Malaya Journal of Matematik, Vol. S, No.

2, 4009-4017, 2020

https://doi.org/10.26637/MJM0S20/1036

A study on investment analysis

Jerry Davis 1 and Magdalene Peter 2

Abstract
Investment analysis is a broad term for many different methods of evaluating investments, industry sectors,
and economic trends. It can include charting past returns to predict future performance, selecting the type of
investment that best suits an investor’s needs, or evaluating individual securities such as stocks and bonds to
determine their risks, yield potential, or price movements.
Keywords
Investment, Analysis, Study.
1,2 Department of Management Studies, Bharath Institute of Higher Education and Research, Selaiyur, Chennai-600073, Tamil Nadu, India.
Article History: Received 01 October 2020; Accepted 10 December 2020 c 2020 MJM.

Contents financial asset.

Based on the preferred risk, return and liquidity each
1 Introduction . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 4009 investors select an investment that his investment objective.
2 Scope of the study: . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 4009 Generic problem with reference to the behavior and strategy
3 Finding . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 4015
of the investors while investing in different products. It is a
common observation that the most of the short term investors
4 Suggestions . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 4016 who frequently interact with the market lose their investment.
5 Limitations of the Study . . . . . . . . . . . . . . . . . . . . . . . . . 4016 Hence there is a need to study the generic problem associ-
6 Conclusion . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 4016 ated with the investment pattern of different types of investors
in equity and derivative market.
References . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 4016

1. Introduction 2. Scope of the study:

Investment is the commitment of present period and also 1. The study will interact with different types of investors
the expectation of return or the benefit for such commitment depending upon the social, financial and personal status.
in future. There is always some risk involved in respect of 2. The study covers the various categories of investment
return and principle amount invested. opportunities available to the investors based upon their status.
Investment process comprises of following steps: 3. The study covers the investment pattern vis à vis differ-
1. Setting investor’s objectives and amount of investable ent types of investors using various tools and analysis.
wealth. 4. The study to focus the strength and weakness in the
2. Analysis of different assets, securities to identify those approach of the investors while investing in the various prod-
which are suitable for investment. ucts.
3. Constructing a portfolio of investment and determining 5. Finally the study will bring out the ways and means to
the proportion of wealth to be invested in each one. overcome the pitfalls in the investor’s approach and behavior
4. Periodic reputation of the above three step and improves while investing in different products. Try is given in financial
the portfolio in view of chancing situation. dailies and magazines. Companies are distinctly classified
5. Thus investing pattern based on the above investment to give clear picture about their manufacturing process and
processes will yield ample profit and minimize risk. products.
6. Investors tend to look at risk, return and liquidity charac- Company Analysis:
teristics while deciding on their individual preference pattern In the company analysis the investors assimilates the sev-
of investment. eral bits of information related to the company and evaluates
7. Each financial assets will have a certain level of these the present and futures values of the stock. The risk of return
characteristics. These, in some way determine the type of associated with purchase of the stock is analyzed to take better
 A study on investment analysis — 4010/4017

