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A Study on Investment Behavior of Young Individual Investors in

Bangalore City

Arshiya Khanum.,

Dr. C. Gomathi

Research Scholar, Periyar University Sri Vidya Mandir Arts and Science College, Autonomous,

Uthangaria – Tamil Nadu

HOD Cum Research Supervisor, Department of Commerce Sri Vidya Mandir Arts and Science

College, Autonomous, Uthangaria – Tamil Nadu

DOI: https://dx.doi.org/10.51244/IJRSI.2025.1210000192

Received: 02 November 2025; Accepted: 08 November 2025; Published: 15 November 2025

ABSTRACT

Investors exhibit diverse mindsets when making decisions about investing in a particular avenue. Every

individual aspires to invest savings in the most secure and liquid form possible. However, the decision-making

process varies based on personal risk aptitude, financial literacy, and socio-economic background. Investment

behaviour is associated with activities such as searching, evaluating, acquiring, reviewing, and disposing of

investment products. It reflects how an individual allocates surplus resources among the various financial

instruments available.

This paper analyzes the trading and investing behaviour of young professionals aged between 25 and 35 years

in Bangalore City, India’s technology and startup hub. Young investors in this age group typically base their

investment decisions on self-perceived competence, though some also rely on professional financial advisors.

Their investment objectives range from financial stability and wealth creation to generating additional income.

The study identifies key factors responsible for increased investment activity among young professionals in

Bangalore.

A structured questionnaire was used to survey 200 respondents from various sectors across Bangalore. Based

on the findings, the paper examines factors influencing investment behaviour in the stock market. The study

concludes that for young investors, investment decisions are independent of gender, but significantly

influenced by age and income levels. The paper also discusses behavioural aspects derived from the utility

theory developed by Von Neumann and Morgenstern, which suggests that investors aim to maximize expected

utility while minimizing risk. Finally, the study highlights that financial literacy and behavioural awareness

play critical roles in investment decision-making among Bangalore’s youth.

Keywords: Investment behaviour, young investors, saving objectives, Bangalore professionals, behavioural

finance.

INTRODUCTION

A traditional tenet of investment theory asserts that investors are rational beings who attempt to maximize

expected utility based on their expectations of future returns. Economic utility theory views the investment

decision as a trade-off between current consumption and future consumption. The investor evaluates the

benefits of spending today versus the advantages of investing to achieve greater satisfaction later.

According to Von Neumann and Morgenstern’s utility theory, investors are rational, able to handle

complex choices, risk-averse, and wealth-maximizing. They seek portfolios that offer the highest expected

returns while minimizing risk (mean-variance approach).

However, in reality, behavioural tendencies often influence these decisions. In a growing economy like India,

especially in urban centers such as Bangalore, young professionals are increasingly participating in the

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financial markets. Their decisions are shaped by income levels, exposure to financial information, and

psychological factors.

Investment Behaviour

Investment behaviour is crucial to an individual’s financial future and depends on several interrelated factors

such as risk attitude, financial literacy, income stability, peer influence, and socio-cultural background.

Previous studies (East, 1993; Chen and Volpe, 1998) have demonstrated that education in financial

management significantly improves the quality of investment decisions, leading to more informed and

disciplined financial planning.

In the context of Bangalore, often referred to as the “Silicon Valley of India,” the phenomenon of investment

behaviour among young individuals takes on a distinctive dimension. The city’s diverse population of IT

professionals, entrepreneurs, freelancers, and corporate employees operates within a fast-paced, high-

income environment that encourages digital adoption and financial experimentation. Young professionals

in Bangalore, typically aged between 25 and 35, have greater access to online trading platforms, fintech

apps, and robo-advisory services, which have redefined traditional investment approaches.

The culture of innovation and technology in Bangalore has also fostered a mindset of calculated risk-taking,

especially among the youth who are comfortable with volatile instruments such as equities, mutual funds,

and cryptocurrencies. Many young investors view financial markets as an extension of their professional and

digital lives—dynamic, data-driven, and opportunity-oriented. The presence of numerous financial literacy

workshops, startup incubators, and fintech firms in the city further contributes to a growing awareness of

personal finance and portfolio diversification.

