Investment Behavior of Women: A Conceptual Study

*Dr. Sanjeet Kumar **Prashant Kumar

* Assistant Professor, Dept. of Business Administration, Chaudhary Devi LaL University, Sirsa,
125055 Haryana
** Research Scholar, Dept. of Business Administration, Chaudhary Devi LaL University, Sirsa,
125055 Haryana. Email: [email protected]

ABSTRACT
Today’s women are financially independent and ready to pool their savings in a profitable
avenue to maximize their wealth. Women investors are participating frequent in investing
activity and do not make sound investment decisions. Investment is important for the wellbeing
of individuals and for the economic development of a nation. Investing money is a very complex
task because of number of investment companies and products offered by them, terms and
conditions of investment and complex rules and regulations. As the investments in some avenues
are subject to high risk, the investors have to analyze the various alternative investments in terms
of risk and returns associated with them. There are number of investment options are available.
There are various investment avenues such as Savings account, fixed deposits, Government
Securities, Corporate Bonds, Insurance policies, Real estates, Commodities, Shares and Mutual
funds, Chit Funds and Gold and Silver. The investors invest their savings in the above
mentioned avenues depending on their risk taking attitude. While taking investment decision, the
behavioral aspects, awareness level of investors, risk attitude, investment habits, common
understanding of market play an important role in making a sound investment decision. The
present study intends to present the detailed overview of previous studies on investment behavior
and pattern of women.
Key Words: Investment, avenues, share market, women, review
Introduction
The people usually invest their savings where they can get maximum returns and safety of their
money. Investment activity is essential for the growth and development of a nation. The
individual investor plays an important role in the stock market because of the big share of their
savings are invested in the country. The decision of making investment is always based on the
relationship between risk and return. The term investment means employment of funds in any
assets and securities with the aim of earning return or capital appreciation. Investment is the
allocation of funds to the profit generating asset in future. Investment is an economic activity
which generates capital needed for various sectors of economy. The selection of investment is a
difficult task which requires considerable skills and knowledge for analysis of available options.
Moreover, a sound investment decision in stock market may lead to the higher return and
maximum satisfaction. But it seems difficult for people to analyze the various options to find out
suitable investment avenues because of lack of awareness whereas people don’t know even
where to invest and how much to invest. Therefore, analysis of behavior of investors is essential
to find out various positive and negative aspects of investment in stock market.
Women are financially independent nowadays. Women are actively participating in investing
their savings by analyzing the various factors such as degree of risk associated with investment,
influence of family members and friends and the capability of investing in modern and
innovative investment avenues.
The main objective of this study is to present concept of investment behavior and patterns of
women and explore the detailed review of previous empirical studies on investment behavior of
women.
Research Methodology

This is a theoretical research based on previous researches undertaken by researchers on

