The Behavior of Household Investors in Various Financial Instruments

Abstract

This study focused on understanding the behavior of households as investors in various financial instruments which are traded in markets regulated by SEBI and other instruments also. As investors, the households evaluate a variety of options available to them including those traded in formal markets under regulation. To this extent, the study has looked at a range of financial saving instruments. The study is based on random sampling of 100 household respondents of Rajkot city. It is estimated that there are 24.5 million investors in India. The study points to the relatively low rates of participation by the households in the securities market, though there has been growth in the investor population over the past 10 years. In this study there is deeper analysis of the economic well-being of the Indian population flowing through socio-economic and demographic indicators at the level of the household (e.g. rural–urban, sector of employment, major source of income, state of residence, social group), and chief earners (their occupation, education and age, etc.). These have significant bearing on earning, spending and saving.