INTRODUCTION

Investment is a price that an investor sacrifices today in order to gain future reward. In general,
an investor always tries to maximize the return and minimize the risk involved. There are many
factors that affect an investment decision such as the demographic, knowledge level, awareness,
experience etc. It is found that Demographic factors such as gender, income level, age,
education, family size have a significant impact on investment decision making process,
especially in Indian context.
Making an investment requires careful decision making as it relates to allocation of money in
different portfolios in order to maximize the return. The influence of risk perception on the
investment criteria of an investor has become a subject in the behavioral finance literature. The
risk perception of an investor is often found to influence the investment decision. The investment
decision means a decision where the investor makes up his or her mind as to where, when, how
and how much funds will be invested on various financial products and instruments available
with an objective of getting an income at a future date. The investment decisions could be
influenced by unavoidable psychological and emotional factors. Better understanding of these
factors will help the investors to take a suitable investment decision and also help them not to
repeat their mistakes in future in extracting the best financial investment avenues.
The concept ‘risk perception’ means the way in which investors view the risk of financial assets,
based on their concerns and experience. Risk perception is the belief, whether rational or
irrational, held by an individual, group, or society about the chance of occurrence of a risk or
about the extent, magnitude, and timing of its effects is a critical success factor that promotes
effective decision-making in risky situations.
Everyone today makes investments and investors today have so many options to choose from.
Hence, it becomes imperative to understand the investment process and decision making steps.
Each investor has an objective in mind before making any decision with regards to investing.
When these objectives are not clearly articulated investors land up with a decision which gives a
suboptimal return. It is always wise to set a clear objective in mind before making any decision
and accomplish the goal.
An investor may have a short term or a long term horizon; the short-term effectiveness examined
through the event analysis of the abnormal return for the recommended stock around the
financial announcement or due to market fluctuations whereas long-term investment horizon
examined through the investment value from a passive portfolio management strategy.

The different avenues of investment areas are as follows:

i. Low-risk avenues: savings accounts, bank fixed deposits, CPF, government securities and so
on.
ii. Moderate-risk avenues: mutual funds, unit trusts, ETF, life insurance, debentures, bonds.
iii. High-risk avenues: equity share market, commodity market, FOREX market.
iv. Traditional avenues: real estate (property), gold/silver.
v. Emerging avenues: virtual real estate, hedge funds/private equity investments, art and passion.
Investors choose an appropriate avenue depending on their specific need, risk preference and
expected returns.

