.
Nearly about 82.7% of the people has invested the saving so far and the rest has
not invested till now.

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 Almost 52.3% have a proper amount in their emergency fund, but 15.9% do not
have proper amount in their emergency fund, while 31.8% thinks that they have
proper amount in their emergency fund but are not sure.
According to research the most opted avenue are bank and mutual fund, then next
comes insurance, post office, gold, stock market, real estate and PPF.
The above avenue were opted according to safety purpose, diversified portfolio,
best returns, heath security, future benefits, appreciation of money, etc.
In the study the researcher has investigated that 53.8% which is almost more than
half who monitor their investment monthly, and 37.5% monitor occasionally
and very less people i.e., 8.7% monitor their investment daily.
Majority of people seek advice from friends and family then they gets advice
from Chartered Accountants, Local brokers, Magazines & Newspapers, Banks.
And there are some peoples who gets advice from YouTube.
Almost half of the respondents have investment horizon of 1- 5 years, 28.8%
invest for less than 1 year, 14.4% invest for 5 to 10 years and very less people
invest for more than 10 years.
The Major long term goal of investment are dream house, Health care followed by
retirement corpus, children’s future, wealth creation and lastly tax saving.
Past performance & Economic scenario are the major factor while making
decision of investment followed by company analysis, credit rating & Industry
analysis.
Returns, Safety of principle, Maturity Period are the major factors influencing
investment decision as almost half of the investor has invested their money
because of these factors & Tax saving, Risk and Goals are also factors
influencing investment decision.
Very less percent of investors are ready to take maximum risk of losing their
principle amount. They will be satisfied even if their investment grow at a
average rate but they don’t want any type. But there are also some person who
are ready to bear risk so that they can get higher returns but this type of peoples
are comparatively less.

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 Almost half of the investors want their investment to grow at an average rate,
28.8% want their investment to grow steadily, whereas only 17.3% wants their
investment to grow fast.
Mutual fund is the first preference given by the investor for investment followed
by bank, share market, gold, insurance, government bonds, SIP, FDs, Real
estate, etc.

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5.2Conclusion and Suggestion
Investment has different meaning for different investors. Some invest for high
return, some for wealth creation, and some for their future expenditure. The study
on Investment pattern of Salaried Individuals in Mumbai and Thane city has been
undertaken with the objective, to find and analyze the investment preferences of
salaried individuals of Thane. Human beings are rational. One invests according to
owns’ financial needs through planning and well-structured investment plan with
capital growth orientation. Government should provide tax benefits to ensure higher
investment rate in the country. Investment is a tool against risk coverage and
emergency needs. One can live safe and secured life if he continues to invest for
medium term. Long term investments may yield profitability. A caution is to be
taken that investments sometimes are not able to satisfy entire future family needs.
Investments are a tool against fighting or hedge against inflation. Salaried persons
today are aware of what is happening around them and are intelligent enough to
decide what is best for them. Every option is considered and the pros and cons of
each weighed carefully before the decision to invest the hard-earned money is taken.
They are able change their investment preferences according to the other changes
that happens are likely to happen in future. There are most of respondent who are
afraid of losing their capital because they don’t understand the complexity of the
invsetment instrument. Thus, they usually avoid modern invsetment avenues and
goes for the traditional investment instrument. In India, most of the investors goes
for either Gold when they have a little sum of money and when they have a lump
sum amount they usually goes for Real-estate. It is been an tradition in India most of
people avoid share market, as they see it as bet and they are afraid of market risk as
it is very much volatile. The boost to invest in share market must be done. After
pandemic hit now most of the people have started investing in share market and
saving for health care security. The respondent in the research are mostly have
heard the many investment but when it’s actually comes to invest they usually goes
for gold, real-estate, insurance and some of the share market and mutual funds. The
main reason respondent are not aware because they are not familiar with the
investment avenues. In order to stay financial sound one must invest as much as
they can but keeping the amount of risk they can appetite easily.

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Bibliography
Websites:
www.investopedia.comwww.britanni

ca.comwww.wikipedia.comwww.biz

fluent.comwww.grin.comwww.mana

vrachna.edu.inwww.gktoday.inwww.

investmentmanagementuk.co.ukwww

.accountlearning.comwww.monash.e

du/rlo/graduatewww.shodhganga

Book:
Vipul’s BMS Series Investment Analysis and Portfolio Management by P.K.

Bandgar and Farhat Fatma Shaikh.

Research Journal:
Research journal of Dr. P. Shunmugathangam – A study with special reference to
tiruneveli district.

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