investment decisions. The valuation process depends upon the because of their big share of gross saving in the country. The
investor’s ability to elicit information from the relationship Regulators of the stock market cannot ignore the behavior of
and inter –relationship among the company related variables. individual investors. The study attempts to understand the
Technical analysis: behavior of individual investor in stock market, specifically
It is a process of identifying trend reversals at an ear- their attitude and perception with respect to the stock market.
lier stage to formulate the buying and selling strategy. With A survey is conducted to attain the objectives of the paper.
the help of several indicators they analyze the relationship Respondents are classified in to different categories on the
between price-volume and supply –demand for the overall basis of income, profession, education, education status, sex
market and the individual market and the individual a stock. and age. Primary data is collected from a sample around 50
Volume is favorable on the upswing the number of shares investors of Ambala district. Finally there are different factors
traded is greater than before and on the downside the number affect the individual investors such as their awareness level,
of shares traded dwindles. If it is the other way round, trend duration of investment etc.
reversals can be expected. Rajeev jain (2012) has conducted “A study on Investors
Technical Tools: Attitude towards Secondary market Equity Investments and
1. Dow theory Influence of behavioral finance” this study shall examine three
2. Volume of trading important attitude displayed by the investors. They are: ‘Ex-
3. Short selling pectations’ those investors have about the future performance
4. Odd lot trading of the stock market in India; ‘confidence’ that investors have
5. Bar and line charts regarding their investments; and ‘herd Instincts’ so investors
tend to herd together. Present study shall also analyze the
6. Moving averages, Oscillators
investors preference towards traditional trading and online
The research is based on opinion of investor’s investment
trading.
pattern towards stocks market and this literature is based on
Research methodology
the different researcher’ opinion towards stock market. The
Meaning of research
investment objectives is to select assets which have the maxi-
mum expected return in their risk class, otherwise stated, the Research in common parlance refers to search for knowl-
objectives is to maximize the investors expected wealth at edge. One can also be definite research as a scientific and
some preferred level of risk. The previous study which were systematic search for pertinent information on a specific topic.
studied by the researcher have been shown as follows. In fact, research is an art of scientific investigation. Research
is an academic activity and as such term should be used in
Akiko Kamesaka, et. al. (2003) has conducted “A study
technical sense.
on Investment pattern and performance of investor groups in
Japan” using weekly aggregate investment flow from Japan, 1. Systematic and organized effort to investigate a scien-
we study the investment pattern and performance of foreign tific problem.
investors, individual investors and five types of institutional in- 2. Identify the problem
vestors. Securities firm, banks, and foreign investors perform 3. Gather information
well over the sample period. Individual investors perform 4. Analyze data
poorly. We also find that foreign investor trading is associated 5. Take corrective action and solve the problem.
with positive feedback market timing and that this trading Definition of research
earn high returns. Alternatively, individual investors use pos- According to Redman & Mory define research as a “Sys-
itive feedback trading in their market timing but earn low tematic effort to gain new knowledge”. Research Design
returns. Consequently, we document evidence consistent with Research is an organized activity focused on specific with
information-based models (foreign investor). that guides the collection involving tools for analysis deriving
Kusdhianto Setiawan (2011) has conducted a study on logically sound inferences.
“The Dynamic Stock Market Integration: A Minimum Span- Research design is purely and simply the framework or
ning Tree Analysis” Stock market integration is integration plan for a study that guides the collection and analysis of
using the minimum spanning (MST) technique, a technique data. The function of research is to ensure that required data
that finds minimum total distance of edges that connect ver- collected are accurate and economically. The research design
tices (market). The distance measure is a transformed variable took for the study was descriptive research design.
of cross – correlation coefficient among the market return or Descriptive research design:
indexes. This paper found that stock market are clustered into It is provide an accurate picture of some aspects of internal
regional areas especially when market return in both local environment. Descriptive research is used when the objective
currency unit and US dollar values were used in estimating is to provide a systematic description that is as factual and ac-
correlation coefficient. curate as possible. It provides the number of times something
D.P. Warne (2012) has conducted “A study on invest- occurs, or frequency, lends itself to satisfied calculation such
ment behavior of individual investors in stock market” the as determining average number of occurrences.
individual investor plays an important role in the stock market Instrument for data collection:

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The primary instrument used in the study was the “ques- theoretical population and actual data when categories are
tionnaire”. The attitude scale was used to find out the different used. The main purpose is to serve as a tool to test.
factors pertaining to the opinion of the investor investment pat- 1. The goodness of fit
tern towards stock market it also consisted of structured and 2. The significance of association between two attributes,
close end question which was of multiple choice pattern edit- 3. The homogeneity or the significance of population
ing, tabulating and analyzing the information were recorded variance.
in a uniform manner. It is symbolically represented as X2 (pronounced as “Chi-
Questionnaire Square”)
The form of each question is also important. Closed end To test the null hypothesis – H0:
question include all the possible answer and subjective mat-
ters choice among them. Researcher had used closed-end
questions, which provide answer that are easier to interpret
and tabulate. Researcher also includes one open ended ques-
tion which helps to improve knowledge and investment in
stock market. Researcher had taken care in the wording and
ordering of questions. Researcher had used simple, direct,
unbiased wording questions, which are arranged in a logical
order. Sampling
Sampling as a process may be defined as a structured way
with which the items are chosen from given space be fitting
for research study. Sampling as such is a probabilistic process
with which the whole research depends upon as targets chosen
for study provided for relevant data to meet desired object.The
sample size for this study was 145.
Data collection method
Nature of data
The present study analyzes the investor investment pattern
towards stock market. Both primary and secondary data are
used in this study.
Primary Data
The primary data were collected from investors who have Chi – Square
invested in stock market of Yoga Securities limited with the
help of a questionnaire. Correlation Analysis:
Secondary Data This technique is used to determine the relative strength
The secondary data were collected from the different Jour- of the relationship which exists between two or more variable.
nals and Magazines. Its main purpose is to measure the degree of co variation
Research Methods between two or more variables. It is calculated as below.
1. Sample Analysis by Percentage (%) Method.
2. Chi-Square test
3. Correlation Analysis
Sample Analysis by Percentage (%) Method
Percentage refers to a special kind of ratio. % is used in
making comparison between two or more serried of data, %
are used to describe relationship. It can be used to compare Correlation Analysis:-
the relative terms, the distribution of two or more series if
data. The following hypotheses were formed and tested with sta-
Eqn % of Respondents = (No. of Respondents/Total)*100 tistical tools:
N = Total no. of respondents 1. There is relationship between annual income and
S.E = Standard error amount of investment.
T.V = 1.96(calculated at 95% level) 2. There is relationship between the investment experience
S.E=SQRT (PQ/N) and amount of investment.
Chi-square test 3. There is no significant difference between the opinion
The chi-square test is used to judge the significance of on safest form of yielding return and opinion on mutual fund
the population variance i.e. to make comparison between are better option to protect investment than stock market.

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 A study on investment analysis — 4012/4017

4. There is no significant difference between and their

willingness to take risk.
Company Analysis:
In the company analysis the investors assimilates the sev-
eral bits of information related to the company and evaluates
the present and futures values of the stock. The risk of return
associated with purchase of the stock is analyzed to take better
investment decisions. The valuation process depends upon the
investor’s ability to elicit information from the relationship
and inter –relationship among the company related variables.
Table – 1. Classification based on their risk bearing capacity

Fig.- 2. Classification based on their preference of companies

to investment

Table- 3. Classification based on their approach on investment

decision making

Fig.1. Classification based on their risk bearing capacity

Interpretation:
From the table, no investors are willing to take very high
level of risk, 31 per cent of investors are willing to take high
of risk, 60 per cent of investors are willing to take average
level of risk and 9 per cent of investors are willing to take low
level of risk in taking investment decisions.
Inference:
Most of the respondents were willing to take only average
level of risk in their investment decisions.
Table - 2. Classification based on their preference of compa-
nies to investment

Interpretation: Fig.-3. Classification based on their approach on investment

The above table shows that 33 per cent of investors prefer decision making
to invest in blue chip, 29 per cent of investors in midcap, 16
per cent in small cap, 23 per cent in future growth companies. Interpretation:
Inference: From the table one can understand that 33 per cent of in-
Most of the investors prefer to invest in blue chip compa- vestors make their investment decision based on fundamental
nies. analysis, 24 percent based on technical analysis, 12 per cent

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on broker’s advice and 21 per cent based on their friends and

relatives suggestions.
Inference:
Most of the investors bake their investment decision based
on the fundamental analysis.
Table - 4. Classification on the expectation of total return on
investment