The growing area of finance is known as behavioral finance which focuses on individual
attributes that shape the common investment practices. Study of risk perception and its impact on
investment behavior is one of the core investigation issues of behavioral finance research.
While talking about the risk factor in any investment, it is important to understand that the
decision making behavior of an individual is often affected by their attitude towards the risk. The
investors’ decision of investment is different as different levels of perception towards the risk.
Investors usually take risks according to their perception and understanding of the risk.
The present financial system offers so many investment avenues for the investors to choose
from. Some offer very attractive returns but come with a high risk and some come with low
returns and low risk. An investment can be called a perfect investment only if satisfies all criteria
and needs of an investor, which is often never the case. Therefore, the starting point of searching
of any perfect investment must look at through the investor needs. If all those needs are meets by
the investment, then that investment termed the perfect investment.
ABOUT EQUITY MARKET
First things first, it is important to begin with a good understanding of what is equity market in
the Indian context. Equity market, often called as stock market or share market, is a place
where shares of companies or entities are traded. The market allows sellers and buyers to deal
in equity or shares in the same platform.
In the global context, equities are traded either over the counter or at stock exchanges. There
are multiple buyers and sellers of the same equity/share. Hence, you stand a good chance to
strike a nice deal at the equity market. If you want to begin online equity trading in India, you
have to get a demat account. Open a demat account in simple steps.
HISTORY OF EQUITY MARKET
The first stock exchange in London was officially formed in 1773, a scant 19 years before the
New York Stock Exchange. Whereas the London Stock Exchange (LSE) was handcuffed by
the law restricting shares, the New York Stock Exchange has dealt in the trading of stocks, for
better or worse, since its inception. The NYSE wasn't the first stock exchange in the U.S.,
however, that honor goes to the Philadelphia Stock Exchange, but it quickly became the most
powerful. Formed by brokers under the spreading boughs of a buttonwood tree, the New York
Stock Exchange made its home on Wall Street. The exchange's location, more than anything
else, led to the dominance that the NYSE quickly attained. It was in the heart of all the business
and trade coming to and going from the United States, as well as the domestic base for most
banks and large corporations. By setting listing requirements and demanding fees, the New
York Stock Exchange became a very wealthy institution. 13 The NYSE faced very little serious
domestic competition for the next two centuries. Its international prestige rose in tandem with
the burgeoning American economy and it was soon the most important stock exchange in the
world. The NYSE had its share of ups and downs during the same period, too. Everything from
the Great Depression to the Wall Street bombing of 1920 left scars on the exchange - the 1920
bombing left 38 dead and also left literal scars on many of Wall Street's prominent buildings.
The less literal scars on the exchange came in the form of stricter listing and reporting
requirements. On the international scene, London emerged as the major exchange for Europe,
but many companies that were able to list internationally still listed in New York. Many other
countries including Germany, France, the Netherlands, Switzerland, South Africa, Hong Kong,
Japan, Australia and Canada developed their own stock exchanges, but these were largely seen
as proving grounds for domestic companies to inhabit until they were ready to make the leap to
the LSE and from there to the big leagues of the NYSE. Some of these international exchanges
are still seen as dangerous territory because of weak listing rules and less rigid government
regulation. Despite the existence of stock exchanges in Chicago, Los Angeles, Philadelphia and
other major centers, the NYSE was the most powerful stock exchange domestically and
internationally. In 1971, however, an upstart emerged to challenge the NYSE hegemony.
HISTORY OF INDIAN STOCK MARKET:
Indian stock market marks to be one of the oldest stock market in Asia. It dates back to the
close of 18th century when the East India Company used to transact loan securities. In the
1830s, trading on corporate stocks and shares in Bank and Cotton presses took place in
Bombay. Though the trading was broad but the brokers were hardly half dozen during 1840
and 1850. An informal group of 22 stockbrokers began trading under a banyan tree opposite the
Town Hall of Bombay from the mid-1850s, each investing a (then) princely amount of Rupee
