Investment Behavior and Patterns of Women: A Comprehensive Review

of Empirical Studies
*Dr. Sanjeet Kumar **Prashant Kumar
* Assistant Professor, Dept. of Business Administration, Chaudhary Devi LaL University,
Sirsa, 125055 Haryana
** Research Scholar, Dept. of Business Administration, Chaudhary Devi LaL University,
Sirsa, 125055 Haryana. Email: kumar.prashant2021@gmail.com

ABSTRACT

Investing money is powerful tool for economic development of a nation. It is beneficial

for both investor and economy as investing small amount can generate considerable
return over a period which will eradicate the poverty and increase the growth of
economy. Due to globalization and advancement in technology the importance of
investment has increased more. Indian economy is in developing stage and much
influenced by the dealings of stock market. The common people usually avoid their
money to invest in stock market due to high volatility in the financial market, lack of
adequate knowledge, improper guidance and many other factors. The common man is
still not familiar with the benefits of investment in stock market. The selection of
investment is a difficult task which requires considerable skills and knowledge for
analysis of available options. Moreover, a sound investment decision in stock market may
lead to the higher return and maximum satisfaction. But it seems difficult for people to
analyze the various options to find out suitable investment avenues because of lack of
awareness whereas people don’t know even where to invest and how much to invest.
Therefore, analysis of behavior of investors is essential to find out various positive and
negative aspects of investment in stock market. In the wake of globalization, Women in
India are now actively participating in all fields such as education, business, politics,
technology and media. The participation of women in the investment decision is
important for increasing the economic potential of a country. The present study intends to
provide a comprehensive review of previous studies on the investment behavior and
patterns of women investors.

Key Words: Investment behavior, stock market, women, review

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1.Introduction
The economic development of a nation depends on the stability of its financial system.
The financial market of a country channelizes funds from saver to borrower and it is a
place where the buying and selling of securities takes place. The financial market
comprises two markets: capital market and money market. The stock market commonly
known as capital market is the component of financial market and contributes in the
development of economy. The capital market or share market is regulated by SEBI
(Securities Exchange Board of India). The Indian stock market is the oldest stock market
in Asia. The investment and savings are the two important elements and investment
decision is very crucial for common people and other investors. The people usually invest
their savings where they can get maximum returns and safety of their money. Investment
activity is essential for the growth and development of a nation. The individual investor
plays an important role in the stock market because of the big share of their savings are
invested in the country. The decision of making investment is always based on the
relationship between risk and return. The term investment means employment of funds in
any assets and securities with the aim of earning return or capital appreciation.
Investment is the allocation of funds to the profit generating asset in future. Investment is
an economic activity which generates capital needed for various sectors of economy.
If a person earns income, he spends it for satisfying his needs. There is found direct
relationship between the income of a person and spending. The spending of a person
depends upon the financial positions. When a person earns income more than he need for
current consumption, he would choose to invest the remaining funds in a profitable
investment avenue. Investment is important for the wellbeing of individuals and for the
economic development of a nation. The nature of financial market has changed
drastically due to continuous advancement in environment. Investing money is a very
complex task because of number of investment companies and products offered by them,
terms and conditions of investment and complex rules and regulations. As the
investments in some avenues are subject to high risk, the investors have to analyze the
various alternative investments in terms of risk and returns associated with them.
There are number of investment options are available. There are various investment
avenues such as Savings account, fixed deposits, Government Securities, Corporate

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Bonds, Insurance policies, Real estates, Commodities, Shares and Mutual funds, Chit
Funds and Gold and Silver. The investors invest their savings in the above mentioned
avenues depending on their risk taking attitude. It is well said that high risks means high
profits. Investors cannot ignore the level of risks but they can minimize the risk level by
choosing a sound decision means combination of investment where risk is minimized and
return is maximized so that investors can get reasonable amount of profit.
While taking investment decision, the behavioral aspects, awareness level of investors,
risk attitude, investment habits, common understanding of market play an important role
in making a sound investment decision. The behavioral finance describes how emotions
and cognitive errors affect the individual investors’ behavior. Most of the investors,
specifically women investors are found unaware about the variety of investment avenues
and process of investment and its rules and regulations.
Women are financially independent nowadays. Women are actively participating in
investing their savings by analyzing the various factors such as degree of risk associated
with investment, influence of family members and friends and the capability of investing
in modern and innovative investment avenues. The direct involvement of women can be
seen in the areas of business and finance. Today’s women are having high profile jobs
and getting handsome salaries. As women have taken interest in the investment of their
funds, it may not be possible that women investors face various challenges and problems
and due to their limited knowledge the investment decision can be influenced. Most of
the studies showed that women investors do not make investment in stock market due to
lack of awareness and common understanding about the investment options.
2. Objectives of the study
The main objective of this study is to provide a comprehensive review of previous studies
on the investment behavior and patterns of women.
3. Sources and methods
The study analyzed the previous researches undertaken by researchers on investment
behavior of women. The secondary sources including online publications in Emerald,
JSTOR, Google scholar, Social Science Research Network (SSRN) and other online
database were used. Other secondary sources including books, magazines, newspapers,

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working and discussion papers and government websites were also used. This is a
theoretical research based on previous research.
4. Analytical review & findings
The study is an overall attempt to analyze the previous empirical studies on investment
behavior of women including various aspects such as the reaction, reasons behind choice
of the investment, the type of investment, purpose of investment, sources of information
regarding investment. The investment behavior of women will reflect the various aspects
such as the investment goal, basis of investment, use of funds, frequency of investment,
duration of investment, reactions of women due to increase or decrease in portfolio value.