Fig.-5.Classification based on the type of investment that

provides higher return

Interpretation:
From the table, 35 per cent of investors have the opinion
that investment in stock market provide higher return, 25
per cent of investors have the opinion that in Derivatives, 18
percent of investors said from commodities, 10 per cent of
investors said from Bank deposit, 10 per cent of investors said
from mutual fund.
Inference:
Most of the investors have the opinion that the investment
in stock market will provide higher return than any other
investment.
Table -6. Classification based on the type of current market
related investment

Fig.-4. Classification on the expectation of total return on

investment

Interpretation :
From the table, 13 per cent of investors expect less than
5% of total return, 19 per cent of investors expect 6-10%,
23 per cent of investors expect 11-15% and 45 per cent of
investors expect more than 15% of total return from their
investment over long term.
Inference:
Most of the investors expect more than 15% of total return
for their investment over long term.
Table - 5. Classification based on the type of investment that
provides higher return

Fig.-6. Classification based on the type of current market

related investment

Interpretation:
From the table 52 per cent of investors are currently deal-
ing with stocks, 5 per cent of investors are in derivatives

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segment, 23 per cent of investors in commodities, 18 per cent

of investors in Bank deposit and 2 per cent of investors are
currently dealing with mutual fund.
Inference:
Most of the investors are currently dealing with stocks
market related investments.
Statistical Tools
Chi- square Test
The chi – square test is used to find out if there any signif-
icant relationship between any two variables.
Chi- square Test: 1
Chi – square test of independence between opinion on
safest return and on mutual funds are better options to protect
investments than stock market.
Table – 7. Chi-square analysis

Calculated Value
The calculated value is 64.94
Tabulated value:
Degree of freedom; (r-1) * (c-1)
(5-1) x (5-1)
4x4=16
Calculation:
The table value at 5% level is 26.296
Hypothesis:
Hence the calculated value 64.93 is greater than the table
Null hypothesis (H0): The attributes are independent. i.e.,
value,
there is no significant difference between the opinion on safest
form of yielding return and opinion on mutual funds are better H0 is rejected and H1 is accepted.
option to protect investment than stock market. Inference:
Alternative hypothesis (H1): There is significant differ- There is a significant difference between the opinion on
ence between the opinions. safest form of yielding return on mutual fund are better option
protect investment than stock market.
Correlation Analysis
Aim: To determine the relationship between the annual
income and amount of investment in a year.

Inference:
Though there exists a low positive correlation between the
annual income and amount of investments of the investors,
the lower stage maybe due to the depression in the financial
market.

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years, 17 per cent of investors are coming within the limit of

