Gold, as An Investment Avenue Gaurav Bagra1 Dr. Shobha Khinvasara 2 Abstract Demographic profile and buying behaviour can be the two determinants for making perception about the investor's objective. Evidences also suggest that factors such as profession, gender, risk/return objectives and educational qualification affect an individual's investment decision. So, it is important to study the dependence/relationship between various demographic factors, and the investment personality exhibited by the investor. This study aims to investigate the effect of the demographic profile of investors on investment choice of both gold and non gold. The research intends to investigate the buying behaviour of investors as gold their investment with possible reasons of purchase, mode of purchase and options of purchase and brings out the relationship between gold and stock market as the investment avenue and the perception towards the gold buying behaviour. The paper is based upon primary data. Chi Square Test of Independence has been used to test the dependence of events, skills, goals and strategies. Keywords: Investment, Buying Behaviour, Risk. Introduction old is presumed as one of the safest and secure source of investment for the Indians. GBecause of its universal recognition and usage, the buying behaviour plays an important role of the investors. The decision making of investment in gold is bounded by several factors such as objectives, demographics and risk/returns in comparison to stock market and other non gold investment options. Through this research, it is intended to figure out any dependence or relationship between demographics and investment objectives as gold as a primary investment choice. Further, various other elements of purchase such as reasons for investment, strategy behind investment and preferences can also be established and evaluated. 1. Asstt. Prof. Amity Business School, Jaipur. 2. Professor, SIMCS, Jaipur. Gold, as an Investment Avenue 109 Professional Panorama : An International Journal of Applied Management & Technology Objectives l To study possible dependence/independence between demographics (age, profession, gender, and education) on the choice of gold as a primary investment avenue. l To study possible dependence/independence between the strategy and objectives of an investor on the choice of gold as a primary investment avenue. l To study possible dependence/independence between demographics (age and gender) on the return/risk objective behind investment in any avenue (gold or otherwise). l For the investors who do consider gold as a key investment avenue, to further understand their gold buying behaviour. Literature Review Investors' demographic characteristics positively correlate with investors' behaviour and type of investment chosen. Furthermore, investors' risk behaviour positively correlates with the type of investment. Risk seeking investors prefer to invest in capital market instruments, than do risk avoiding investors who prefer to put their money in bank accounts and real assets. By investing their funds in riskier assets, risk seeking investor may expect higher returns from those assets. This research also suggests that level of education correlates with risk behaviour and type of investment, as evidenced by previous studies (Lutfi, Schooley and Worden, 1999). Investor's education correlates positively with their risk tolerance. Investors with higher level of education have more knowledge and skills that are useful in making investment decision. Having more skills, these investors tend to be more overconfident and take more risk than those with lower level of education. (Surabaya, 20101). Studies have also showed that there is relationship between age and risk behaviour and type of investment. These results in with previous works that state investor's affect investment decision. Relative young investors, those whose age are not older than forty years old, are more productive than the old investors. On the contrary, elderly investors, especially those who are retirements want to have more comfortable lives, and therefore they prefer to invest in assets with more stable returns (Riley and Chow, 1992; and Evan, 20042). Bajtelsmit, V. L. & Bernasek, A. (19963) in their research study explained for gender differences in investment and risk-taking in an effort to help, guide data collection and identification of relevant variables for empirical research. Wang, H. And S. Hanna,19975) concluded that relative risk aversion decreased as people aged (i.e., the proportion of net wealth invested in risky assets increases as people age) when other variables are held constant. They concluded that risk tolerance increased with age and therefore rejected the constant life-cycle risk aversion hypothesis. (Dheeraj & Mandot) The role of gold in asset management is currently very topical. Much of the interest, however, is related to short-term issues such as hedging the value of the dollar. From a longer term Gold, as An Investment Avenue 110 Professional Panorama : An International Journal of Applied Management & Technology perspective a fairly wide consensus exists that gold retains inflation hedging properties despite considerable fluctuations in the shorter term. Prior to the early 1970s, gold's price was fixed to the dollar and its investment value was necessarily limited. There now exists more than thirty years of return history to evaluate gold as a strategic asset. Earlier studies that reported favourable evidence for the investment value of gold were generally limited by shorter term return history, not always relevant index comparisons, unsophisticated statistical estimation techniques and unstable and ineffective optimisation frameworks. Results show that gold may have a comparable portfolio weight to asset classes such as small cap and emerging markets due to its value as a diversifying asset class. A strategic allocation to gold is dependent on portfolio risk level. It was found a small though significant allocation of 1% to 2% at low risk and 2% to 4% in a balanced portfolio. While not statistically significant at high risk levels, gold may provide stability in poor markets and economic climates to long-term institutional strategic investors (Michaud & Pulvermacher, 20066) M Surya, A Yunita, (June 20127) in their research said while gold is quite risky as an individual asset; its returns are generally independent of those on other assets. This suggests that gold can play an important role in a diversified portfolio. Especially in recession and financial crisis, increasing gold investment to a higher level can reduce account volatility, and protect one's financial future in the long run (Anil 2010; Maloney 2008; Spall 2009) (WANG, 20128) Research Methodology Research Design Descriptive Research Design Sampling Technique Convenience Sampling l Sample size: 122 l Selection of Respondents: The respondents are selected on the basis of investments made by them and specifically those which are involved in investment in gold. Data Collection l Primary Data The primary data was collected with the help of questionnaires online. l Secondary Data The relevant secondary data was collected from various sources like journals, research papers and internet. Gold, as An Investment Avenue 111 Professional Panorama : An International Journal of Applied Management & Technology The questionnaire has been designed to study the investment behaviour, including objectives of investment and outlook towards gold as an investment avenue for people with varied demographics (age, gender, profession, educational qualification). To understand the objectives of investment in gold vs. other opportunities (stocks, real estate etc.) for various demographics, the following three aspects were considered. l Strategy of investment. l Estimation from investment (Returns) l Time/ style of investment. To study the buying behaviour of investors in gold, the following aspects were considered: l Reasons for investments in gold. l What investments in gold? l Purpose of buying gold. Data Analysis The data was collected from 122 individuals across varied demographics. This data has been analysed based on the following outlines to get key insights: l To study possible dependence/independence between demographics (age and gender) on the return/risk objective behind investment in any avenue (gold or otherwise). l To study possible dependence/independence between demographics (age, profession, gender, and education) on the choice of gold as a primary investment avenue. l To study possible dependence/independence between the strategy and objectives of an investor on the choice of gold as a primary investment avenue. l For the investors who do consider gold as a key investment avenue, to further understand their gold buying behaviour. For the first three outlines above, chi-square tests of independence were applied with a significance level of 5%. For the fourth outline, frequency analysis of the responses from the individuals who do invest in gold was done to get insights. Discussion and Interpretation of Data Correlation In the world of finance, a statistical measure of how two securities moves in relation to each other. Correlations are used in advanced portfolio management. If the change in one variable appears to be accompanied by a change in the other variable, the two variables are said to be co-related and this inter-dependence is called correlation. In real life, perfectly Gold, as An Investment Avenue 112 Professional Panorama : An International