View of A STUDY ON INVESTMENT PREFERENCE OF PERSONS IN THE BEARISH STOCK MARKET

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ACCENT JOURNAL OF ECONOMICS ECOLOGY & ENGINEERING Peer Reviewed and Refereed Journal (International Journal) ISSN-2456-1037

Vol.04,Special Issue 06, (IC-IREASM-2019) October 2019, Available Online: www.ajeee.co.in/index.php/AJEEE

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A STUDY ON INVESTMENT PREFERENCE OF PERSONS IN THE BEARISH STOCK MARKET

Nikhil Deshpande Research Scholar

Dr. Sarita Rana

Professor, St. Paul institute of professional studies, Indore

Abstract - This research paper is concerned with investment by persons in the bearish stock market.The bearish stock market is the market in which stock prices are on declining mode. It deals with savings, Investments, investment avenues, problems faced by the investors,

1. INTRODUCTION

Investment is the allocation of the individual small and big savings on the appropriate place to get the desired return over the period of time. There are number of places where good investment can be made one of which Is stock markets but when stock prices are on declining mode investment decision become difficult.

2. OBJECTIVE

This study focuses on the predefined market condition and the criteria of making stock selection for every kind of investor. The problem faced by the investors is often results into selection of other options for investment. Investors with financial literacy and good knowledge of capital markets generally prefer these kind of investment

3. RATIONAL

The study focuses on the investment preference made by the Investors in the stock market.

Although there are number of options available with the investors. The stock market investment is risky and time consuming which are to be done under expert supervision or guidance.

4. PROBLEM

The main problem with the declining market is that nobody knows when it will start rising and what is the best time to invest in the shares. Therefor there are lot of studies made which focus on the accumulation of the good quality stocks at the constant intervals.

The investors often face problem while selecting the stock for the investment. Every stock has some benefits and some drawbacks which are to be analysed in detail while investing. The economic conditions in the country and around the globe plays an important role therefore that are also needed to be studied.

As far as declining market is concerned the investment should be made in those companies which carry enormous potential and attractive valuation. Investment should not be made in the companies which have bad fundamentals they may be available at huge discount as compared to the high made by them.

I nvestment should not be made in the penny stocks due to therelow price availability new investors make mistake of selecting these companies.

5. RESEARCH GAP

There exists a wide gap between the studies already made they focus mainly on the type of investors like salaries employees, investment by working women, low risk investment.

6. METHODOLOGY AND SCOPE

To fulfil the research objective this study has been undertaken through secondary data and explorative method based on review of literature.

7. SAVINGS

The saving Is the part of the income which is kept aside to meet future expenses. Generally there are small savings which is made out of monthly income. Savings can be better defined as unexpended income kept for future unknown or known expenses.

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2 8. INVESTMENT

Investment Is the amount allocated and expended on the avenues for the return over the period of time. Investment are generally made with the object of return which Is higher than the return on bank deposit. In the bearish markets the investment is made with the long term view which may be more then 2 to 3 years. In the bearish market various blue chips are available at the attractive valuations. The target of the investor should be accumulation of the high quality stocks which are trading at the low price and which contain good upside potential. The potential stocks fetch good returns when market conditions improve.

9. INVESTMENT METHODS

The investor should buy stocks on every decline instead of one shot buying. The stocks with good fundamentals may be available at attractive prices due to the market conditions.

According to the research the stocks with consumption background should be given preference because they perform well in the falling markets. The consumption stocks are the stocks which have daily use products. The aggressive or high beta stocks should be avoided because they fall with double speed in the declining stock market.

9.1 Investment by Direct Buying

The investment by direct buying is the most common way of making investment in the stock markets. Investors buy shares according to there comfort at the market price under it.

9.2 Investment by Equity SIP

Equity SIP is the advanced way of buying a stock on the basis of the prior instruction given to the stock broker. In the equity sip pre defined number of shares are bought at the market trading price.

The equity sip helps to accumulate stock at the low price because under equity sip buying Is done on the constant intervals like every day.

9.3 Investment in equity oriented mutual fund

The investment can be made in the mutual funds which are equity oriented. The equity oriented mutual funds invest indirectly in the stock market in the predefined stock portfolio. The investment in mutual fund is preferred by the less knowledgeable investors.

According to the study it is safe expert monitored and low risk investment.

10. REVIEW OF LITERATURE

Bhardwaj, Raheja, and Priyanka (2012) The paper examined the profitability of Maruti Suzuki Ltd. and Tata Motors Ltd. on the basis of Fundamental analysis tools. The paper covered five years period 2005-06 to 2009-10. Authors used ROI, ROE, GP Ratio, NP Ratio, OP Ratio, EPS, DPS and Dividend Payout Ratio to examined the profitability.

Mona, Ahmad, and Fayssal (2010) investigated the static and dynamic relationship between annual stock returns, dividend yield, PE ratio and total assets. A sample of 24 companies listed in the Amman Bursa was selected. The annual average value for the suggested variables from 1980 to 2006 was calculated.

Mitra (2011)analyzed the profitability of moving average based trading rules in the Indian market through the study on „How rewarding is Technical Analysis in the Indian Stock market?‟ He used four stock index series in this study, like: - S&P CNX Nifty, CNX Nifty Junior, CNX IT Index for the period 1st January, 1998 to 31st March, 2008. The study found that, most technical trading rules were able to capture the direction of market movement reasonably well and give significant positive returns both in long and short position.

Aggarwal and Gupta (2009) investigated if accounts based fundamental analysis strategy can help investors earn excess returns on portfolio of high book to market companies in India. The strategy adopted was based on Piotroski (2008) who identified 9 fundamental signals to form a composite score (f-score) capable of separate but ex-post winner from losing among high book-to-market composition the US stock market. However, it was not clear whether the result of such a strategy could be directly applied to Indian stock market.

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3 11.CONCLUSIONS

The term investment is a wider term. When it comes to investment in bearish stock market it becomes difficult and time consuming. The main purpose of investment in a bearish stock market is building a good portfolio that contains diversification of good quality stocks which are bought at attractive valuations.

The study results into accumulation of good quality stocks so that when market improves good appreciation In the stock prices can be observed within the reasonable time frame.

REFERENCES

1. Bhardwaj, Rajesh, Raheja, Rekha and Priyanka (2012), “Fundamental Analysis of Selected Listed Companies of Automobile Industry”, Economic Challenger, Number-14, Issue-54, pp. 59-63.

2. Mitra, Subrata Kumar (2011), “How Rewarding is Technical Analysis in the Indian Stock Market,”

Quantitative Finance, Volume 11, No. 2, pp. 287-297.

3. Zafar, S.M. Tariq, Chaubey, D.S. and Sharma, S.P. (2011), “A Study of Fundamental Analysis of Indian Social Sector Banks”, Vedaang, Volume 2, No. 1, pp. 26-43.

4. Mona, AI-Mwalla, Ahmad M. AI-Omari, and Fayssal, Ayad, (2010), “The Relationship between P/E Ratio, Dividend Yield Ratio, Size and Stock Returns in Jordanian companies: A Co-integration Approach”, International Research Journal of Finance and Economics, Issue 49, pp. 87-103.

5. Aggarwal, Navdeep and Gupta, Mohit (2009), “Do High Book-to-Market Stocks offer Returns to Fundamental Analysis in India”, Decision, Volume 36, No. 2, pp.155-170.