Risk Assessment and Its Impact on Strategic Investment Decisions

V. Shanmugasundaram

Abstract

Indian capital markets have witnessed unprecedented rise and fall, without logical or explicablefactors. There has been unhealthy speculation, replacing fair competition and selfish interests,scuttling common investors’ interests. Whatever investment schemes one may choose, these shouldmatch the risk profile, financial goals and time frame. Various factors, such as an economicdownturn, dissolution, mergers and acquisitions make, the stock markets turn extremely volatile. Theprocess of risk assessment involves both decision making to take risk and developing a strategy thatminimizes the risk. Previous researches have indicated that assessment to take or not to take risk isoften linked to previous experience attitudes, behavior available information knowledge and so on.Regarding individuals investment decision process, very less attention has been given and a dearth ofresearch exists that had focused on identifying determinants of risking decision making in theinvestment decision. Risk assessment refers to the individual investor tendency to take or avoid risk.In general risk assessment will be positively associated with individuals risk taking behavior in theinvestment decision process. The risk assessment is nothing but the perceived probability of receivingthe reward associated with success of an investment decision which is required by an individualbefore he will subject himself to the consequences associated with failure. This research paper tries todescribe and conduct a research on what factors risk assessment is made and its impact on strategicdecisions while making investment

Abstract

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