investment behavior of women. Other secondary sources including books, magazines,
newspapers, working and discussion papers and government websites were also used. The
descriptive approach has been used.
Analytical review
The review of previous studies has been summarized as:
Lusardi et.al (2009) explored the reasons for not investing in the stock market. The study was
conducted on 7,138 respondents in US. The findings depicted that ignorance of investors towards
the various factors was the basic reason of poor investment decision. There are various reasons
such as lack of awareness, lack of participation and poor borrowing behave of the investors.
Kathirvel and Mekala (2010) made an attempt to examine the investment behavior of investors.
The study was carried out on 150 women respondents of Coimbatore district in Tamilnadu. The
results found that lack of knowledge about the stock market and different investment options
prevents women for investing in share market. The authors concluded that insecurity and high
volatility in stock market are the concerned issues for women investors. Hanmugasundaram
(2011) evaluated the factors influencing the decision of investors for investing in the stock
market. The behavioral dimensions have been analyzed for the investors in in Tamilnadu. The
study depicted that small investors are still dependent on the advice of others such as companies
and financial advisors. This reflects the low confidence of investors for taking the decision. The
results found that investors behave differently during the changing market conditions. Kukreja
(2012) measured the perception of the investors for investment in capital market. The present
study has been conducted on 120 investors of NCR region. The finding suggested that age of the
respondents significantly affects the investment decision and education had significant impact.
The study used 119 variables to examine the perception of investors and these variables
ascertained 72% impact in measuring the perception level. The study concluded that investment
benefits and influences had high relevance in stock market investment. Kaur and Vohra (2012)
identified the various reasons that stop the women from investing in the stock market. The
findings revealed that the participation of women in stock market is limited due to lack of
knowledge and education about the stock market. The authors concluded that specific and
relevant information should be provided to women to ensure their proper dealings in stock
market. The various steps like conducting educational workshop to make them aware about the
various investment avenues should be undertaken. Bhatt (2013) made an attempt to measure the
perception of working women for making investment in stock market. The findings indicated
that working women make their investment in various avenues. It was observed that there is no
significant relationship between the education level and investment decision and there was found
significant relationship between the age of the women and income level. Durga rao et.al (2014)
analyzed the various investment areas available for investment. The stock market enhances the
funds raising capacity of firms and channelizes the household savings to profitable avenues. The
authors opined that stock market dealings are easy and simple if the investors have proper
knowledge about the all aspects of the stock market. The investment patterns of investors depend
on their risk level and attitude of investors and it is important in understanding the stock trading.
The investors mainly invest in mutual funds, insurance and shares. The authors concluded that
awareness programs and seminars for investors are still needed. Goyal and Sharma (2014)
examined the risk bearing capacity of the investors and explained that investment is the common
issues for middle class families to meet their future expenses. The authors investigated that
investors have adequate knowledge of various investment options such as bank deposits, real
estate and bullions but investors are not more aware about the stock market instruments like
share, debenture and bonds. The study revealed that investors had misconception regarding
investment in share market as they opined that share market means more fluctuations in returns
and high risk which leads to huge loss. The effective programs and policies should be formed to
create a sense of security in share market. Koti (2014) examined the behavior of investors for
various investment avenues and perception of investors of Hubli region towards stock market.
The findings showed that investors make investment because of buying home and keeping their
future safe. These are the main goals of investing their money in stock market. The authors
concluded that Investors usually prefer investment in bank deposits and their effective
investment source was internet, family and friends. Mistry (2015) attempted to investigate the
behavior of investors in stock market and their perception and attitude for different avenues. The
preferred source of information which influences the decision of investment by the investors was
highlighted. The 150 investors in Bharuch were selected for analyzing their psychology
regarding investment in stock market. The findings depicted the positive relationship between
the decision making of investors and market conditions. Most of the investors had not considered
the financial factors before investing in stock market. Kavitha (2015) analyzed the relationship
between the attitude of investors and stock market investments. The results showed that that
there was found significant relationship between the attitudes of investors and investment in
stock market. The study suggested that positive attitude of investor leads to the effective trading
in stock market due to the introduction of appropriate strategies. There was found significant
relationship between the perception of investors for stock market and their attitude to participate
in dealings. The study concluded that stronger regulations for stock market should be enforced to
ensure the protection of investors. Lokhande (2015) studied the level of awareness of rural
investors for investment in stock market and for various investment options. The 300
respondents of Aurangabad have been engaged to know their preference for investing in stock
market. The study was carried out only on the rural investors to examine the differences between
the awareness level and qualifications of rural investors. The study found out no significant
difference in awareness level and education level has been observed. The rural investors were
focusing more on the government banks due to safety and security of their funds. The second
priority of investors was gold followed by real estate indicating the traditional view of investors.
Apparao and Babu (2015) highlighted the awareness level of investors of Andhra region, their
investment pattern and various options available for investment. The findings suggested that
adequate knowledge of various investment avenues leads to the sound decision making about
investment. The risk level and return associated with a particular investment depends on the
choice of the investors. There are several investment avenues such as saving certificates, mutual
funds, provident fund, insurance scheme, equity, bonds and debentures, postal savings and real
estate. Sathiyamoorthy and Krishnamurthy (2015) highlighted the awareness level and
investment pattern of working people in Tiruvannamalai district of Tamilnadu. The investors
distribute their savings in various investment avenues to earn higher return. Most of the chose for
safety and selected the fixed deposits as most preferred avenue for investment. There were
factors such as age, education, gender, family size and income which influence the decision of
investment. The respondents saved their money in bank deposits for the safety purpose and the
most commonly preferred investment avenues are investment in banks. The purpose of investing
money is children future, marriage, education and for other purposes.
Shanthi and Murugesan (2016) described the objectives of women investors for investing in
stock market. The study was conducted on 60 women respondents in Namakkal district of
Tamilnadu. The results reflected that the women investors invest in stock market with the
objectives of appreciation of money, security and income stability. The authors concluded that
working women prefer safety and higher return regularly on their investment but full awareness
is still needed for women and government should take effective measures in this regard.
Banumathy and Azhagaiah (2016) evaluated the level of awareness of investors for investing
in stock market. The primary data were taken from 290 investors of Puducherry. The findings
suggested that there was significant difference between the awareness level of male and female
for stock market and there was observed significant difference among qualification, age and
occupation of the respondents with reference to awareness level. Jisha and Gomathi (2017)
analyzed the investment and income pattern of respondents that were the working women in
Coimbatore. The main objective of the study was to ascertain the relationship between the
income and investment of the women employees. The results showed the major impact of
income level on the savings of employee and the working women preferred safety and regular
return on their investment. The women had different expectations from the investment depends
on their nature such as most of the women wanted capital appreciation, interest and long term
saving. The study suggested that a sound investment decision depends on the adequate
knowledge and skill required for stock market. Sarkar and Sahu (2017) attempted to highlight
the importance of demographic aspects and risk attitude of investors to analyze the investment
behavior. The survey was conducted on the investors of in West Bengal region. The authors
found out that the investors whose age falls in the category (28-37) generally invested more as
compared to other respondents of the study. Most of the investors were found well educated and
qualified. The majority of the investors were belonged to the business class indicating that
generally business man takes more interest in share market investment.
Kumar Sarkar and Nath Sahu (2017) explored the investment behavior, awareness and risk
attitude of 500 investors selected from the districts of West Bengal. The study revealed the
significant impact of awareness and risk attitude on the investment behavior of individuals. The
authors concluded that investors are moderately aware about the working of stock market and
considered the financial awareness more reliable than social learning. The risk attitude of
investors were found in sound position and based on the cognitive ability of investors. Malathy
and Saranya (2017) explored the factors which directly influence the perception of investors for
investment in stock market. The study found various factors such as return and risk level,
profitability, share price, market demand, dividend policy, company image and financial
performance. These factors highly affect the decision of investment and some of the factors were
ranked highly such as return on investment, company image, dividend policy and financial
performance. The investors considered return on investment is the most significant factor which
influence the investment decision because to earn expected return is the main aim of investor.
Assefa and Rao (2018) examined the investment preferences for various investment avenues.
The data were collected from working employees in Wolaita Sodo, Ethiopia. The findings
showed that the overall level of awareness of investors in Ethiopia is low, and most of the
respondents were not aware about financial concepts related to stocks, bonds, mutual funds, and
the compound interest. The respondents had the similar orders of preference for all investment
avenues.
Conclusion
The present research focused on various previous empirical studies on investment behavior of
women which suggest the suitable investment strategies for the women investors because a
thoughtful investment decision in stock market is essential for growth and development of an
economy. The analysis of previous studies will help the future researchers in accurately
measuring the behavior of investors about the investment options and the need of investors.

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