Investor Psychology.

Essay by balajirulesUniversity, Master'sA-, October 2005

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Investing is a method of saving that people follow in order to have a long term pecuniary independence. Man is a rational animal who has learnt the art of saving money with the primary objective of being financially secured in the long term.

For the purpose of having a better understanding of the results of the survey that is presented in the following section, it is necessary to first introduce the Indian capital market as well as the economic scenario in India. In India, there are various options of investments a person can choose from, to invest his hard earned money.


Investments of individuals based on short term and long term can be mainly classified as follows. They are:

Bank Deposits:

A bank is a financial institution that accepts deposits and makes loans. Types of banks include commercial banks, savings and loan associations, mutual savings banks, and credit unions.

Deposits may be again classified into

Savings Deposit: This is the type of investment for which an investor schedules his deposit which he if free to withdraw according to his needs. The savings deposit in India currently yields many benefits to the investor.

Fixed Deposit: These are the types of investment which are interval in nature and cannot be withdrawn periodically. Thus a investor can safely invest his money according to the needs which cater to him.

Current Deposits: Under this type of investment a major contributor would be the savings in the Post Office. Here the rate of return ranges from about 9% to 10%.

Bonds - A bond is a token issued to an investor in exchange for a loan of money. These are again of two types. They are a) Government Bonds and b) Private Bonds. The company or government...