Additionally, Bangalore’s cosmopolitan character, exposure to global markets, and the influence of peer

networks play a significant role in shaping youth investment behaviour. Social media discussions, investment

forums, and mobile investment communities have made financial participation more social and trend-driven.

This behavioural shift has resulted in a generation that is not only financially ambitious but also digitally

confident, seeking faster and smarter ways to grow wealth while balancing risk with informed decision-

making.

Behavioural Perspectives

To optimize investment decisions, an understanding of human nature from a financial perspective is vital.

Investors require foresight, patience, analytical ability, and financial discipline to navigate uncertainties in the

market. Demographic determinants such as education level, income, gender, family background, and socio-

economic class have been widely acknowledged as major influences differentiating investment behaviour.

In the case of Bangalore-based young professionals, investment behaviour is shaped by their fast-paced

lifestyle, high aspirations, and early financial independence. Many of them begin earning at a young age

due to early entry into sectors like IT, fintech, consulting, and startups, which expose them to higher

disposable incomes compared to their peers in other Indian cities. This financial capability motivates them to

explore a wide spectrum of investment options ranging from mutual funds, direct equity, SIPs, and digital

gold to more speculative assets like cryptocurrency and startup equity.

However, this financially empowered generation often faces the psychological challenge of balancing

ambition with caution. Unlike institutional investors who rely on rational models like mean-variance

optimization, individual youth investors are often influenced by behavioural biases.

 Overconfidence bias is common among tech-savvy individuals who believe that access to information

automatically equates to superior decision-making skills.

 Herding behaviour, driven by peer influence and online communities, pushes many to invest in

trending assets without fully assessing risks.

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 At the same time, a significant section displays risk aversion, especially those from conservative

financial backgrounds, leading them to prefer safer instruments like PPF or fixed deposits despite

earning well.

The presence of fintech apps, viral financial advice, and social media-driven investment culture further

amplifies these behavioural tendencies. As a result, young investors in Bangalore often fluctuate between

strategic wealth creation and impulsive decision-making, making financial awareness and behavioural

discipline vital components of sustainable investment success.

Investment Motivations of Young Professionals

Reducing financial insecurity, achieving early financial independence, and acquiring tangible assets such as

homes, vehicles, and luxury goods are strong motivators among Bangalore’s young investors. The city’s

dynamic economic landscape, driven by the IT sector, startup culture, and multinational corporate

ecosystem, has nurtured a generation of financially aware and ambitious professionals. For many, investment

is not merely about saving but about creating multiple streams of income, building long-term wealth, and

attaining economic freedom at an early age.

The desire to grow wealth and capitalize on stock market opportunities has become a defining feature of

young professionals in Bangalore. Most of them prefer diversified investment portfolios comprising mutual

funds, equities, bonds, ETFs, SIPs, digital gold, and even cryptocurrency. The trend reflects a shift from

traditional saving habits to goal-oriented investing, where financial decisions are aligned with personal

milestones such as higher education, entrepreneurship, home ownership, or early retirement.

A key enabler of this behaviour is the city’s technological ecosystem. Bangalore, being India’s fintech hub,

offers easy access to digital trading platforms, robo-advisory tools, and AI-powered investment apps that

simplify financial management. Young investors frequently rely on platforms like Zerodha, Groww, and

Upstox to execute trades, track portfolios, and learn about financial instruments. The digital-first mindset of

the city’s youth allows them to make faster, more data-driven decisions while balancing work-life demands.

Moreover, the peer-driven culture of Bangalore encourages discussions around wealth management and

investment strategies in professional circles, cafes, and co-working spaces. The influence of social media,

financial influencers, and online investment communities has made financial participation more social and

aspirational. Consequently, young investors are not only motivated by monetary returns but also by the

prestige and empowerment associated with being financially independent.

In essence, the investment motivations of Bangalore’s youth represent a blend of ambition, technological

awareness, and social aspiration, reflecting a new generation of investors who are digitally equipped,

globally informed, and determined to achieve financial security through smart, disciplined investing.

