Investment preferences over the individual lifecycle: a case of private universities in Kenya
Karanja, Joyce Nyairera
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This research sought to investigate the investment behavior of individuals over the lifecycle. It had three objectives; to investigate the investment preferences over the lifecycle, to investigate factors influencing the investor’s investment decision and to investigate investment assets per the investor life cycle. The research used both qualitative and quantitative methods through used of questionnaires and interviews to understand the investor’s behavior. The target population was the faculty, student and administrative staff of private universities. Data analysis was carried using chi tests, correlational and regression analysis and correlational analysis. The findings showed for ages below 25 years the main goals were education of self, build up savings and meet basic needs. The investment assets held by this group were saving accounts. In the age group between 25-40 years the main goals were planning for retirement, meet basic needs and build up savings. The financial assets held by this group were saving accounts, real estate and debt instruments. In the age between 41-60 years the main goals were planning for retirement, build up savings, meet basic needs and education of family. The investment holding included saving accounts, derivative and debt instruments. In the age above 61 years, the main goals were planning for retirement and current income generation. The asset holding was stocks and land. This showed that to some extent the asset allocation was consistent with the guidelines of the Lifecycle investing theory. The findings showed that older people held stocks than younger people and that planning for retirement cut across all the ages. The findings also showed that younger people invest more in saving accounts than older people. The major factors that influenced an investor’s decision were ease of access of the investment asset, risk factors associated with the investment and the amount of income available for investing. In addition, the main factors that the suppliers of investment assets considered were the investment goals of the individual and the amount of income available for investment.