A survey of the factors that investment Management companies consider when Making investment decisions

Abstract

Given the investment decision process that denotes the choice of assets acquired, the amount invested in each asset and the timing of the investment to maximize returns, investors can invest in single assets or in a number of assets. By their very nature the assets invested in bear different characteristics. In order to secure good and productive investments, investors should properly analyze the characteristics surrounding the investment assets. The study was carried out to identify the factors that influence investment in various investment instruments and rank the identified factors in order of importance as viewed by the eleven investment management companies licensed by the Capital Markets Authority. A survey was carried out in which case primary data was collected using a semi- structured questionnaire. The data collected was analyzed using descriptive statistics like mean scores, standard deviation and percentages. It was presented by the use of tables and graphs. The results indicate that numerous factors influence investment in different investment instruments. These factors range from economic factors, company factors, social factors and geographical factors. On the hand even where similar' factors are involved, they influence investment differently in different instruments hence they are rated on varying mean scores. For example an economic factor like inflation influences investment in Government bonds more than it does influence investment in corporate bonds and stocks.