Investment behavior of short-term versus long-term individual investors of PAN India – An empirical study

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Investment activity, followed by household and external savings, often plays a decisive role in strengthening the financial status of individual investors, as it contributes to further increases in wealth. This study analyzes the investors’ investment motives and actions to find better investment strategies and to do a systematic review of the investment behavior available for both short- and long-term individual investors. The study is mainly focused on factors and priorities influencing investment decisions. The data were obtained using the questionnaire approach from 201 individual investors within the age group from 18 to 80 from different parts of India. Every individual investor’s risk-tolerant score has been calculated on the basis of the investors’ holistic behavior, namely, investors with high-risk appetite, investors with a moderate and low-risk appetite. Non-parametric tests are applied to evaluate the behavioral approach of investors that are differently correlated to these factors. T-test is used to distinguish between the population mean of short-term and long-term investors’ risk-taking ability and priority of safeguarding the principal over return preference, rather than identified investment factors. As a result of the study, the factors influencing the investors’ decisions were found: income level, market participation experience and risk-return proportions, rather than age, gender, risk-taking ability and investment priority. This study enhances the existing literature by analyzing income, risk-return proportion and investment experience factors that influence investment decisions.

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    • Table 1. Expected frequencies of the impact of gender on short and long-term investment
    • Table 2. Expected frequencies of impact of age on the ability to take risk in the short and long term while investing.
    • Table 3. Expected frequencies of the impact of income on the level of investment while investing in the short and long term
    • Table 4. Expected frequencies of the impact of an advisor on short and long-term investor opinion or investment behavior
    • Table 5. Expected frequencies of the impact of investment priority between short and long-term investors
    • Table 6. Expected frequencies of the impact of the years of market participation on investment of short and long-term investors
    • Table 7. Expected frequencies of the impact of taking different levels of risk on the investment of short and long-term investors
    • Table 8. Expected frequencies of the impact of risk and return factors considered before investment on the decisions of short and long-term investors
    • Table 9. t-test: Two-sample assuming equal variances
    • Table 10. t-test: Two-sample assuming equal variances
    • Table A1. Classification of investors
    • Table A2. Classification of investors based on growth expectations
    • Conceptualization
      Kannadas S.
    • Data curation
      Kannadas S.
    • Formal Analysis
      Kannadas S.
    • Investigation
      Kannadas S.
    • Methodology
      Kannadas S.
    • Project administration
      Kannadas S.
    • Supervision
      Kannadas S.
    • Validation
      Kannadas S.
    • Visualization
      Kannadas S.
    • Writing – original draft
      Kannadas S.
    • Writing – review & editing
      Kannadas S.