Impact of Lifestyle on Investment Patterns of Individual Investors

Abstract

The individual characteristics of investors across the world and especially of Indian investors have not been completely researched so far. With more and more investment companies turning up to attract investors it is a matter of great interest for all to know what motivates or propels an investor to adopt a particular investment style or pattern. An investor-driven marketing strategy necessitates an understanding of the demographic, socio-economic and psychographic characteristics of the investors in order to get a sharper picture of financial market segments. So far, in the financial services industry an acceptance of demographics as the total basis of marketing makes for an acceptance of the fact that affluent individuals each earning the same income and living in similar homes or same areas have the same financial needs. This, however, is not correct. The individuals may be equal in all aspects but their financial planning needs may be different. New studies suggest that the personality and lifestyle of a person have a great impact on his investment decision. The present research finds a correlation between lifestyles of individual investors and their demographic and investment related characteristics. The research is based on primary data collected from 72 investors through a self-designed questionnaire based on VALS (values and lifestyles survey) and results are derived using cluster analysis.