1. This banyan tree still stands in the Horniman Circle Park, Mumbai. In 1860, the exchange
flourished with 60 brokers. In fact the 'Share Mania' in India began with the American Civil
War broke and the cotton supply from the US to Europe stopped. Further the brokers increased
to 250. The informal group of stockbrokers organized themselves as the The Native Share and
Stockbrokers Association which, in 1875, was formally organized as the Bombay Stock
Exchange (BSE). BSE was shifted to an old building near the Town Hall. In 1928, the plot of
land on which the BSE building now stands (at the intersection of Dalal Street, Bombay
Samachar Marg and Hammam Street in downtown Mumbai) was acquired, and a building was
constructed and occupied in 1930. Premchand Roychand was a leading stockbroker of that
time, and he assisted in setting out traditions, conventions, and procedures for the trading of
stocks 14 at Bombay Stock Exchange and they are still being followed. Several stock broking
firms in Mumbai were family run enterprises, and were named after the heads of the family.
The following is the list of some of the initial members of the exchange, and who are still
running their respective business: • D.S. Prabhudas & Company (now known as DSP, and a
joint venture partner with Merrill Lynch) • Jamnadas Morarjee (now known as JM) •
Champaklal Devidas (now called Cifco Finance) • Brijmohan Laxminarayan In 1956, the
Government of India recognized the Bombay Stock Exchange as the first stock exchange in the
country under the Securities Contracts (Regulation) Act. The most decisive period in the
history of the BSE took place after 1992. In the aftermath of a major scandal with market
manipulation involving a BSE member named Harshad Mehta, BSE responded to calls for
reform with intransigence. The foot-dragging by the BSE helped radicalise the position of the
government, which encouraged the creation of the National Stock Exchange (NSE), which
created an electronic marketplace. NSE started trading on 4 November 1994. Within less than a
year, NSE turnover exceeded the BSE. BSE rapidly automated, but it never caught up with
NSE spot market turnover. The second strategic failure at BSE came in the following two
years. NSE embarked on the launch of equity derivatives trading. BSE responded by political
effort, with a friendly SEBI chairman (D. R. Mehta) aimed at blocking equity derivatives
trading. The BSE and D. R. Mehta succeeded in delaying the onset of equity derivatives trading
by roughly five years. But this trading, and the accompanying shift of the spot market to rolling
settlement, did come along in 2000 and 2001 - helped by another major scandal at BSE
involving the then President Mr. Anand Rathi. NSE scored nearly 100% market share in the
runaway success of equity derivatives trading, thus consigning BSE into clearly second place.
Today, NSE has roughly 66% of equity spot turnover and roughly 100% of equity derivatives
turnover. Stock Exchange provides a trading platform, where buyers and sellers can meet to
transact in securities.
ADVANTAGE OF STOCK MARKET INVESTMENT
1. Chances of Exceedingly Good Returns in Short Time
Even in the past people have gained exceedingly good returns on their stock market
investments, and you always stand a good chance to earn huge profits when you decide
upon stock market investing. So, when you invest in stock market India, although you put
yourself at a lot of risks, you are also in a position to earn good returns in a very short
time.
2. Minority Ownership
Well, it does sound like an exaggeration, but when you put your money in a reputed
company’s stocks, you become a part-owner of the company, irrespective of however
smaller your share may be.  You can improve your standing in the market by sagaciously
putting your money in different companies. Moreover, you can exit whenever you want.
 3. Right to Vote
Minority ownership gives you the right to vote and voice your opinions at the corporate
level.
DIS ADVANTAGE OF STOCK MARKET INVESTMENT
1. Volatile Investments
Investment in BSE is subjected to many risks since the market is volatile. The shares of a
company go up and come down so many times in just a single day. These price
fluctuations are unpredictable most of the times and the investor sometimes have to face
severe loss due to such uncertainty.
2. Brokerage Commissions Kill Profit Margin
Every time an investor buys or sells his shares, he has to pay some amount as a brokerage
commission to the broker, which kills the profit margin.
3. Time Consuming
Investment in NSE is not as easy as investing in a lottery as you have to complete many
formalities in the process and hence is time consuming.
ABOUT COMPANY
Zebu was founded with a shared understanding of what the Indian trader
lacked to become profitable. We started off with the aim of filling the
technological and service gap that hindered traders’ and investors’ growth to
increased returns.