Role of Behavioural Finance

Modern financial markets are heavily influenced by market sentiments—psychological and emotional factors

that often outweigh pure logic in investment decisions. These non-tangible forces, such as optimism, fear,

greed, and herd mentality, create fluctuations in investor behaviour and market trends. In this context,

behavioural finance has emerged as a vital discipline that combines insights from psychology and economics

to understand why investors sometimes make irrational decisions, even when presented with accurate

information.

For young investors in Bangalore, behavioural finance plays an especially critical role. The city’s youthful

workforce, dominated by professionals in the IT, engineering, finance, and startup sectors, is continuously

exposed to fast-moving digital platforms, real-time trading apps, and constant financial news updates.

This exposure has increased financial participation but also heightened emotional reactivity to market

volatility. Many investors are influenced by short-term price movements, social media trends, and peer

recommendations, often leading to impulsive trading or speculative decisions.

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Behavioural finance concepts such as overconfidence bias, herd behaviour, anchoring, confirmation bias,

and loss aversion are particularly visible among young professionals.

 Overconfidence bias leads many to overestimate their knowledge or ability to predict market

movements, especially after experiencing a few profitable trades.

 Herding behaviour arises when investors imitate the actions of peers or online influencers rather than

conducting independent analysis.

 Loss aversion explains why young investors often hold on to losing stocks too long, fearing regret,

while quickly selling winners to “lock in” gains.

 Anchoring bias causes them to rely excessively on initial price levels or recent market information,

ignoring broader economic indicators.

The influence of fintech platforms and digital trading tools has also transformed the emotional landscape of

investing. While apps such as Zerodha, Groww, and Paytm Money make investing convenient, their gamified

interfaces and instant feedback loops can trigger emotional decision-making, where investors chase

immediate gratification rather than long-term growth.

On the positive side, awareness of behavioural finance helps young investors cultivate financial discipline.

Understanding biases allows them to recognize emotional triggers and develop strategies such as portfolio

diversification, systematic investment planning (SIP), and long-term goal setting, which reduce the impact

of market volatility. Many Bangalore-based investors are now attending financial literacy workshops,

webinars, and corporate training programs that emphasize emotional control and rational decision-making.

Thus, behavioural finance serves as a bridge between human psychology and investment rationality,

offering young investors the tools to balance risk and reward, make informed portfolio decisions, and avoid

the pitfalls of impulsive or emotionally driven investing. In the context of Bangalore’s digitally active and

ambitious youth, integrating behavioural finance principles into everyday investment decisions is not just

beneficial—it is essential for achieving sustainable financial success.

LITERATURE REVIEW

Several studies have explored how psychological biases shape investor behaviour and decision-making.

Research across behavioural finance has identified key influences such as overconfidence, competence effect,

herding behaviour, anchoring, home bias, and sensation seeking, all of which play significant roles in

explaining deviations from rational investing. These insights form the foundation for understanding modern

investment behaviour, particularly among technologically informed youth investors in urban centres like

Bangalore.

Odean (1998) attributed the excessive volume of individual trading to investor overconfidence, explaining

that investors often overestimate their knowledge and ability to interpret market signals. This tendency leads

them to engage in frequent trading, expecting superior returns, even though evidence shows that such

behaviour typically results in lower net gains. Among young Bangalore investors, this phenomenon manifests

in active participation on trading platforms like Zerodha and Groww, where easy access and instant execution

often reinforce overconfidence.

Glaser and Weber (2003) expanded the concept of overconfidence by categorizing it into miscalibration,

illusion of control, and the “better-than-average” effect. Their findings suggest that investors not only

misjudge probabilities but also believe they can control unpredictable outcomes. For young professionals in

Bangalore, the illusion of control is amplified by digital trading interfaces and algorithmic insights, which

create a perception of mastery over market trends even when risk factors remain high.

