An Investigation of Relation between Risk Tolerance and Demographic, Socioeconomic Characteristics of Indian Individual Equity Investors

The current empirical study is designed to determine the financial risk tolerance level of Indian individual equity investors and discover the relationship between investors’ demographic & socioeconomic characteristics and financial risk tolerance level, and also analyze the impact it can have on the investors using Multi Regression statistical technique. The research concludes that investors’ Age, Education level, Income/Earnings, Number of Dependents of the investor, Number of companies in which investor has invested and Experience of the investor in equity investments, number of Sources of information, Portfolio size are able to influence the Risk Tolerance of the individual equity investors. Whereas Gender, Marital status and Occupation are not influencing the risk tolerance level of the individual equity investors. The findings of the study could be used by the investment product designers to design financial products which can cater to the individual equity investors’ requirements.