perception of stock market investment with reference to
TRANSCRIPT
Perception of Stock Market investment with reference to Students
Studying in Karnataka.
Dr. Sharan Kumar Shetty
Associate Professor & Governing Body Member
Manel Srinivas Nayak Institute of Management, Mangaluru
ABSTRACT
Stock market is known as a pulse of developing economy, which reflects the economic conditions
of a country. The stock market is growing day by day and opportunities in the stock market are
also increasing rapidly. Investing in stock market is also contribution for economic growth of the
country. Few youngsters believe that, a career in the stock market is only for people with stable
finance or business background. People from all the educational backgrounds like science,
commerce or arts can also start their career in the stock markets. One of the surveys tells that
youngsters do not invest more in stock market. There might be students who are not still aware of
stock market. Even if they know about stock market, few students are still unaware to invest in
stock market. There might be several reasons for student for not knowing or not investing in stock
market. The most common reason is stock market has more risk and lots of investment, which is
not true. To find out the attitude of students towards the stock market, reasons for students not
investing in stock market and also to measure the level of student’s satisfaction in the investment
in shares. The research was done on the topic “Stock Market Perception of Students in the
Mangaluru District”
Key words – Stock market, Investment, Securities, Risk, Stock market awareness.
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INTRODUCTION
Stock is a term used to symbolize an investor’s ownership in a company. Those who own stock
are commonly called stockholders or shareholders. As a shareholder, an investor theoretically
owns a percentage of everything the company owns or owes. The company’s profitability or lack
thereof, determines whether its stock is traded at a higher or lower price. While trading of debt and
commodities has its origins in middle ages, the modern concepts of a stock market began in the
late 16th
century.
Stock market is the place where shares of public listed companies are traded. The primary market
is where companies float shares to the general public in an initial public offering (IPO) to raise
capital. Once new securities have been sold in the primary market, they are traded in the secondary
market, where one investor at the prevailing market price or at whatever prices both the buyer and
seller agree upon. The secondary market or the stock exchanges are regulated by the regulatory
authority. In India the secondary and primary markets are governed by the Security and Exchange
Board of India (SEBI). A stock exchange facilitates stock brokers to trade company stocks and
other securities. A stock may be bought or sold only if it is listed on an exchange. Thus, it is the
meeting place of the stock buyers and sellers. India’s premier stock exchange is the Bombay stock
exchange and the National stock exchange. Stock markets are the platforms where buyers and
sellers of shares meet and decide on s price to trade and earn great profit by investing wisely in the
company .By investing in company one can make money . According to these sayings “Youth of
today is the leader of tomorrow” we are mainly focusing on student’s attitude and behaviors
towards stock market.
OBJECTIVES OF THE STUDY
• To study the extent of stock market perception of the students.
• To measure the level of student’s satisfaction in the investment in shares.
• To find the reasons for students not investing in stock market.
PROBLEM STATEMENT
This study was conducted among the students from the age of 18years to 24 years throughout
different colleges and places. This research was conducted to know the various factors affecting
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students for not having proper awareness about stock market, reasons for students not investing in
stock market and also to find the attitude of student towards stock market by considering various
factors and using methodologies. To find the various reasons behind students for not investing in
stock market.
REVIEW OF LITERATURE
Review of literature benefits a researcher to get familiarized with our selected research problem
and also may provide some guidelines in selecting a proper research methodology. Moreover, it
helps in finding out the research gaps in the existing literature. This will help the researcher in
fine-tuning their research problem and methodology. Another benefit of reviewing the existing
literature is that in cases where the research problems are similar, the conclusions and findings
may be easily compared. It will help the researcher to determine if their findings are practically
capable of working successfully or not.
Seth et al. (2010) conducted a study examining the awareness about financial instruments and
reported that around 96 per cent of Indian investors have savings account in the banks, but only
around 30 per cent had knowledge about National Savings Certificate & Public Provident Fund
Korea (2013)6 in their article titled “An Analytical Study: Relevance of Financial Inclusion for
Developing Nations” The study focused to analyze the current status of financial inclusion in
Indian economy and to explore the significance of financial inclusion for social development of
society. The study stated that, to achieve inclusive growth, India has to look upon the financial
inclusion aspects.
. Bind (2013)5 the Ph.D thesis titled “Financial Literacy and the Income Level Influences on
Savings And Investment Pattern of Urban City” The study aimed to analyze the level of financial
literacy levels and the income level influences on savings and investment pattern of urban city
households in the Coimbatore City., the study reveals that young investors in the age category of
25-35 years are more interested in investing in financial market products, than the adult investors
in age grouping of 40 years and above study identified that people choose safe mode of saving or
investment.
