A Study on Investment Behavior of Young Individual Investors in Bangalore City

Abstract

Investors exhibit diverse mindsets when making decisions about investing in a particular avenue. Every individual aspires to invest savings in the most secure and liquid form possible. However, the decision-making process varies based on personal risk aptitude, financial literacy, and socio-economic background. Investment behaviour is associated with activities such as searching, evaluating, acquiring, reviewing, and disposing of investment products. It reflects how an individual allocates surplus resources among the various financial instruments available.
This paper analyzes the trading and investing behaviour of young professionals aged between 25 and 35 years in Bangalore City, India’s technology and startup hub. Young investors in this age group typically base their investment decisions on self-perceived competence, though some also rely on professional financial advisors. Their investment objectives range from financial stability and wealth creation to generating additional income. The study identifies key factors responsible for increased investment activity among young professionals in Bangalore.
A structured questionnaire was used to survey 200 respondents from various sectors across Bangalore. Based on the findings, the paper examines factors influencing investment behaviour in the stock market. The study concludes that for young investors, investment decisions are independent of gender, but significantly influenced by age and income levels. The paper also discusses behavioural aspects derived from the utility theory developed by Von Neumann and Morgenstern, which suggests that investors aim to maximize expected utility while minimizing risk. Finally, the study highlights that financial literacy and behavioural awareness play critical roles in investment decision-making among Bangalore’s youth.