A Comparative study on Investment Horizons & Volatility : An Analysis with Indian Market

In the analysis of volatility of investment returns, in general the investment horizon is not taken as an important variable in decision-making. Though there is enough literature on time diversification and the importance of time as a second dimension to risk, no such analysis has been done in Indian market. It was analyze that the lng-term investment reduces the risk drastically, even as the returns continue to grow. Thus volatility is an integral aspect of living, while the ancient societies believe in fate; modern man tries to manage the risk associated with change. In the investment analysis risk is a measure of financial vulnerability and it is measured in terms of volatility of return. Investors select their investments based upon their risk tolerance. It is possible to find optimal portfolios which maximize the expected return, for a given risk, or minimize the risk for a given return. It is also possible to find portfolio which optimize risk and return simultaneously. Risk return trade off in market was extensively analyzed in the past. It was studied that there is a relationship between expected return and beta and conduced that lowest risk assets provides highest returns, while the highest risk securities gave lowest returns and so the risk return relationship appeared to be positive. This paper depicts the arguably strong positive economic benefits of age structure change in the context of Indian Stock Market both theoretically and empirically.