Barber and Odean (2001) found that men tend to trade more frequently than women due to higher levels

of overconfidence. This behavioural difference results in reduced net returns because frequent trading incurs

greater costs and exposes investors to short-term volatility. In the context of Bangalore’s youth, this gendered

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pattern can still be observed—male investors tend to engage more in active equity trading, while female

investors often adopt more systematic and long-term investment approaches such as SIPs and mutual funds.

Malmendier and Shantikumar (2003) observed that small investors are often naïve about the biases present

in analysts’ recommendations, leading them to interpret such advice literally. This finding is particularly

relevant in the digital era, where Bangalore’s young investors frequently rely on social media influencers and

online analysts for stock tips, sometimes mistaking promotional opinions for objective financial analysis.

Such blind reliance can result in misinformed investment decisions.

Graham et al. (2004) explored the competence effect, linking it to increased trading activity and home bias.

They found that investors who feel more knowledgeable or competent in local markets prefer domestic stocks,

believing they possess an informational advantage. This is reflected in Bangalore’s investment landscape,

where young investors tend to favour Indian tech companies, startups, and mutual funds they are familiar

with rather than diversifying globally, indicating a preference shaped by perceived competence.

Grinblatt and Keloharju (2006) identified sensation seeking and overconfidence as two critical drivers of

high trading activity. Sensation-seeking investors derive excitement and emotional satisfaction from market

participation, often treating trading as a thrill-seeking activity rather than a rational wealth-building process.

Bangalore’s youth, immersed in a fast-paced and innovation-driven environment, often exhibit this

behaviour—engaging in short-term trading, crypto speculation, and high-risk ventures for the adrenaline

of quick profits.

Cohn-Urbach and Westerholm (2006) demonstrated that frequent trading among individual investors

generally results in lower returns compared to less active participants. The study emphasized that emotional

reactions, impulsive decisions, and short-term thinking reduce long-term portfolio performance. These

observations are especially relevant for Bangalore’s young professionals, who, despite being financially

literate, may still fall prey to impulsive decisions triggered by market fluctuations or peer influence.

In addition to these, Wood and Zaichkowsky (2004) examined the role of risk attitude, showing that

individuals’ tolerance for risk significantly impacts portfolio composition. Thaler and Benartzi (2004)

studied savings behaviour, concluding that structured and automated saving systems enhance long-term

financial security. Similarly, Loix et al. (2005) analyzed financial orientation, finding that attitudes toward

money and investment are closely tied to education and upbringing. Collectively, these studies underscore that

investment behaviour is not purely financial but deeply behavioural and psychological.

Building upon these foundational studies, the present research aims to analyze how such behavioural and

demographic factors manifest among young investors in Bangalore—a city uniquely characterized by high

digital literacy, exposure to financial technology, and an evolving culture of early financial independence.

Objectives of the Study

1. To identify key factors influencing investment behaviour of young investors in Bangalore.

2. To assess the correlation between age and investment activities.

3. To examine the saving objectives among young professionals.

4. To identify preferred investment avenues among young investors.

5. To analyze the impact of demographic variables on financial awareness and investment choices.

Hypotheses

H1:Investment is independent of age.

This hypothesis proposes that an individual’s age does not have a significant impact on their investment

behaviour. It assumes that younger and older investors may exhibit similar levels of financial awareness and

decision-making ability, especially in a city like Bangalore where access to digital financial platforms and

online education minimizes age-related differences in investment participation.

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H2: Investment is independent of gender.

This hypothesis suggests that gender does not play a determining role in shaping investment preferences or

decisions. Both male and female investors are considered equally capable of making informed financial

choices, influenced more by personal goals and financial literacy than by gender-based differences. In

Bangalore’s professional environment, where women and men share similar access to financial tools, this

hypothesis becomes particularly relevant.

H3: Investment is independent of income.

This hypothesis assumes that an investor’s income level does not necessarily dictate their investment

behaviour. It implies that individuals across different income brackets may show comparable tendencies

toward saving, risk-taking, and portfolio diversification. In the context of Bangalore’s diverse workforce, many

young professionals invest not purely based on income but driven by aspirations for financial independence

and wealth creation.

