A Behavioral Study on Investment Diversification and Risk Perception: Evidence from Salaried Professionals in Bengaluru’s Manufacturing Industry.

Abstract

This study explores the investment behavior and risk-taking tendencies of salaried employees working in the manufacturing sector, with particular reference to Bengaluru. The city’s well-established industrial zones, including Peenya Industrial Area, Bommasandra Industrial Area, and Aerospace Park, create a distinctive economic setting where stable employment conditions and predictable income patterns shape financial choices differently from those observed in service-oriented sectors. The main objective of the research is to examine how demographic factors such as age, income, and level of financial awareness influence individuals’ willingness to take investment-related risks. A descriptive research approach was adopted, and primary data were collected from 200 respondents using a structured questionnaire based on a Likert scale. The analysis is guided by the Theory of Planned Behavior to understand how perceived control over financial decisions and knowledge levels affect investment diversification. The findings suggest that most respondents fall within a cautious to moderately conservative risk category. Investment decisions are largely concentrated in traditional and secure instruments such as Public Provident Fund, fixed deposits, and gold. Although respondents operate within a technologically advanced urban environment, participation in market-linked avenues like equities and mutual funds remains limited. This gap is mainly attributed to insufficient financial understanding and a strong preference for capital protection. The study also highlights that tax-saving provisions serve as a key motivator for initiating investments; however, broader participation in diversified financial products remains low. In this context, the research emphasizes the importance of structured financial education initiatives, particularly those facilitated at the organizational level. The insights generated from this study are expected to assist financial service providers and policymakers in designing strategies to improve investment awareness and participation among industrial employees.