4.1 Appraisal of previous studies

4.1.1Respondents
The reviewed studies use the primary data that have been taken place through surveys,
interview, mail and standardized questions. The respondents were the working women in
public and private sector belonged to urban and rural areas.

4.1.2 Variables
The variables taken for the behavior which reflects what actually women thinks while
taking investing decision and what are the various avenues selected by women, their
investment patterns, awareness level, perception and attitude towards risk level and the
factors which influence the decision of women while investing in stock market.
4.1.3 Research Methodology
In the reviewed studies, the analysis of investment behavior and pattern of women has
been depicted using the simple percentage analysis and descriptive statistics whereas
most of the authors used ANOVA for evaluating the differences in behavior of women.
Moreover, regression analysis was used to check the impact of one factor on another.
Some other common techniques such as t- test, F-test, factor analysis and weighted
average score were applied to draw the conclusion.
4.1.4 Empirical studies on Investment behavior of women
The women are the almost half of total population and women are independent, educated
and getting handsome amount of salary. Nowadays, women not only take the home
oriented decision but also take financial decision independently. Due to higher
qualification women own, they are enjoying higher post whether it is in corporate or

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other services. Today’s women are financially independent and ready to pool their
savings in a profitable avenue to maximize their wealth. It is desirable to analyze the
investment behavior of women to check their risk bearing capacity and factors that affects
their behavior because investment behavior of women is concerned issue across the world
such as the activities and performance of women investors in Japan. Women investors are
participating frequent in investing activity and do not make sound investment decisions.
The study concluded that sound investment decision depends on the adequate knowledge
and proper guidance about investment avenues and stock market (Kim and Nofsinger
2007). The awareness level of women investors for various investment instruments of
stock market is necessary. The study examined the preference level of investors and risk
level for various investment avenues. The author (Ravichandran 2008) conducted a
survey on 100 investors of Chennai. The study found out that there is significant
relationship between the level of investment preference and risk level. Lusardi et.al
(2009) explored the reasons for not investing in the stock market. The study was
conducted on 7,138 respondents in US. The findings depicted that ignorance of investors
towards the various factors was the basic reason of poor investment decision. There are
various reasons such as lack of awareness, lack of participation and poor borrowing
behave of the investors. Kathirvel and Mekala (2010) made an attempt to examine the
investment behavior of investors. The study was carried out on 150 women respondents
of Coimbatore district in Tamilnadu. The results found that lack of knowledge about the
stock market and different investment options prevents women for investing in share
market. The authors concluded that insecurity and high volatility in stock market are the
concerned issues for women investors. Varadharajan and Vikkraman (2011) examined
the perception of investors for investment in equity market. The 50 investors was
approached from Coimbatore to study their attitude for choosing the stock, types of
company, risk level and expected return. The study explained the importance of
investment in stock market by analyzing various factors that affects the decision making
about the participation in stock market. The results presented that investment decision
should not be taken on the basis of other’s opinion because it may result into negative
returns.

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Brahmabhatt et.al (2012) examined the investment behavior and preferences of
investors. The results depicted that awareness level of investors is high showing the
proper knowledge about the working of stock market. The information sources such as
news channel, newspapers, financial portals, magazines helped the investors for making a
rational decision regarding investment in stock market. The authors concluded that
investors had sound knowledge, enough money and resources for investment in stock
market but economic conditions are not predictable.
Bhatt (2013) described that stock market channelize the savings to corporates for the
development of economy. The investment decision for a specific share depends on its
price as investor generally sells the share if prices are high. The investment in shares
generates higher returns as compared to other investment avenues. The investment in
stock market depends on the adequate knowledge and education about the stock market.
The study concluded that if the investors have proper information from a reliable source,
they can take sound and rational decision of investment in share market which leads to
the success in share trading. The respective companies should start training programs
about the basics of stock market to make the general public aware. Purohit (2013)
measure the awareness level of investors about various investment options available in
financial market. The investors give ranks to different avenues according to their choice
and priority and consider various factors before investing in the stock market. According
to the investors, the most preferred option for investment is provident fund due to higher
safety. The results suggested that share market brokers, merchants and promoters should
provide better opportunity, required consultations and safe platform to investors.
Vasagadekar (2014) attempted to examine the risk tolerance level of women investors
and their preference in stock market. The results indicated that women were less aware
about the stock market investments and they were unable to manage their portfolios. The
risk bearing capacity of women was found low with low educational level about the stock
market. The author concluded that low financial literacy and low risk bearing capacity
was due to lack of adequate financial knowledge. Jain (2014) analyzed the pattern of
income and investment of the working women from Ahmedabad. The questionnaire was
filled by 250 women respondents. The study aimed to examine the relationship between
investment and income. The findings conclude that most of the women chose to invest in

