Investors Shift Focus to Stability and Tax Benefits in Post-Covid Financial Landscape

Investors Shift Focus to Stability and Tax Benefits in Post-Covid Financial Landscape

A recent study reveals that Indian investors are increasingly prioritizing stability and tax advantages in their investment decisions, a trend that has evolved since the onset of the COVID-19 pandemic. The research, titled "Investment Patterns and Preferences of Indian Retail Investors: COVID as an Influencer," was conducted by the PHD Chamber of Commerce and Industry in collaboration with the Jagan Institute of Management Studies.

The study examined investment behaviors over four years, comparing trends from the two years preceding the pandemic (FY 2018-2020) with those from the two years following it (FY 2021-2023). The findings indicate notable shifts in investor preferences across various asset classes.

In the realm of mutual funds, the factors influencing investment choices shifted significantly post-COVID. While pre-pandemic investors considered returns and risk levels, the post-pandemic landscape has seen liquidity gain prominence alongside returns and the regularity of those returns.

When it comes to bonds, the pandemic has heightened the importance of tax benefits, liquidity, and higher returns, making these key considerations for investors.

Stock investments have undergone a transformation as well, with investors now primarily viewing stocks as high-yield opportunities, placing less emphasis on factors like tax benefits or liquidity.

In the gold bond market, the significance of tax benefits and consistent returns has remained steady both before and after the pandemic.

The real estate sector has also seen a shift; previously, investors prioritized the likelihood of quickly selling properties, while post-pandemic preferences have leaned towards tax benefits and the regularity of returns.

For derivatives, investment choices were influenced by risk, liquidity, returns, and the consistency of those returns. However, post-pandemic, the factors of tax benefits and regularity of returns have gained considerable importance.

The overall performance of India's capital market has remained robust in the years following the pandemic, bolstered by a favorable regulatory environment, strong economic growth, and heightened investor confidence in the nation's growth trajectory.