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Risk and Returns: The Popularity of Different Investment Avenues Among Salaried Individuals
1 Puspa Rani and 2 Vishakha Sharma
Abstract:
This research examines the investment preferences of salaried individuals, concentrating on the complex relationship between risk and return that shapes their financial decisions. These individuals typically encounter distinct financial limitations and objectives, including retirement funding, acquiring property, and generating wealth, which significantly impact their investment choices. The dynamics of risk and return play a crucial role in these decisions, as higher-risk investments, like equities and mutual funds, present the potential for greater financial gain but also entail higher volatility. In contrast, more conservative investment options, such as fixed deposits and gold, offer stability but typically result in lower returns. Analyzing this balance allows investors to tailor their portfolios to their financial goals and risk appetite. The study's primary insights indicate that salaried individuals generally gravitate towards conservative investment vehicles, such as bank deposits and gold, owing to their low-risk characteristics. However, a subset of this group exhibits an inclination towards higher-risk assets, including stocks and mutual funds, motivated by improved financial knowledge and objectives for long-term growth. Additionally, variables like age, income level, and financial literacy are substantial determinants of these investment inclinations, underscoring the necessity for customized financial planning approaches.