We constantly roll our products and services that serve every intricate need
of a demanding trader, including powerful trading platforms across devices,
a single margin for trading across asset classes, and an order generator for
research analysts and investment advisors.
What is 'Portfolio management’?
Portfolio management is the art and science of making decisions about investment mix
and policy, matching investments to objectives, asset allocation for individuals and institutions,
and balancing risk against performance. Portfolio management is all about determining strengths,
weaknesses, opportunities and threats in the choice of debt vs. equity, domestic vs. international,
growth vs. safety, and many other trade-offs encountered in the attempt to maximize return at a
given appetite for risk.

SCOPE OF THE STUDY

Risk perception and Portfolio management is a continuous process. It is dynamic activity. The
following are the basic operations of a risk perception and portfolio management:
1. Monitoring the performance of portfolio by incorporating the latest market conditions.
2. Identification of the investor’s objective, constraints and preferences.
3. Making an evaluation of portfolio income (comparison with target and achievements).
4. Making revision in the portfolio.
5. Implementation of strategies in tune with the investment objectives.

LITERATURE REVIEW
1. Panda Dr. B. N. & Panda Prof. J. K. 2013. An Analytical Study on Perception of Risk and
Return for Individual Investment. Journal of Business Management, Commerce & Research Vol-
I,No.-3,March-2013 (ISSN 2319-250X)
2. V. G. Murugan (2012), “Investors Attitude Towards Investment Option In Nellore Region,
International Journal Of Research In Commerce & Management, March 2012, Volume No. 3,
Issue No.3, ISSN.No.0976-2183
3. P. Neelakantan, SakthivelMurugan and Ramachandra Aryasri “Impact of Risk analysis in
selection of investment avenues-A study on Debt Market Investors” Southern Economist,
October 15, 2011, Vol. 50, pp. 27-30
4. Dr.M.Ramesh and N.Geetha, A Study on People„s Preferences in Investment Behaviour,
IJEMR –November 2011-Vol 1 Issue 6 -Online -ISSN 2249 –2585 -Print -ISSN 2249 –867297.
5. Lukasz Prorokowski - 2011 – “Trading strategies of individual investors in times of financial
crisis: An example from the Central European emerging stock market of Poland” - Qualitative
Research in Financial Markets Vol: 3 Issue: 1
6. GauravKabra , Prashant Kumar Mishra and Manoj Kumar Dash, Factors Influencing
Investment Decision of Generations in India: An Econometric Study‖ Asian journel of
management and research,2010,ISSN 2229 –3795, pp.308 –325
7. Cohen, J. B, Zinbarg, E .D, Investment Analysis and Portfolio Management, illinois: Irwin,
2012.
8. Gupta L.C., Rates of Returns on Equities: The Indian Experience, New Delhi: Oxford
University, 2012.
9. Ranganatham, M. and Madhumathi, R ., Investment Analysis and Portfolio Management, New
Delhi: Pearson Education, 2005.
10. Acharya, Debashis and Sidana, Gajendra., "Classifying Mutual Funds in India: Some Results
from Clustering", Indian Journal of Economics and Business, 6 (1), 2007, pp. 717961.
11. Adhikari, Umesh and Bhosale, Meenal., "Risk-Return Analysis of Mutual Fund Growth
Schemes", Indian Management, August 1994.
12. C. R. Kothari (2009) "Research Methodology: Methods & Techniques" (Second Revised
Edition), New Age International Publishers, New Delhi.
13. Mohan, Elangovan, Research Methodology in Commerce, 1st Edition, 2007, Deep & Deep,
New Delhi.
14. Panneerselvam R, Research Methodology, 6th Edition, 2008, PHI, New Delhi
15. Dr. Gupta. S.P statistical methods. NewDelhi, Sultan CHAND AND Co.Ltd.1989,25th
edition.
PritiMane [1] discussed the customer perception with regard to the mutual funds that the
schemes they preferred, the plans they are opting, the reasons behind such selections. This
research dealt with different investment options, which people prefer along with and apart from
mutual funds, like postal saving schemes, recurring deposits, bonds, and shares. Conclude that
mutual fund linked with share market and investors are not taking advice from authority advisor
to lead them for their investment in mutual fund so it creates the difficulty to select the mutual
fund plan favorable for them.

