INTRODUCTION
There is need to improve productivity and this calls for application of 
modern technology. Modern technology in turn calls for heavy dose 
of capital investment in these areas. But the capital formation is a 
difficult task and depends upon the people's willingness and their 
capacity to save. Thus prosperity of the economy is closely linked 
with the ability of the public to save and invest in productive assets 
for an uninterrupted supply of capital. Dearth of capital is not felt if 
the much needed capital is available within. To survive and develop 
in this competitive business world, capital must be made available 
at a reasonable rate without conditions attached to it. Investment 
climate must attract the people to save from their income at times 
even by foregoing the enjoyment of comforts and luxuries. If 
enough savings are accumulated, the next important thing is to 
invest them in constructive assets so as to generate further value. 
Actually, �nancial intermediaries undertake the work of 
channelizing the savings of public into productive assets. Banks, 
non-banking �nancial institutions, post-offices, share markets and 
governments are some of the important �nancial intermediaries. 
Despite the effort of all these intermediaries, current savings is not 
up to the regular level. Further, the entire savings are not at fully 
diverted into industry for productive purposes. In the wake of 
paucity of funds, the process of industrial development has not 
been activated. Mainly due to the �nancial crunch, industrial sector, 
has stagnated its activities. Supply of fund would normalize the 
process and the supply mainly depends upon individual investors. 
In recent times, the contribution of individuals alone have 
contributed to about two-third of total capital. Personal savings or 
savings of individuals are called household sector's savings. If 
properly guided and motivated, an active and vibrant participation 
of individuals will lend �nancial support internally to the industrial 
enterprises. In any country, the investment climate should not 
encourage public to hoard cash and postpone investments. On the 
other hand, government and other institutions must evolve new 
systems to induce more and more public savings. The present study 
aimed to know the attitude of investors on various investment 
avenues in Erode district.

MATERIALS AND METHODS
Brahmabhatta et.al. (2018) in their article entitled “A study of 
investor behavior on investment avenues in Mumbai Fenil” stated 
that investor's perception will provide a way to accurately measure 
how the investors think about the products and services provided 
by the company. The main objective of the study is to �nd out the 
need of the current and future investors and to study on investor 
behavior. 100 investors were taken for the study. Most are making 
conservative decisions that re�ect a survival mode in the business 
operation. During these difficult times, understanding what 
investors on an ongoing basis is critical for survival. Therefore, the 
study is identi�ed that people like to invest in stock market as 
compared to any other markets, even if they face huge losses. Sanjay 
Kanti Das (2018) in his article entitled “Middle Class Household's 

Investment Behaviour: An Empirical Analysis” the study reveals to 
know whether there has been any increase in their savings and if so, 
the reasons for the same. The present study is based on primary 
sources of data which are collected by distribution of a close ended 
questionnaire to 180 respondents out of which 150 respondents 
have replied and the data has been analyzed using simple statistical 
tools and to access the signi�cance/ association between 
dependent variables. It is also observed that most of the 
respondents show their keen interest towards the insurance 
products so as to get tax bene�ts, life protection and average 
pro�table investment avenues. Further, it is observed that the level 
of income also in�uences the investment decisions. Higher income 
group shows relatively high preference towards investment in share 
market conversely lower and average income group shows keen 
preference towards insurance and banks as the most preferred 
investment avenues.

This study has used both primary data and secondary data. For 
collecting primary data �eld survey technique was undertaken in 
the study. The researcher has collected 1000 samples from Erode 
district by means of questionnaire. The research design adopted for 
this study is descriptive research. Descriptive method was adopted 
because it deals with description of the state of affairs as it exists at 
present.  If the population from which a sample is to be drawn does 
not constitute a homogenous group, then strati�ed sampling 
technique is applied so as to obtain a representative sample. Factor 
analysis was used for further analysis.

RESULTS AND DISCUSSIONS
For the purpose of present research work, 21 self-explanatory 
attitudinal statements comprising the areas such as importance of 
saving, habit of saving, principles of saving, investment decisions 
etc. are identi�ed. The statements are framed and arranged in such a 
way that one statement has no relevance or resemblance to other. 
The inferences from the attitude statements are made by applying 
the factor analysis test. The selected variables are

