A Study on Risk Profiling and Investment Choices of Retail Investors

This research is an attempt to explore the association between various demographical factors, risk profile and investment decision of retail investors. All measures were tested for reliability through computation of Cronbach's Alpha. The Alpha coefficient value was found 0.741 for variables like wealth, risk profile asset class, fixed return, mutual fund return, equity, real estate and gold commodity. Further, the chi-Square and crammer-v statistics has been used to interpreting the association between these factors. And it revealed that the investors do not always behave rationally and their choice of investments is decided by their risk profile and other demographical factors such as age, gender, income, wealth etc. This research is also useful for portfolio managers to construct the right portfolio for the investors according to their needs and preferences.