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fixed deposits in banks for the safety purpose and another priority of women is to invest
in gold. There was significant relationship between the factors affecting the awareness
level and factors influence the benefits of investment. The women described the safety of
funds as their first priority for selecting investment. Ramanathan and
Meenakshisundaram (2015) analyzed the importance of demographic variables like age,
gender, education, occupation and income of respondents. The preference of investors
and the period of investment were examined. The results presented that investment in
gold and banks are the most preferred avenues for women. The study showed the positive
correlation between income level of women and investment and women were aware
about the choice of investment. They invest where they get maximum returns generally
resulting into the asset creation for their safe future. The authors concluded that
awareness programs are still needful for educating the women investors for stock market
to make the investment climate attractive.
Reddy and Narayanan (2015) studied the pattern of women investors and the awareness
level of women for various avenues. Most of the women investors found investment in
stock market is very fascinating process due to their direct participation where as some of
the investors opined that all investments are not profitable sometimes due to the wrong
investment pattern over the periods. The investment is the concerned issue for middle
class people because their small amount of saving of today will be used in future to meet
the expenses. The authors concluded that success of investment depends on the high
return from diversified portfolios. Singh and Yadav (2016) made an attempt to study the
factors that influence the decision of making investment in share market. The study was
carried out on 100 investors consist 60 male and 40 female of Moradabad in Uttar
Pradesh. The findings suggested that special consideration is required while investing in
stock market. The financial and technical analysis is required along with the fundamental
analysis. The results showed that investors should search all avenues while making their
funds invested in profitable assets. Midhula and Hemalatha (2016) made an attempt to
find the effects of age, experience, qualification on the income of investors which directly
influence the decision of investment. The study analyzed the various avenues selected by
women investors and their impact on investment. The findings reflected that there were

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seen significant differences in perception of women investors and the demographic
variables like age, education, income, occupation and marital status.
Manikandan (2017) highlighted the preferred investment avenues of women investors
and the reasons of doing investment in stock market. The author presented that women
invest in stock market because of high return, high liquidity, income stability and variety
of benefits associated with stock market. Most of the women preferred investment in
banks because the reason may be buying a home and long term security. The women
were not more aware about investment in mutual funds, shares and other financial
instruments. Rakesh and Nalina (2017) investigated the factors affecting the perception
of investors. The factors such as risk perception, investment pattern and portfolio
constructions were important while making decision of investment in the stock market.
The demographic analysis of respondents has also been done which played important role
in stock market investment. The author made vast review on the investor behavior for
investment in stock market. The study concluded that decision of investment in stock
market depends on the various factors.
Sathiyavani (2017) analyzed the perception of investors towards stock market and
identified the factors contributing in the awareness level of investors for stock market
investment. The study was carried out on 120 investors. The findings revealed that
investors are differs in terms of their awareness level, risk perception and attitude. The
author suggested that investors are the important component of stock market, without
investors market cannot exist and without market a company is unable to raise funds. The
stock market provides different investment choices for investors to maximize their wealth
and attained higher return. Malathy and Saranya (2017) explored the factors which
directly influence the perception of investors for investment in stock market. The study
found various factors such as return and risk level, profitability, share price, market
demand, dividend policy, company image and financial performance. These factors
highly affect the decision of investment and some of the factors were ranked highly such
as return on investment, company image, dividend policy and financial performance.
Assefa and Rao (2018) examined the investment preferences for various investment
avenues. The data were collected from working employees in Wolaita Sodo, Ethiopia.
The findings showed that the overall level of awareness of investors in Ethiopia is low,

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and most of the respondents were not aware about financial concepts related to stocks,
bonds, mutual funds, and the compound interest. The respondents had the similar orders
of preference for all investment avenues.
Conclusion
The present research will assist not only the women investors but also the different
financial institutions, investment consultants, stock broking houses and other participants
of stock market in studying the factors that stimulate the investors to invest in different
avenues and how to make the general people aware about the stock market. The expected
findings of the study will help the financial advisors and planners in formulating suitable
investment strategies for the investors because a thoughtful decision for investment in
stock market is desirable for economic development. The analysis of perception of
investors will help in accurately measuring how the investors think about the investment
options offered by the companies and the results of the study will assist the financial
sector in formulating better financial instrument to accommodate the need of the
investors.
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