1. Con�dent of my ability 
2. I take full responsibility for the result 
3. I am convinced to manage my investment
4. I know all the features of avenues
5. Betterment of services is much essential
6. Family play a vital role in making investment
7. I usually invest in companies which I know and trust. 
8. I use past price movement to predict future price. 
9. I make investment decision on the basis of company's dividend 

ratio. 
10. I make investment decision based on my experience 
11. I prefer to invest in pro�table investment avenues 
12. I am getting more returns because I have taken right 

investment decision
13. My investment decision has changed over period of time

ATTITUDE OF INVESTORS ON MAKING INVESTMENT IN VARIOUS AVENUES

Original Research Paper

K.Krishnamoorthi Research Scholar in Commerce, Chikkaiah Naicker College, Erode

Commerce

The practice of savings and investment differs from person to person and place to place as the savers have varying 
objectives embracing safety, pro�tability and liquidity. Similarly, the motive behind such practice equally varies due 

to the in�uence of internal and external factors of savers. As such, there is no single motivating factor applicable to all investors on all 
occasions. In the Indian context, savings from all quarters are the need of the hour. Though 70 percent of our population lives in villages and 
mainly depend on agriculture, the savings from agricultural sector is not enough due to uneconomic operations of the farms and same is the 
situation of public undertakings. Further, the savings of businessmen and self-employed are not stable and not assured because it is subject 
to the conditions of business. The present study aimed to know the attitude of investors on various investment avenues in Erode district. 

ABSTRACT

KEYWORDS : Savings, Investment, Pro�tability, Liquidity, Uneconomic.

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14. Once I decide about my investment option I will choose that 
option again and again

15. When I invest is based on the market position
16. Irrespective of  in�ation I will put money in �xed income 

securities
17. I will invest for tax exemption
18. I receives good quality advice from distributors/broker.
19. Attending investor educational programme is bene�cial for my 

investment.
20. Household investment will help me in betterment.
21. I desire to reserve for unforeseen contingencies   Factor analysis 

tries to summarise the information contained in a number of 
original variables into a smaller set of new composite 
dimensions. Hence, correlation matrix for the variables (21 
statements) is calculated in order to establish the relationship 
between them. Generally, a correlation value of 0.3 (absolute 
value) is taken as sufficient to explain the relationship between 
variables. Correlation matrix value has been given in table the 
following table. Further, two tests are applied to the resultant 
correlation matrix to test whether the relationship among the 
variables is signi�cant or not. Firstly, Bartlett's test of sphericity 
is used to test whether the correlation matrix is an identity 
matrix i.e. all the diagonal terms in the matrix were 1 and the off-
diagonal terms in the matrix are 0. The calculated test value is 
786.684. it shows that the correlation matrix is not an identity 
matrix i.e., correlation exists between the variables. 

Another test of Kaiser-Meyer-Olkin (KMO) measure is used to test 
the sampling adequacy. The test is based on the correlation and 
partial correlation of the variables. If KMO measure is closer to 1, it is 
good to use factor analysis and if KMO is closer to 0, then the factor 
analysis is not a good idea for variables and the data. The value of 
test statistics is 0.69083 which means the factor analysis for the 
selected variables is good.

Next, PCA used to extract factors from the statements. The PCA 
extracted 6 factors and these are all co-efficients used to express a 
standardized variable in terms of the factors. These co-efficients are 
called factor loading since they indicate how much weight is 
assigned to each factor. Thus, factors with large co-efficients (in 
absolute value) for a variable are closely related to that variable. The 
following table shows the factor loading to each variable. 21 
attitude statements are denoted as variables and the statements 
could be seen from questionnaire in annexure part.   

It could be seen from the following table that factor 1 is with largest 
loading (0.61684) for x1 variable and factor 2 for variable x17 
(0.70915). Factor 3 is highly loaded for variable x5 (0.61140) and 
factor 4 for variable x11 (0.40065). Factor 5 has largest loading for 
variable x20 (0.64507) and factor 6 is largely loaded for variable x13 
(0.50622).

TABLE 1 PRINCIPAL COMPONENT EXTRACTED FACTOR MATRIX 
FOR SIX FACTORS

Then communalities for each variable are calculated from the factor 
matrix. The proportion of variance explained by the common factors 
is called commonality of the variable. Eigen values are also 
calculated which give the proportion of total variance explained by 
all the factors. The calculated value of “percentage of variance” 
explains how much variance is attributed to each factor. Cumulative 
percentage is calculated to explain the total variance in the selected 
variables. The following table presents to disclose the communality 
of each variable, Eigen value, percentage of variances and 
cumulative percentages of each factor.

TABLE 2 COMMUNALITIES OF VARIABLES AND EIGEN VALUES, 
PRCENTAGE OF VARIANCES, CUMULATIVE PERCENTAGES OF 
EACH FACTOR

It could be seen from the table that factor 1 has the maximum Eigen 
value of 2.17190. All the factors are arranged in order of importance, 
cumulative percentages of 6 factor model explains that there are 
only 44 percent of variance in the selected variables.

