issn: 2278-6236 small investor's behaviour on stock ... - Garph.co.uk
issn: 2278-6236 small investor's behaviour on stock ... - Garph.co.uk
issn: 2278-6236 small investor's behaviour on stock ... - Garph.co.uk
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Internati<strong>on</strong>al Journal of Advanced Research in<br />
Management and Social Sciences ISSN: <str<strong>on</strong>g>2278</str<strong>on</strong>g>-<str<strong>on</strong>g>6236</str<strong>on</strong>g><br />
sec<strong>on</strong>d influential factor in <strong>stock</strong> selecti<strong>on</strong> decisi<strong>on</strong> by the resp<strong>on</strong>dents of Guwahati Stock<br />
Exchange.<br />
d) Public informati<strong>on</strong> about Company<br />
It is further observed that 80% of the resp<strong>on</strong>dents use firms’ public informati<strong>on</strong> in their<br />
evaluati<strong>on</strong>s to choose the <strong>stock</strong>. From the investors’ perspective, the reputati<strong>on</strong> of the firm<br />
has highest impact <strong>on</strong> their decisi<strong>on</strong> making. Further they menti<strong>on</strong> that the protecti<strong>on</strong> of<br />
the investor, profile of management and firm status in industry as the significant factors to<br />
influence decisi<strong>on</strong>s. However, resp<strong>on</strong>dents categorically assigned average s<strong>co</strong>re of 4.72 out<br />
of six as str<strong>on</strong>g influential factors in <strong>stock</strong> selecti<strong>on</strong> decisi<strong>on</strong>. This factor is, therefore, ranked<br />
third out of thirteen variables as top influential factor in <strong>stock</strong> selecti<strong>on</strong> decisi<strong>on</strong> by the<br />
resp<strong>on</strong>dents of Guwahati Stock Exchange.<br />
e) Profitability variables<br />
This study further reveals that 75% of the resp<strong>on</strong>dents use profitability variables to evaluate<br />
the <strong>stock</strong> performance. Profitability variables are mostly ratios and are defined as indicators<br />
of a firm’s success at making profits. It is observed that 75% of the resp<strong>on</strong>dents <strong>co</strong>mmented<br />
in respect to use profitability variables and c<strong>on</strong>sider current, future portability and quick<br />
profits through trading and historical profits as <strong>on</strong>e of the tool to assess the <strong>stock</strong><br />
performance but assigned low s<strong>co</strong>re (3.84).<br />
f) Ac<strong>co</strong>unting informati<strong>on</strong>’s<br />
A significant porti<strong>on</strong> of resp<strong>on</strong>dents (65%) use the ac<strong>co</strong>unting statements of <strong>co</strong>mpanies in<br />
their evaluati<strong>on</strong>. Informants <strong>co</strong>unt a few tools of ac<strong>co</strong>unting instruments which are able to<br />
help them in promoting their knowledge to purchase <strong>stock</strong>. The employed ac<strong>co</strong>unting<br />
instruments by resp<strong>on</strong>dents were in order of importance “earnings per share ”, “return <strong>on</strong><br />
equity ” and “net operating profit after taxes “. Further, P/E was less used ac<strong>co</strong>unting<br />
statement that resp<strong>on</strong>dents menti<strong>on</strong>ed. However, resp<strong>on</strong>dents categorically assigned<br />
average s<strong>co</strong>re of 3.8 out of six as str<strong>on</strong>g influential factors in <strong>stock</strong> selecti<strong>on</strong> decisi<strong>on</strong>. This<br />
factor is, therefore, ranked fifth out of six points as str<strong>on</strong>g influential factor in <strong>stock</strong><br />
selecti<strong>on</strong> decisi<strong>on</strong> by the resp<strong>on</strong>dents.<br />
g) Past <strong>stock</strong> price and trend<br />
This research shows that all investors (80% of the resp<strong>on</strong>dents) are unanimous <strong>on</strong> using<br />
historical <strong>stock</strong> price due to the fact that most investor’s predicti<strong>on</strong>s regarding future <strong>stock</strong><br />
Vol. 1 | No. 2 | August 2012 www.garph.<strong>co</strong>.<strong>uk</strong> IJARMSS | 71