RESEARCH METHODOLOGY

Preliminary Study

A preliminary survey was conducted among young professionals working in the IT, banking, education, and

start-up sectors across Bangalore. The purpose of this study was to gain an initial understanding of the

investment habits, awareness levels, and behavioural tendencies of urban youth. Informal discussions with

financial advisors and investment consultants were also carried out to identify emerging trends among first-

generation investors. Insights from this stage helped in refining the questionnaire and selecting relevant

behavioural variables for detailed analysis. The preliminary study thus laid the foundation for a more

structured investigation of investment behaviour in Bangalore’s dynamic professional environment.

Sampling Design

Respondents were chosen using convenient sampling from major business districts such as Koramangala,

Whitefield, Indiranagar, Electronic City, and MG Road. The final sample consisted of 200 investors aged

between 25–35 years, each having basic knowledge of financial markets. The sampling frame included

individuals employed in both public and private organizations to ensure a balanced representation. Care was

taken to include participants with varied income levels and professional backgrounds to capture diverse

financial perspectives. The selected areas were chosen due to their concentration of young professionals and

vibrant start-up culture, which make them suitable for studying urban investment patterns.

Data Collection

Data was collected through a structured, interviewer-administered questionnaire during September–

October 2024. Each respondent provided feedback on their investment preferences, risk attitudes, saving

goals, and portfolio composition. The questionnaire included both closed-ended and Likert-scale questions to

ensure accuracy and comparability of responses. Participants were briefed on the study’s objectives to

encourage honest and thoughtful answers. The collected data was then coded and tabulated for statistical

analysis, ensuring confidentiality and ethical research standards throughout the process.

D. Analysis Method

Responses were analyzed using a combination of statistical and graphical tools, including pie charts,

weighted ranks, and chi-square tests, to examine the dependency of investment decisions on demographic

factors such as age, income, and gender. Weighted ranking was applied to evaluate the relative importance of

various investment instruments and the preferences of young investors in Bangalore. Pie charts provided a

visual representation of the distribution of responses, making it easier to identify trends and patterns. The chi-

square test was specifically used to determine whether there were any significant associations between

demographic variables and investment behaviour. Additionally, descriptive statistics such as mean, frequency,

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and percentage were calculated to summarize the data and provide a comprehensive overview of investment

tendencies among the respondents. This combination of methods ensured both quantitative rigor and clear

visualization of the results for meaningful interpretation.

Data Analysis and Interpretation

Age Profile

Observation: Majority of respondents was between 27–35 years, indicating that mid-20s to early 30s is the

most active investment phase among Bangalore youth.

Analysis: This age group typically has stable income, some disposable savings, and is beginning long-term

financial planning.

Gender Profile

Observation: 62% male and 38% female investors participated.

Analysis: Men dominate investment participation, likely reflecting higher risk-taking tendency and cultural

factors, though female participation is growing in Bangalore’s urban sectors.

No. of Respondants

25-26

27-28

29-30

31-32

33-35

10%

20%

30%

40%

50%

60%

70%

Male Female

Series1

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Monthly Income

Observation: 70% earned between ₹50,000–₹1,20,000, typical of Bangalore’s IT, finance, and start-up

professionals.

Analysis: This indicates that the survey targeted financially capable professionals with potential for

discretionary investment. Income stability supports regular investment in growth-oriented instruments.

Sector-wise Investment

Observation: Mutual funds (45%) and equities (35%) were preferred, followed by fixed deposits and digital

gold.

Analysis: Young professionals prefer market-linked instruments that offer better returns over traditional

options. Digital gold and FDs represent conservative choices for risk-averse individuals.

0.1

0.2

0.3

0.4

0.5

0.6

0.7

0.8

1 2 3 4 5

Earnings

% of Earnings

10%

15%

20%

25%

30%

35%

40%

45%

50%

Mutual Funds Equity Fixed Deposits Digital gold

Investment Preferences

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Preference for Investment

Observation: Primary objectives were growth and wealth creation.

Analysis: Young Bangalore investors are focused on long-term financial goals, wealth accumulation, and

portfolio diversification.

