AN EMPIRICAL STUDY ON RISK PERCEPTION AND INVESTMENT PREFERENCE OF INDIVIDUAL INVESTOR WITH SPECIAL REFERENCE TO COIMBATORE CITY

In this present study, the findings reveal that most investors possess a moderate level of awareness regarding financial instruments, indicating that while basic familiarity exists, there is still significant scope for improvement in financial literacy. The study further highlights that investment decisions are primarily driven by financial return expectations, safety considerations, and social or informational influences, reflecting a combination of rational and behavioural factors. The empirical analysis also confirms that investors can be broadly classified into distinct segments high, moderate and low awareness groups emphasizing the heterogeneity in investor knowledge and perception levels. Moreover, the study identifies key challenges faced by investors, particularly lack of financial knowledge, market volatility, and concerns related to fraud and mis-selling, which continue to hinder effective investment decision-making. The regression results establish a significant positive relationship between risk perception and investment preference, indicating that investors’ understanding, and interpretation of risk play a crucial role in shaping their investment choices. Overall, the study underscores the importance of enhancing financial literacy, improving access to reliable financial information, and strengthening investor education initiatives. These measures will not only empower individual investors to make more informed and rational investment decisions but will also contribute to the development of a more efficient and inclusive financial market ecosystem in the region.

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