51-60 and 7 per cent of investors are 61 and above.
3. 15 per cent of investors are in business, 56 per cent of
investors are in private jobs, 14 per cent of investors are in
government jobs, 9 per cent of investors are retired and 5 per
cent of investors are unemployed.
4. 24 per cent of investors have less than one lakh as their
annual income, 37 per cent of investors have 1-2 lakhs as their
annual income, 23 per cent of investors have 2-3 lakhs, 16 per
cent of investors have 3-5 lakhs and no investors have above
5 lakhs as their annual income.
5. From 145 investors, 21 per cent of investors have
increase in value, 60 per cent of investors have income gen-
eration, 12 per cent of investors have liquidity, 5 per cent of
investors have safety and 1 per cent of investors have others
as their primary objectives for their investment in stocks.
6. 17 per cent of investors have less than one years, 28
per cent of investors have 1-3 years, 24 per cent of investors
have 3-6 years and 31 per cent of investors have more than
five years of investment experience.
7. 41 per cent of investors hold their invested money for
¡1 years, 27 per cent of investors for 1-3 year, 19 per cent of
investors for 3-6 year and 14 percent of investors for more
than 6 year in long term investment.
8. 18 per cent of investors have very little, 22 per cent
of investors have some what, 31 per cent of investors have
moderate, 25 per cent of investors have good and 3 per cent of
investors have extensive familiarity with investment strategies.
9. 23,per cent of investors invest less than Rs. 10,000, 30
per cent of investors invest Rs. 10,001-20,000, 14 per cent
of investors invest Rs.20,001-30000, 16 per cent of investors
invest Rs.30,001-50,000, and 18 per cent of investors invest
more than Rs.50,000 in a year.
10. No investors said that they have high rate of return, 24
per cent of investors said that they have high rate of return, 56
per cent of investors said they have average rate of return and
3. Finding 20 per cent of investors said hey have low rate of return.
The study focused on the investor investment pattern to- 11. no investors are willing to take very high level of risk,
wards stock market with special reference to Yoha Securities 31 per cent of investors are willing to take high of risk, 60 per
Limited, T. Nagar, Chennai. The investment pattern of in- cent of investors are willing to take average level of risk and
vestors is being considered with different types of investors, 9 per cent of investors are willing to take low level of risk in
the different avenues of investments their preference towards taking investment decisions.
stock market and their positive and negative approach towards 12. 33 per cent of investors prefer to invest in blue chip,
investment. The primary data has been collected from the 29per cent of investors in midcap, 16 per cent in small cap, 23
selected investors, analyzed and various statistical tools have per cent in future growth companies.
been used to test the reliability of the data. 13. 33 per cent of investors make their investment decision
The following research findings are: based on fundamental analysis, 24 percent based on technical
1. 5 per cent of investors have done schoolings, 8 per analysis, 12 per cent on broker’s advice and 21 per cent based
cent of investors have completed their diploma, 47 per cent on their friends and relatives suggestions.
of investors have done their degree, 37 per cent of investors 14. 13 per cent of investors expect less than 5% of total
have completed their post graduate degree and 3 per cent of return, 19 per cent of investors expect 6-10%, 23 per cent of
investors have said others (M.Phil, Ph.Detc). investors expect 11-15% and 45 per cent of investors expect
2. 33 per cent of investors are under the age group of 20- more than 15% of total return from their investment over long
30, 28 per cent of investors are coming under the age group term.
of 31-40, 16 per cent of investors are within the limit of 41-50 15. 35 per cent of investors have the opinion that invest-