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Radh (2015)26in their article titled “Investors’ awareness towards investment in corporate
securities: a micro level study”. The study attempted to 34 find the awareness of individual
investors in corporate securities in Chennai. The study reveals that the investors’ socioeconomic
factors have significant influence on investors’ awareness. The study also disclosed that the use of
information sources to know their awareness of corporate securities.
Brian C. Rezny, CFP President, Rezny Wealth Management, Ltd.: The review shows there are
some common mistakes made by the investors while taking investment decisions. The researcher
noted that these common errors are investment myths, lack of knowledge and greed of the investor.
The researcher has found that the haste and greed are the problems to fall in the investment market.
Nash (2012), that is, 98 per cent of Indian citizens do not have a Demat account, and thus lack
awareness about stock markets. Although many studies have been carried out in parts of the
country and abroad, as mentioned earlier, in India a limited number of studies have been conducted
in this area. Thus, it is against this backdrop that the present study has been undertaken to fill up
this gap and make a modest contribution in the field.
Thilakam (2012) in his study found that the financial knowledge of rural masses in India is very
much limited to the traditionally known savings and investment avenues like bank saving, holding
insurance policy, investment in equities, gold or in land/building. Similar inferences were drawn
METHODOLOGY
The method used for this research is quantitative approach to provide and gather as much
informative and relative evaluation quantitative method was used. This method includes the use of
questionnaires. The questionnaires were sent through personal contact. A questionnaire was used
as main data gathering instrument for this study .It was divided into two main sections : the profile
and the questionnaire .The profile contains socio-demographic characteristics of respondents such
as email ID ,age, gender , and educational background and the questionnaire contains factors
affecting our study.
The sample collected in the survey by 160students in the South Canara District of Karnataka.
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RESULTS
Collection of data is an important element of research from which we can arrive at useful findings
and conclusions. Primary data was collected through the help of Google form, which was sent to
the youngster of the age group of 18 to 24, the study, aims at this age group because “Youth of
today is the leader of tomorrow”. People of this age might be tough about stock market. Data was
collected from 160 students mainly from state of Karnataka, Kerala, and Maharashtra. Collected
data was analyzed and presented with the help of charts. Detailed analysis has helped the researcher
to draw a clear picture of the student’s awareness towards stock market.
Demographic factors:
Demographic factors are the study of a population expressed statistically, such as age, sex,
education level, income level, marital status, occupation, religion, birth rate etc. These are factors
that are used to define the characteristics of a person or a population. Since our study is based on
student’s awareness towards stock market. Student’s data is collected about their age, gender,
educational background, region etc. The study is mainly based on students of the age 18-24. There
are students who are currently graduating, and few might have completed and looking up for
further studies. We aim at this particular age group because the students get a clear idea about the
economics conditions and other factors about their life.so; we think this age is the best age for
students to know about the stock market. And the students get an idea about investment.
Gender:
The chart below shows the classification of students as per their Gender.
Gender No of Students
Female 104
Male 56
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The data shown below clearly exhibits that female students have more interest in investing in the
stock market as their focus is in the savings and investments. This witnesses that the female
students must be given lot of awareness in the colleges so that they will encourage other members
in the family which shall help the society as a whole. As the saying goes if you teach man he just
use it for him only but the girls will share it with everyone.
Thus, the sample shows that females students are very much interested in the investment in stock
market.
Educational background
The below charts show the educational background of all 160 students.
Educational Background No of
Students
Commerce 124
Science 28
Arts 8
Gender
35%
65%
Female
Male
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Region
55%%
90%
Karnataka
Kerakla
Maharastra
The students with the basic background of Commerce are aware about the stock market
investment. This is because of their knowledge in the field as they study the subjects like Financial
Management, Management Accounting and other relevant subject which shall help them to
understand the fundamentals of the securities. The other outcome of this survey shows that the
authorities can focus on involving more and more commerce students into the process. This will
give positive impact to the financial market.
Region:
Below charts show the region of students Participated in this Survey.
Region No of Students
Karnataka 144
Kerakla 8
Maharastra 8
Educational Background
185%%
77%
Commerce
Science
Arts
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The survey shows that students studying are mainly from the Karnataka. The other states like
Kerala and Maharashtra are very less when it compared with Karnataka, Chart shows that out of
160 students, 141students belong to Karnataka state.11 students belong to Kerala state. 8 belong
to Maharashtra state.
