Assessing the Relationship Between Financial Literacy and Investment Decisions: An Indian Perspective

Abstract

Purpose: This research study aims to explore the influence of financial literacy on investment decision-making among postgraduate students in India. Recognizing that educated youth are not only prospective investors but also pivotal in shaping the country’s economic future, this study investigates the extent to which their financial knowledge and skills impact their financial behavior and choices.

Methodology: A total of 150 postgraduate students from various institutions in India participated in this study, providing valuable insights into their understanding and application of financial principles using PLS-SEM. The study focuses on several key dimensions: awareness and understanding of financial products, ability to access financial services, money management practices, familiarity with investment options, and overall financial skills. These components were selected to assess the participants’ comprehensive financial competence.

Result: The results of the study indicate a significant and positive relationship between financial literacy and investment decisions among postgraduate students. The study underscores the importance of integrating financial education into academic curricula and promoting financial awareness programs targeted at youth.

Discussion: The study recommends that financial institutions, educators, and policymakers work collaboratively to design initiatives that enhance financial literacy among students. Such efforts will not only empower individuals to make better financial decisions but will also contribute to building a financially secure and economically resilient society.