Factors Governing Investment Decisions

Observation: Risk, liquidity, and returns were the top considerations.

Analysis: Investors show a balanced approach, seeking moderate risk for optimal returns while ensuring

liquidity for emergencies.

10%

20%

30%

40%

50%

60%

Growth and

wealth creation

Security Accumulation Others

Preferenve of motive

Risk Return Liquidity Others

% of preference

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Reasons for Investment

Observation: Motivations included financial independence, and asset creation

Analysis: Indicates that Bangalore’s young professionals are goal-oriented, combining personal ambition with

financial planning.

Trading Frequency

Observation: 52% traded monthly, 28% quarterly, 20% occasionally.

Analysis: A majority of young investors are active traders, possibly influenced by digital trading platforms and

fintech apps.

asset creation Others

% of Preference

10%

20%

30%

40%

50%

60%

Trade monthly Quaterly Occasionally

% of Occurance

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Proportion of Income Invested

Observation: Typically 15–25% of monthly income is invested.

Analysis: Indicates disciplined saving habits and willingness to allocate a significant portion of income toward

wealth creation.

Factors Considered Before Investment

Observation: Key considerations include company performance, expert advice, and online reviews

Analysis: Bangalore investors rely on a mix of fundamental analysis and digital resources, reflecting tech-

savviness and informed decision-making. Few investors believed little more on expert advice and self

experience

10%

15%

20%

25%

30%

35%

40%

45%

50%

10% 10%-25% 25%-40% 40%-50%

% of Preference

0.05

0.1

0.15

0.2

0.25

0.3

0.35

1 2 3 4

Factors to be considered for

investment

% of Preference

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Stock Market Decisions

Observation: Majority relied on mutual fund platforms and Robo-advisory apps.

Analysis: Highlights the growing preference for automated advisory services among tech-savvy young

investors who value convenience and algorithm-based recommendations.

Reaction to Market Crashes

Observation: 60% held investments, 25% bought more, and 15% exited temporarily.

Analysis: Majority exhibit risk-averse yet strategic behaviour, showing patience during downturns. A

smaller group takes advantage of market dips, reflecting opportunistic strategies.

Mutual fund

Platforms

Robo-ads Apps Knowledge Information

% of Relevance

0.1

0.2

0.3

0.4

0.5

0.6

0.7

1 2 3

Reaction on market Fluctuations

% of Reaction

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LIMITATIONS OF THE STUDY

1. The study was confined to Bangalore city, and results cannot be generalized for all urban regions in

India.

2. The sample size of 200 respondents may include sampling bias.

3. Responses may be influenced by social desirability or reluctance to disclose financial information.

4. The study only considers investors aged 25–35, excluding other age groups that may have different

investment behaviour.

5. Convenience sampling may not capture the full diversity of Bangalore’s young professional population.

6. Short duration of data collection (September–October 2024) may not reflect seasonal investment

trends.

SCOPE FOR FUTURE RESEARCH

This research focuses on young investors in Bangalore only. Future studies could expand the scope by

comparing investment behaviour across different Indian metropolitan cities such as Mumbai, Delhi,

Hyderabad, and Pune. By conducting cross-city studies, researchers can identify regional variations in risk

appetite, financial literacy, and investment preferences. Additionally, including a larger and more diverse

sample size could provide a more comprehensive understanding of urban young investors' behaviour across

India. The use of advanced statistical techniques and econometric models may enhance the accuracy of

findings and reveal more subtle patterns in investment decision-making.

Further research could incorporate psychometric assessments to evaluate the impact of personality traits,

cognitive biases, and risk perception on investment choices. Longitudinal studies tracking investor behaviour

over time would offer insights into how preferences and strategies evolve with changing financial knowledge,

income levels, and market conditions. Moreover, given the growing influence of technology, future studies

may analyze the role of fintech platforms, digital advisory tools, and the adoption of emerging investment

avenues such as cryptocurrencies and ESG (Environmental, Social, Governance) funds among young

investors. Understanding these trends could provide practical recommendations for financial institutions,

policymakers, and educational programs targeting younger demographics.

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