Savings detail
The below charts show about saving students expected to have
Savings Information No of Students
0 40
< 2000 72
2000-5000 36
5000 < 12
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The Chart shows 45.6% expect to have less than Rs.2000 saving. 25% have no saving. 23.1%
Students have between Rs.2000-Rs5000 saving. And only 10% of students have more than Rs
5000 saving. This clearly exhibits that saving habits in the students have been come down due to
lack of awareness about the investment. This issue has to be solved through the effective
implementation of financial awareness programmes through the support of government and the
private organizations at a large extend which shall facilitate youth to invest in the different avenues
of the financial market.
Saving Information of
Students
8%
25%
22%
45%
0
< 2000
2000-5000
5000 <
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Chi Square Test
Null Hypothesis: Savings habit and gender are independent
Gender * Saving detail Crosstabulation
Count
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Saving detail Total <2000 >5000 0 2000-5000
Gender Female 56 8 20 20 104
Male 16 4 20 16 56
Total 72 12 40 36 160
Chi-Square Tests
Value
df
Asymptotic
Significance
(2-sided)
Pearson Chi-
Square 10.549
a 3 .014
Likelihood Ratio 10.716 3 .013
No. of Valid Cases 160
a. 1 cells (12.5%) have expected count less than 5. The minimum
expected count is 4.20.
The hypothesis of independence of savings habit and gender is rejected. (Chi square value
=10.549, P- value =0.014)
Choice of Investment
The following chart shows students choices in investment
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Option to
Choose for…
39% 32%
19% 10%
Bank
Deposit
Mutual
Fund
Option to Choose for
Investment
No of Students
Bank Deposit 51
Mutual Fund 17
Gold 30
Stock Market 62
Following chart shows that, 61.3% student refer to invest in bank deposit, 25.6% students in stock
market, 6.9%student in gold/ real estate, 6.3%students refer to invest in mutual fund. The sample
collected really shows that students still focus on traditional way of investment as they are not
aware of the modern financial tools available in the market and also they are not ready to take risk
in the stock market products. There is a gray area to bring lot of knowledge to the stock market
products into it.
Students Perception about stock market
The below chart shows students awareness about stock market
The above chart shows 71.9% (115) students are aware of stock market and 28.1% (45) students
are not aware of stock market. Even though the students are aware of the stock market services,
they are not ready to invest in the avenue due to lack of courage and they are not ready to take risk.
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Knowledge about
Stock Market
13%
24% 51%
12%
Education
Institute
Family & Friends
Social Media
The curriculum must support them to go with stock market instruments which will give high risk
provided getting involved in high risk.
The following data collected from student who were aware of stock market:
Knowledge about stock market
The following data was collected from 115 students who were aware of stock market.
Knowledge about
Stock Market
No of Students
Education Institute 81
Family & Friends 20
Social Media 39
Others 20
The above chart shows that 73% (84) students came to know from educational institute. 24.3%
(28) students came to know from family and friends. 22.6% (26) came to know from social media.
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Student opinoion about
stock market
19%
10% 58%
13%
All the above
Money Making
Risk Taking
Time consuming
And rest of the 7% (8) students came to know from other sources. The educational institute acts
as a guide in spreading the awareness of stock market which will help all the students to understand
the efficacy of the investment and that will automatically bring importance of investment.
Students opinion about stock market
Following graph shows the students opinion about stock market,
Student opinion about
stock market
No of
Students
All the above 93
Money Making 21
Risk Taking 15
Time consuming 31
The above chart shows that 33.9% (39) think stock market is risky.28.7 %( 33) thinks stock market
is money making.5.2 %( 6) think it is time consuming and 47 %( 54) thinks all the following
content in it. This exhibits the idea of stock market is always risky in nature as they are totally
thinking this stock market product is very risky.
Best age to invest according to students:
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Best Age to Invest
13% 21%
30%
36%
<18
18-24
25-50
50<
Following charts shows what thinks is the best age to invest in stock market
Best Age to Invest No of
Students
<18 34
18-24 58
25-50 48
50< 20
The above charts show 60% of students believe that 25-50 is the best age to invest in stock
market.37.4% thinks 18-24 is the best age to invest in stock market. People believe that best age
to invest is below 18 and rest of the student believe that best age to invest is after 50
Students View on Stock Market contributes to Economic Growth .
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Stock Market Contributes to
Economic Growth
41%
59%
Yes
No
Following charts shows what students think investing in stock market is relating to economic
growth.
