Abstract:
The increased competition and enormously complex products in the financial services
industry make potential investors perplexed as to how to handle the choices they need
to make. The quality of the choices made by investors is shaped by a multitude of
factors. Nowadays, researchers in the field of finance have already been paying
attention to issues impacting individual investors’ investing preferences. The current
research being conducted in the Indian stock market intends to better understand the
factors that influence the investing decisions of individual investors. This study is
designed to investigate the factors that are affecting the stock preferences of individual
investors and also seeks to ascertain the relevant factors influencing their investment
decisions. An attempt is also made to know the effect of these on their socio-economic
variables in the context of the Indian stock market. In addition to the analysis of
ranking data, an independent t-test, Analysis of Variance (ANOVA) and relevant post
hoc tests were conducted to meet the objectives of the study. The results of primary
data analysis indicate that return, risk, and past performance of stocks are the three
major factors considered by individual investors while making investment decisions.
The present study contributes to the academic community’s interest in the micro area of
behavioural finance dealing with the mind and motivations of individual investors,
especially in the context of emerging markets. At the same time, the inferences drawn
from the present study can be used by future researchers to understand the current
preferences of individual investors on factors influencing stock investment decisions.
