Evaluating the Effect of Financial Knowledge on Investment Decisions of Investors from Gandhinagar District

Abstract

In recent time, people don’t have enough money to invest because of high maintenance life style, still few people try to balance their life by investing their hard earned money. But while taking decision on investment, Investors consider different resources and information, mean while they forget to check their own knowledge on financial terms and wisdom on how to invest and where to invest. It is important to know the effect of financial knowledge on the choice of investment avenues in order to study the reliability of their investment decisions. The problem is to check whether the investment decisions are based upon simple investment tips and opinions of other investors or a rational analysis of risk and return associated with the various investment avenues. In this paper an attempt has been made to evaluate the effect of Financial Knowledge on investment decisions of 200 Investors from Gandhinagar District. The study is based upon primary data collected through a structured questionnaire administered to 100 rural and 100 urban investors, drawn through quota sampling according to their various occupation categories. It is hypothesized that investors take rational decisions based upon their financial knowledge.