A Study on Investment Patterns of Demat and Trading Account Holders in Rahata Tehsil

Abstract

Investing has become a crucial activity for securing one's future. A plethora of investment avenues such as bank schemes, gold, real estate, postal services, and mutual funds are available. Investors play a pivotal role in the capital market of developing economies like India, channeling savings into corporate sectors. Investment is widely recognized as the primary driver of economic growth and development for a nation. Individuals invest their money with diverse objectives, including profit, security, appreciation, and income stability. The stock market serves as a platform where numerous individuals with demat accounts engage in electronic share trading through stock brokerage frms. As of January 2021, the total number of demat accounts in India has surged to 51.5 million, up from 40.8 million at the end of the financial year 2020 and 35.9 million in the financial year 2019 (Sultana, 2021).
However, investor behavior exhibits variability, with approximately 75 percent of accounts reported as inactive in March 2020 (Shah, 2020). Many investors trade infrequently or sporadically, and there could be several reasons for this behavior. Investors wield significant influence in the stock market, as a considerable portion of their savings is vested therein. Therefore, understanding the rational behavior of stock traders is imperative for regulatory bodies. In this context, the current study assumes significance, aiming to discern the investment behavior of demat and trading account holders in Rahata Tehsil. The study seeks to explore various reasons why investors refrain from trading or suspend their activities and proposes potential strategies to address this issue.