FINANCIAL AND PHYSICAL ASSETS: A COMPARATIVE STUDY

Household sector comprising individual investors significantly contributes to the capital formation in India by investing their savings in various investment opportunities such as financial assets and physical assets available to them in the market. It is understood that they prefer to invest their savings in those assets they find suitable ones for them. While investing in a particular asset, individual investors look into various factors like size of cash outflow, risk associated with an asset, return from asset, marketability of an asset, etc. A study on which assets are preferred and chosen by individual investors for investment purpose assumes a great significance, In this backdrop, this study is an effort to make a comparison between investment in financial assets and investment in physical assets made by individual investors by tracing the size and pattern, asset preference, drives and length of investment. The study reveals that the majority of individual investors have an investment size between Rs 37,501 and Rs 75,000 whereas among the financial assets, life insurance policies and government securities and among physical assets, agricultural land and gold are the most preferred assets. Individual investors prefer regular and steady income from and safety of financial assets while they prefer local accessibility to and easy manageability of physical assets. It is traced that 26.67% of individual investors have investment length between 6 to 10 years in financial assets and similar percentages of investors have investment length between 16 to 20 years in physical assets. The study suggests that individual investors need to check the quality of assets before they select any assets for investment purpose since the investment markets have become more turbulent due to recent scams prevailing one after another.