Although the factor matrix obtained in the extraction phase 
indicates the relationship between the factors and the individual 
variables, to enhance the interpretability of the factors' rotation is 
done. The most common method of varimax rotation is used and 
the rotated factor matrix values are given in table No.3.

TABLE 3 ROTATED FACTOR MATRIX FOR SIX FACTORS

Sl. No & 
variables

Factor 
1

Factor 
2

Factor 
3

Factor 
4

Factor 
5

Factor 
6

1 X1 .61684 .05210 -.16855 -.13668 -.23376 -.07847
2 X9 .59204 -.19106 .19594 .15146 .01214 .25458
3 X7 -.55008 .20685 .46800 -.13161 .05645 .25478
4 X10 .49869 -.13028 -.17268 .38800 .18123 .36542
5 X2 .49655 .06302 -.30625 -.25531 .29335 .02546
6 X8 -.38379 .21892 -.08252 .34063 .09356 -.25464
7 X17 .13272 .70915 .04370 -.08244 .07242 -.25478
8 X15 .29138 .55696 -.4282 .05877 .22215 .23458
9 X18 -.05645 .42508 .23836 -.17441 -.19687 .05648

10 X16 .03879 .33658 -.24846 .33544 .11564 .03256
11 X12 .02210 .22421 -.7382 .11955 -.05462 .32145
12 X5 .32843 -.01380 0.6114 .17255 -.15465 .02546
13 X4 .14852 .07005 .60783 .42889 -.25465 -.10335
14 X6 .24357 .09235 .46555 -.31982 .14758 .09545
15 X11 -.15298 .04520 -.30643 .40065 .06541 -.02145

16 X20 .18470 -.13934 .33069 -.20041 .64507 .02458
17 X21 .15559 -.11207 -.00474 -.36312 .14447 .02548
18 X19 -.01324 -.06458 -.06161 .37746 .23548 .25489
19 X13 .11777 .35504 -.05316 .10821 .12548 .50622
20 X14 .29664 .32640 -.20153 .04565 .15487 .25648
21 X3 .21296 .17021 .025481 .025451 .05878 .12421

Variable Communality Factor Eigen 
value

Percentage 
of variance

Cumulative 
percentage

X1
X2
X8
X9

X14
X15
X16
X17

X3
X7

X10
X18
X19

X4
X5
X6

X20
X21

X11
X12
X13

.49116

.52238

.36721

.51280

.43982

.43774

.31408

.54521

.19075

.38007

.48545

.30192

.44599

.60456

.60380

.38075

.63435

.62562

.32627

.08262

.56333

1

2

3

4

5

6

2.17190

1.62159

1.51260

1.36664

1.36518

1.22216

10.3

7.7

7.2

6.5

6.5

5.8

10.3

18.1

25.3

31.8

38.3

44.1

Variable Factor 1 Factor 2 Factor 3 Factor 4 Factor 5 Factor 6
X2
X1
X9
X8

X17
X15
X14
X16

.68873

.60454

.52173

.50906

.00121

.07354

.06928

.08794

.12159

.20091

.09066

.13179

.72176

.59215

.51481

.40784

.03360

.22888

.38395

.04377

.13716

.05148

.38392

.06535

.11854

.12451

.23564

.21456

.24574

.02145

.00548

.04578

.11545

.10655

.25461

.24579

.32456

.01245

.02457

.12699

.01245

.12345

.14547

.36564

.12455

.26452

.10676

.12456

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Although the factor matrix obtained in the extraction phase 
indicates the relationship between the factors and the individual 
variables, it is usually difficult to identify meaningful factors based 
on the matrix. Often variables and factors do not appear correlated 
in any interpretable pattern. Most factors are correlated with many 
variables. Thus to summarise the sets of closely related variables, the 
rotation is done. From the above table, it could be seen that each 
factors identi�es itself with a few sets of variables closely connected 
to it. In each factor, most preferred variables are placed �rst and the 
remaining in the order of ranks secured by them.

From the analysis, it is inferred that the investors give more 
importance to the factor one which implies a positive and stubborn 
attitude towards savings. Factor two stands to disclose the 
importance of investment practices and returns. Factor three is to 
reveal the attitude of the investors towards the present investment 
climate. Factor four stresses the importance saving. Role of 
government in regulating the investment climate in the country is 
disclosed the factor �ve. Factor six contains statements of overall 
concern of investors.

