An Analysis of Risk Perception and Investment Portfolio Management Among Equity Investors

Abstract

Risk is a crucial factor for any investor in making all types of financial investment .It is a psychological and mental process of decision making based on an individual’s frame of reference that changes from time to time. This summer internship explores individual investor’s preference for portfolio choices and investigates impact of risk tolerance and risk perception on their investment decision. An attempt is also made to understand the factors affecting risk appetite of a person.

Primary and secondary research is conducted to gather the data from 50 respondents ,for this study and it is analyzed that the overall risk perception level of investors is moderate to high and there is no significant relationship between gender and investment choices. This implies that the sample does not prove that a particular gender has a higher or a lower degree of risk tolerance. It is also observed that experience in stock market has a higher capability also increases. The reason for overall moderate-risk perception among these 50 respondents could be the average level of financial awareness and knowledge about markets and finance because 60% of the respondents belong to the age group of 18-40 years and hence it can be said that they have comparatively more knowledge about finance and investment. Yet the knowledge about finance and financial market is not sufficient enough to increase their risk-taking.