Risk Assessment and Its Impact on Strategic Investment Decisions

Abstract

Indian capital markets have witnessed unprecedented rise and fall, without logical or explicable
factors. There has been unhealthy speculation, replacing fair competition and selfish interests,
scuttling common investors’ interests. Whatever investment schemes one may choose, these should
match the risk profile, financial goals and time frame. Various factors, such as an economic
downturn, dissolution, mergers and acquisitions make, the stock markets turn extremely volatile. The
process of risk assessment involves both decision making to take risk and developing a strategy that
minimizes the risk. Previous researches have indicated that assessment to take or not to take risk is
often 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 of
research exists that had focused on identifying determinants of risking decision making in the
investment 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 the
investment decision process. The risk assessment is nothing but the perceived probability of receiving
the reward associated with success of an investment decision which is required by an individual
before he will subject himself to the consequences associated with failure. This research paper tries to
describe and conduct a research on what factors risk assessment is made and its impact on strategic
decisions while making investment