Understanding Rural Youth Investment Behaviour in Indian Stock Markets: A Study of Risk and Return

The stock market has emerged as a significant avenue for investment in India, attracting not only urban investors but also a growing number of individuals from rural areas. Among these investors, the youth demographic is increasingly looking towards stock markets as a means to build wealth and secure their financial futures. However, despite the increasing interest, the investment behaviour of rural youth in India, particularly in regions like Vidarbha and Marathwada in Maharashtra, remains underexplored. This research focuses on understanding the investment behaviour of rural youth in the stock market, with a particular emphasis on factors such as financial literacy, risk tolerance, and expected returns. The study investigates how these factors influence the stock market participation of rural youth, their investment strategies, and their risk-taking attitudes. Financial literacy plays a critical role in shaping investment behaviour, and its influence on decision-making processes is well-documented. Rural youth, especially in less developed regions, often have limited access to formal financial education, which may affect their confidence in making informed investment choices. Furthermore, risk tolerance is a crucial determinant of investment frequency and strategy, as young investors with high risk tolerance tend to prefer aggressive investment options, while those with lower risk tolerance opt for more conservative approaches. The research specifically explores the investment behaviour of rural youth in two regions of Maharashtra: Vidarbha and Marathwada. These regions were selected due to their distinct socio-economic profiles and varied levels of access to financial resources and information. By examining the factors influencing investment behaviour in these regions, the study seeks to provide a comprehensive understanding of how rural youth navigate the stock market landscape, their challenges, and the role of financial education in shaping their investment decisions. Through this research, the study aims to contribute valuable insights to policymakers, financial institutions, and educators seeking to enhance financial literacy and inclusion among rural youth, enabling them to make informed, confident investment decisions in the stock market.