RECOMMENDATIONS AND CONCLUSION
Many private sector �nance companies failed to meet their 
repayment schedule and hence dispute arose between the 
investors and institutions. Government’s belated intervention in the 
past resulted in the loss of crores of rupees of investors. They also 
expect that the Government must misery will �nd a solution. The 
long pending court proceedings ultimately increase their burden. 
Almost all the investors feel that the rate of interest on Government 
securities is very less when compared to the return available 
outside. For such higher return, investors are tempted to invest with 
private parties. Investors expect the Government to enhance the 
rate of interest slightly higher than the present. This will ensure 
satis�ed return to them and safety of capital. Some investors 
reported that they had subscribed retirement bene�t plans and 
private sector Mutual Fund Organisation. They expect some 
additional tax concession from the Government. Since, these 
schemes are mostly subscribed by private sector employees, the tax 
concession will be a boost for their saving habit. The Central and 
State Government should spread saving and investment habit by 
making foolproof safety mechanism. Only with prevalence of a 
healthy atmosphere, individual investors will be inclined to deploy 
their funds on a continuous basis in various types of on a continuous 
basis in various types of �nancial instruments of government. 
Investor education is the need of the hour. Though number of 
institutions part with investor education, they are not sufficient. A 
mass and continuous awareness programme shall be conducted. 
Before investing, one has to equip himself with relevant 
information, which will have a long run impact on his investment 
practices. But in practice, investors with little time to discuss 
investment matters are not serious in the matter. Owing to the 
availability of little relevant information, general talks and rumors 
induce the investors to choose the investment instrument though it 
does not suit his interest. Hence, a systematic and long run investors’ 
awareness programme would be a boon to the investing 
community.

REFERENCES
1. Shamira Malekar , Brahmabhatta and P.S.Raghu Kumari, “A Study of Investor Behavior 

on Investment Avenues in Mumbai Fenil” TRANS Asian Journal of Marketing and 
Management Research, Vol.1 Issue 1, September 2018,pp. 49 – 66.

2. Agrawal, G. D., “Mutual Funds and Investors’ Interest” The Journal for Corporate 
Professionals, Vol. 22 (1), 1992, pp. 23-24. 

3. Sanjay Kanti Das, “Middle Class Household’s Investment Behaviour: An    Empirical 
Analysis”, A Journal of Radix International Educational and Research Consortium, 
September 2018 , Volume 1, Issue 9, ISSN: 2277- 100X.

4. Krishna Chitanay, VadlaMannati and Lokanandha Reddy, “Investors Perception and 
Domestic Private Investments in India - Role of Direct Foreign Investments and 
Economic Reforms”, Indian Journal of Economics and Business, Vol.8, No.1, 2014, 
pp.145-159.

5. Jayabal G., and Kasilingam R., “Determinants of Expected Return of Salaried Class 
Investors in Tamil Nadu”, The Journal of Indian Management and Strategy, Vol.14, 
July-Sep 2015, pp.14-25.

6. Sanjay Sehgal, G.S. Sood and Namitha Rajput, “Investor Sentiment in India – A 
Survey”, Vision –The Journal of BusinessPerspective, Vol.13,No.2, April- June 2015, 
pp.13-20. 

7. Hamid Bahmanpour, “National Savings and Investment Behaviour in Iranian 
Economy”, Prajnan, 31(4) 2002, pp. 313-314.

8. Statman, “A Century of Investors”, Santa Clara University, Department of Finance, 
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9. Rajarajan,V, “Investors Demographics and Risk Bearing Capacity”, Finance India, 17(2) 
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10. Ramakrishna Reddy and Ch. Krishnudu “Investment Behavior of Rural Investors”, 
Finance India, Vol. 23, No.4, 2009, pp.12-17

11. Shinde C.M., and Priyanka zanvar, “An Empirical Study on Factors In�uencing in 
Investment Decision Making in Pune”, International Research Journal of 
Management and Commerce”, Vol. 1, Issue. 6, 2014, pp. 10-23.

X10
X7

X19
X18
X3

X4
X5
X6

X21
X20

X13
X11
X12

.17858

.32333

.36457

.02888

.06486

.11345

.12337

.25754

.05071

.05104

.05456

.18597

.02893

.03522

.02253

.15058

.33057

.00548

.02569

.02107

.11962

.01766

.02856

.20759

.10555

.15919

.65456

.43546

.42564

.36545

.25645

.00877

.22457

.29878

.32564

.21456

.02626

.00545

.45251

.00830

.07955

.88440

.05454

.25461

.01475

.02454

.25478

.32458

.78787

.78451

.02154

.02457

.22454

.01245

.32451

.04545

.05454

.03214

.24545

.14725

.02457

.02654

.45781

.12456

.12422

.12451

.23121

.31462

.04141

.32154

.01458

.01245

.32145

.15457

.23155

.23121

.14514

.01299

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