Stock Market Contributes to
Economic Growth
No of
Students
Yes 141
No 199
Above charts shows that 83.5% believe that stock market effects the economic growth. And rest
16.5% believe that stock market does not affect the economic growth of the country. Even if the
people know that investing stock market effect the economic growth of the country people are not
willing to teach or invest in stock market considering the demerits of stock market.
Demat account
Following charts shows whether students who know about stock market has de-mat account
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Demat Account Holders
12%
88%
Yes
No
Demat Account
Holders
No of Students
Yes 141
No 19
The above chart shows 86.1% don’t have De-mat account. And rest 13.9% have De-mat account.
Which shows even if people are aware of stock market people didn’t get good flat form to open
de-mat account.
Following questions were asked to all
Do educational institutions encourage stock market
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Do Education Institutions Encourage
Students in Stock Market Investment
30%
70%
Yes
NO
Educations
Institutions
encourage Students
to investment in
Stock Market
No of Students
Yes 112
NO 48
70% students believe that educational institute encourages stock market were rest 30% believe that
educational institution does not encourages stock market. This tells that all the educational institute
doesn’t encourage stock market and don’t teach more about it.
Do you think Indian government encourages stock market?
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Encouragement by the Government
to invest in stock market
53% 47%
Yes
No
Encouragement by the
Government
No of Students
Yes 76
No 84
From the above graph we can tell that 53.1% tell government is not encouraging others to invest
to stock market and rest 46.9% this government is encouraging to invest in stock market. Which
tells that government is not encourageing youngsters to invest in stock market.
Practical knowledge about stock market
Practical Knowedge about the Stock Market No of Students
Yes 151
No 9
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Above graph shows that 96.3% tells practical knowledge about stock market has to give to students
.and rest 3.7% students tells no need of giving practical knowledge. Which tell most of them belie
practical knowledge has to be given to students about stock market and show them practically not
theoretically.
Recommend others about stock market
Ready to Recommend otthers to Invest No of Students
Yes 153
No 7
Practical Knowledge about the Stock
Market
6%
94%
Yes
No
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Above chart shows that 48.8% students are not sure about recommending this to others, 47.5%
recommend others to invest in stock market and rest do not recommend others about stock market.
Which show that people are not that much aware of stock market so most of the students are not
sure in recommending others about stock market?
DISCUSSIONS
The study mentions that people consider fixed deposits in banks as the most effective financial
instrument followed by stock market. They are also using the traditional way of investment i.e.
bank deposit, fixed deposit, gold, silver, land, property etc. Simple principle of investment is high
risk, high return and low risk low return, so if one wants high returns, they must take risk. Proper
knowledge about stock market has to be given to youngsters. Government should bring awareness
among people about stock market and give them more opportunity to invest in shares. Economic
growth of country is influenced by investment decisions. Advice about stock market must be given
to youngster. Not only about stock market but the step involved before investing has to be tough
to students.
DEMAT account has to be given to a student from educational institution collaborating with any
certified brokers Investment in stock market has to be the part of educational system. Partial
Ready to Recommend Others to
Invest
4%
96%
Yes
No
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knowledge about investment should be given to students Media must provide news about stock
market. Research strongly felt that there is a need of giving practical knowledge about stock market
to students. The study highlights that students thinks that stock market as a time-consuming risk
taking due to various factors so students must be given proper awareness about stock market and
encourage them to invest in stock market which indirectly effects the economic growth of the
country. The educational institution has to encourage student to participate in stock market and
has to give practical knowledge about it. Not only educational institution but also government and
media have to give proper awareness about stock market. People have to be properly known
ledged about stock market before spreading wrong rumors about stock market. Even parents can
encourage their children to participate in stock market along with them instead of misleading them
about stock market and keeping age limit as a bearer.
REFERENCES
• Anand, Shefali, 2006, Mutual Fund Hot Spot: India, Wall Street Journal - Easter Edition, Vol
247, Issue 57, ppC1-C3
• Bogle John C, November-December 1970, Mutual Fund Performance Evaluation, Financial
Analysts Journal, pp 25-33.
• Carhart, Mark M, 1997, On Persistence in Mutual Fund Performance, Journal of Finance,
Volume 53, pp 57-82.
• http://shodhganga.inflibnet.ac.in:8080/jspui/handle/10603/232011
• http://hdl.handle.net/10603/155862
• https://www.indiatoday.in/education-today/jobs-and-careers/story/how-to-make-a-career-in-
stock-market-1595909-2019-09-05
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