The investment pattern in the country suggests that investment flow have been highest in the traditional modes of investments such as in real estate market followed by gold and silver. Amid the uncertain financial environment, the financial markets across the globe have been sluggish for a sustained period now. Hence, at this juncture, investors were keener towards safe and less risky investments as compared with highly volatile investment avenues such as stock market and preferred for a traditional mode of investment like real estate and gold & silver.
With the backdrop of a volatile and uncertain investment environment, PHD Research Bureau of PHD Chamber of Commerce and Industry has recently undertaken a ‘Retail Investor’s Survey: A survey of Rural, Urban & Metropolitan Segments, October 2012’ to understand the investment dynamics of the economy across various segments of population, reflecting diverse origin and occupational demography.
On all India level, people across diverse segments have expressed interest in physical assets, which have overshot their inclination towards the financial counterparts. It is evident from the fact that 30% investments were in real estates, 25% in gold & silver, 21% in fixed deposits, 7.33% in equity linked insurance schemes, 6% in mutual funds 5% in others investment tools and 5% in stock market.
The occupation wise investment pattern across rural, urban and metropolitan India suggests that the investment preferences are inclined towards safer options
like Fixed Deposits amongst salaried people and Real Estate especially among the professionals and business people. Although the business class has been found to be more risk-taking with stronger preferences towards market determined options like stocks, the agriculturists have shown very strong preferences towards Gold & Silver. While a large share majority of investments (26%) among business class has gone to gold & silver, around 37% of investments amongst the professionals have gone in Real estate. Fixed Deposits have been the most preferred option among the salaried class whereas a large chunk (29%) of the investments amongst Agriculturalist were in Gold & Silver.
The trend has shown that Indians have a higher propensity to save in terms of physical assets due to the more attractive returns, compared to the financial modes, comprising 56% and 44% respectively. However, increased financial savings can act as a major driver of growth, as it is the financial investments which can help the funding of infrastructure development.
Hence, to deepen the penetration levels of financial investment opportunities among households, we believe these is a need to create a conducive environment
that will act as a catalyst and facilitate in mobilizing households’ savings into market linked financial products – stock market, equity linked insurance, and mutual funds etc.