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ment in stock market provide higher return, 25 per cent of 5. The proportion of income invested in the stock market is
investors have the opinion that in Derivatives, 18 percent of low and the period of investment is also lower. This makes the
investors said from commodities, 10 per cent of investors said investor to become panic in the condition like global recession.
from Bank deposit, 10 per cent of investors said from mutual Investors should be aware of need for timely entry and exit
fund. strategies by learning fundamental, technical and information
16. 52 per cent of investors are currently dealing with related to markets.
stocks, 5 per cent of investors are in derivatives segment, 23
per cent of investors in commodities, 18 per cent of investors 5. Limitations of the Study
in Bank deposit and 2 per cent of investors are currently
dealing with mutual fund. 1. Study was done only in Chennai City
17. 27 per cent of investors have the stock markets invest- 2. The study expresses the opinion, which changes peri-
ments are the safest form of yielding returns, 13 per cent of odically.
investors have the opinion as derivative investment, 10 per 3. The time factor was a major constraint which limited
cent of investors commodities, 45 per cent of investors said as the scope of the study.
bank deposit and 5 per cent of investors have the opinion that 4. Personal bias also plays a role.
mutual fund are the safest form of yielding returns. 5. The study was conducted assuming that the responses
18. 38 per cent of investors strongly agree that global of the investors are genuine.
financial crisis has eroded the investment value, 53 per cent 6. Co-operation with respondent was lacking to some
of investors agree, 5 per cent of investors neither agree or extent due to lack of time and other factors.
disagree, 4 per cent of investors disagree and no investors
strongly disagree that global financial crisis has eroded the 6. Conclusion
investment value.
The analysis of this topic has revealed various components
19. 32 per cent of investors strongly agree that investment
of the investment and the types of investor’s attitude. With
in mutual fund is better option protect investment than in stock
growth of the economic conditions and revival of the market
market , 45 per cent of investors agree, 17 per cent of investors
conditions the brokerage firms will be in the position to im-
neither agree or disagree, 6 per cent of investors disagree and
plement the findings and the suggestions. It would serve not
no investors strongly disagree.
only as the guidance for the investors but also as the business
20. 26 per cent of investors were fully aware that the
potential for the brokerage firm.
derivative segment can protect their investment in stock mar-
Most of the investors are very sensitive about safety of
ket, 44 per cent of investors said that they were partially aware
their investment. They want more safety and reliability. Cur-
and 35 per cent of investors said that they were not at all aware
rent trend and easy access is not affected the investor as much
of derivative segment.
as safety and reliability. Most of the earning people invest
21. There is significant difference between the opinion on
their income up to different level in any sector, so investment
safest form of yielding return on mutual fund are better option
company have also very much scope of gaining business. Eq-
protect investment than stock market.
uity market is also popular among investors due to higher
22. Hence there is no significant difference between gen-
return, but due to uncertainty and lack of proper knowledge
der and their willingness to take risk in investment decisions.
investors do not invest in that sector. But investors who have
23. The exists a low positive correlation between the proper knowledge and willingness to take risk up to some
annual income and amount of investments of the investors, extent are investing in Equity market. Bank’s interest rate
the lower stage maybe due to the depression in the financial is also decreasing since last few years so, investors move to-
market. wards other avenues like mutual fund, bond, equity market
and others like land, gold, building etc. So, final conclusion
4. Suggestions on part is that investors of Yoha securities Ltd. are investing
their money with the balance of safety, reliability and return
1. There is an overall awareness of various product of on investment.
investment by the investors.
2. The investors are fully exploiting the benefits of the
stock market, which has the potential of higher return. References
3. It is suggested that the investors are to be educated with [1] D.P. Warne, Investment Behaviors of Individual Investor
strategies and risk containment measures. Periodic investors in Stock Market”, International Journal of Research in
education programmer will help the investors to protect their Finance & Marketing, 2, 2231-5985, 2012.
portfolio irrespective of the market conditions. [2] Rajeev jain “Investor’s Attitude towards Secondary mar-
4. Most of the investors are not aware of the benefit ket equity investments and influence of behavioral fi-
of derivative instruments, which can protect and yield high nance” International Journal on Emergining Technolo-
returns. gies, 392, 67-79. 2012.

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[3] Abdul Majeeb Pasha Shaik et.al. Investment Objectives of

the Retail Equity Investors in India, International Journal
of Social Science & Interdisciplinary Research. 7, 2277-
3630, 2012.
[4] Sukhwinderkaur Investor’s Perception towards Selection
of Mutual Funds Rather than Stock Market, International
Research Journal of Business and Management Vol. No.
V Pp. 2322-083X. 2013.
[5] S. Umamaheswari et.al A study on Investment pattern
and awareness of salaried class Investors in Coimbatore
district” Indian Journal of Research, 2(29), 2013.
[6] V. R. Palanivelu et.al. A study on Preferrrd Investment
Avenues among Salaried people with Reference to Na-
makkal Taluk, Tamil Nadu, International conference on
Business, Economics, and accounting. 20 -23, 2013.
[7] Kaushal A.Bhatt Investment and Trading Pattern of In-
dividuals Dealing in Stock Market The Standard Interna-
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[8] Kartikey Koti, “A study on Investors preference to-
wards stock market and other investment options
JRMBSS,2014.

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ISSN(P):2319 − 3786
Malaya Journal of Matematik
ISSN(O):2321 − 5666
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