issn: 2278-6236 small investor's behaviour on stock ... - Garph.co.uk

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International Journal of Advanced Research in Management and Social Sciences ISSN: <strong>2278</strong>-<strong>6236</strong> to be noted that the literature on investor’s sentiment is still in its infancy, and much remains to be discovered and learnt. There is no comprehensive study in India and particularly in Assam, focusing on market specific factors that influence investor’s sentiment. Hence this study, with the primary objective of analysing data on <strong>small</strong> investors attitudes and perceptions about investment decisions and to identify the market specific factors that influence investors stock selection decisions. VI. ANALYSIS AND INTERPRETATION a) Key factors influencing Stock Selection Decision Table 1 shows the Mean Value of each statement that could possibly influence the Stock Selection Decision of <strong>small</strong> investors in Assam and their respective ranks. According to the sample <strong>small</strong> investors of Guwahati Stock Exchange ,the average value of the top five highly influential factors were ‘Financial statements of companies’ with a mean value of 4.90, ‘Referral’ with a mean value of 4.86, ‘public information’ with a mean value of 4.72 and ‘Profitability variables’ with mean value of Firm’s of 3.84 and so on. Further, according to sample <strong>small</strong> investors of Guwahati Stock Exchange, there were four factors with the lowest priority and had low influence on the Stock Selection Decision which includes ‘Government policies’ (1.66), ‘Calculation of risk’ (1.86), ‘Economic variables’ (2.24) and ‘discounted cash flow tools’ (2.54) . Vol. 1 | No. 2 | August 2012 www.garph.co.uk IJARMSS | 68
International Journal of Advanced Research in Management and Social Sciences ISSN: <strong>2278</strong>-<strong>6236</strong> Table I: Factors Influencing on Stock Selection Decisions. Effective factors in choosing stock Total number of informants [n= 100] Average of scores given by responders Ranks I Financial statements of 70 4.90 I companies Profit and loss statement Balance sheet Corporate financial statement reports Fund flow statement II Accounting Information 65 3.80 V Earnings per share Return on equity Net operating profit after taxes P/E III Second hand information 65 2.83 VIII resources Newspapers Rumors in market Media IV Public information about 80 4.72 III Company Reputation of the company Protection of the investor Company status in industry Members profile of the board V Profitability variables 75 3.84 IV Dividends Current and future portability Quick profits Historical profits Expected corporate earnings VI Referral 75 4.86 II Consulting with the friend Majority stockholders Broker Coworker and colleague VII Financial ratios 65 2.58 IX Profit and loss statement Cash flow statement Auditor’s report VIII Past trading volume of stocks 80 3.33 VII Vol. 1 | No. 2 | August 2012 www.garph.co.uk IJARMSS | 69
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