Equity allocation of Indian investors is extremely high irrespective of their risk tolerance
Investors with a low comfort level to losses are taking a higher amount of risk
Investors with higher financial mastery are timing the markets with strategic lumpsum investments along with SIPs
ET Money, one of India’s largest Mutual Funds apps & fastest growing Investment Advisory Platform, recently released an exclusive report titled “India Investment Personality Report 2022” that looks into the minds of lakhs of investors. The insights have been drawn from their unique feature of Investor Personality assessment that assesses investors on four key parameters of risk tolerance, loss aversion, financial mastery, and overconfidence levels and draws a map of their unique investor psyche.
The assessment gives investors 8 unique Investor Personality tags that are closest to the type of investor they are. The report reveals that the majority of Indian investors are Strategizers (35%) – a type of investors who are action takers willing to take calculated risks. This is followed by Explorers (31%) – investors who are smart and, at times, overconfident risk takers.
The other investor personality types – Protector, Analyzer, Seeker, Adventurer, Researcher, and Observer- constitute the country’s remaining 34% of investors.
As per the report, Indians have an average risk tolerance range between 52 and 81 which means they are comfortable taking a decent amount of risk when it comes to investing. While high-risk tolerance can deliver good outcomes over the long term, the report also shows that investors with low-risk tolerance are also investing heavily in equities, indicating risk-taking capacity is being ignored. The report further indicates that the majority of Indians have low comfort levels with respect to incurring losses. Yet they are taking high risks, which is bound to make them uncomfortable during market volatility.
Interestingly, as per the report, Indian investors with high financial mastery are making strategic lumpsum investments along with their ongoing SIPs as opposed to investors with lower financial mastery who are sticking to only SIPs. Further on the positive side, women investors are seen to be more organized and well-planned, which is evident with them having a higher share in personality types of Strategizers and Researchers compared to men.
Commenting on the release of this exclusive report, Mukesh Kalra, Founder and CEO of ET Money, said, “Your investment biases impact how your money grows. And being aware of these biases can help you make smarter investing decisions. The ‘ET Money India Investor Personality Report 2022’ helps us look at the real-time situation, i.e. Indian investors are blindly chasing returns without considering their risk tolerance. Making better decisions starts with decluttering your thoughts and seeing what is driving your investment decisions. That is one major reason why ET Money Genius, our flagship offering, first understands users’ personality type and then recommends portfolios which are in-line with their risk tolerance levels. The report shows that investing decisions among Indians are driven by high returns and market rush, and there is a need to counteract this widespread behaviour. ET Money Genius, a membership service, in this case, can assist investors in understanding their investment objectives and build portfolios that are highly optimized.”
Link to download the India Investment Personality Report 2022 – bit.ly/3PMBO16
About ET Money
ET Money is India’s fastest-growing investment and wealth management platform, with a total of over $3bn worth of investments under management. In less than 5 years, ET Money has built a solid customer base of over 10 million users across 1400 cities. The platform has been a pioneer in building industry-first technical solutions like paperless video KYC for MF investments, the country’s first Aadhar-based SIP payment feature, amongst others. Website: www.etmoney.com.