Awais et al. [2] explored that the factors which influence the decision-making process of
investors. According to their research, the decisions of the investors depend upon the degree of
the risk factors. Finally, they found that the increased level of knowledge about financial
information and the increased ability of analyzing that information, investor could improve the
capacity jump into risky investments for earning high returns by managing investment
efficiently.
Shukla [3] attempted this research paper, about investor’s preference towards investment
avenues and the study focused on the salaried person only. The author concluded that majority of
the respondents invested their money based on education background and they invested in
purchasing home and long-term investment. Respondents have the criteria of investment as
safety and low risk.
Amudhan et al. [4] analyzed the performance investment behaviour concerned with choices
about purchases of small amounts of securities, deposits, mutual fund, insurance, Chit Funds.
Researcher confirmed that there looks to a positive degree of correlation between the factors that
behavioral finance theory and previous empirical evidence identified the average investor. The
result described investment offer to a person’s money to gain future income in the form of
interest, dividends, rent, premium, pension profit or approval of the value of their standard
capital.
Vaidehi et al. [5] argued that because of different investment strategies as motives and styles by
different needs. It studies the need for better accepting of behavioral pattern the paper investors,
the behaviour pattern would aid the investment advisors to envision how the investors respond to
market schedule, and would allow them to developed suitable allotment approaches for their
customers. Among the selected factors the investment motives, attained the long-term gain,
which established to an essential factor chased by dividend and growth prospects and balancing
of short-term and long-term gain. Educational qualification, occupation, age, income and amount
of equity investments choose the investing styles of the investors notably.
Mishra [6] explained that this study aimed to investigate perception of investor towards mutual
funds with travel the important aspects of mutual funds affecting perception of investors and it
examined difference of perception of large and small investors based on explored factors.
Difference of view about mutual fund analyzed with the help of ‘t’ test. Small investors focused
on tax returns and savings but large investors expect future return. Thus mutual fund companies
must give due significance to these size for their survival and growth in Indian context.
Rastogi [7] analyzed behavioral feature in the investment choice making method.
Behavioral finance provides solution to many problems until now not answered suitably by the
usual finance theory. The study concluded that behavioral biases not affected by the combined
categories of gender and occupation.
kumar [8] carried out a research to find what plays a vital role in the minds of the investors
before decided on investment. The nine factors namely security, risk tolerance, lucrative return,
investment duration, periodic return, share preference, longterm investment, futuristic return and
investment dynamics influenced the investor’s perception the author conclude that investors
compared their returns and calculate the inverse proportionality between time and the return.
Among these factors, the futuristic goals of equity investors are very considered as a factor
important for estimating their level of satisfaction.
Orerler and Taşpınar (2006) stated that in general there is lower risk tolerance for the unknown
since the impacts are new, unobservable or delayed. Higher risk tolerance emerges when people
feel more in control. Risk tolerance canbe determined through consultation with affected parties
or by assessing investors’ response or reaction to varyinglevels of risk exposure. Risk tolerance
may change over time as new information and outcomes become available oras societal
expectations evolve (Evans, 2004). Investors should explore the connections, or lack thereof,
betweentheir risk tolerance profiles and their expectations of investment returns. Finally, those
attributes should be madeexplicit and used as key inputs in structuring their portfolios.
OBJECTIVES
 How the investor manage their investment
 To Analyze about the investment pattern
 To study on risk perception of equity investors
 To understand investors portfolio management to reduce risk

RESEARCH METODOLOGY
Research methodology is the path through which researchers need to conduct their research. It
shows the path through which these researchers formulate their problem and objective and
present their result from the data obtained during the study period. This research design and
methodology chapter also shows how the research outcome at the end will be obtained in line
with meeting the objective of the study. This chapter hence discusses the research methods that
were used during the research process.
It includes the research methodology of the study from the research strategy to the
result dissemination. For emphasis, in this chapter, the author outlines the research strategy,
research design, research methodology, the study area, data sources such as primary data sources
and secondary data, population consideration and sample size determination such as
questionnaires sample size determination and workplace site exposure measurement sample
determination, data collection methods like primary data collection methods including workplace
site observation data collection and data collection through desk review, data collection through
questionnaires, data obtained from experts opinion, workplace site exposure measurement, data
collection tools pretest, secondary data collection methods, methods of data analysis used such as
quantitative data analysis and qualitative data analysis, data analysis software, the reliability and
validity analysis of the quantitative data, reliability of data, reliability analysis, validity, data
quality management, inclusion criteria, ethical consideration and dissemination of result and its
utilization approaches. In order to satisfy the objectives of the study, a qualitative and
quantitative research method is apprehended in general. The study used these mixed strategies
because the data were obtained from all aspects of the data source during the study time.
Therefore, the purpose of this methodology is to satisfy the research plan and target devised by
the researcher.

 Research Design: Descriptive Research

 Data source: Primary and Secondary Data
 Research Approach: Survey Method
 Research Instrument: Questionnaire
 Contact Method: Direct-Personal
 Sampling Technique:
 Non Probability sampling
 Snowball Sampling
 Sample size: ***