JMGT_V7_N1_RP4 Sofia Jasmeen S.V. Satyanarayana Journal on Management 2230 – 715X 7 1 44 50 Active Investors, Passive Investors, Discriminant Analysis The investor groups can be clearly bifurcated into two — Active investors and Passive investors. While the passive investors do not constantly reshuffle their portfolio, the active investors do rebalance their portfolio constantly. The research paper is aimed at determining the factors that are considered by active and passive investors while making investment decision and to identify whether both these groups of investors are different in terms of significance they attach to the use of Dividend Models, Asset Pricing Models, and Return explaining Models, Firm Characteristics and Financial Ratios for making investment decisions. Data is collected from 285 respondents and Discriminant Analysis was employed and the discriminant function (Canonical Correlation) revealed a significant association between both these groups (active and passive) and all predictors, accounted for 32.49% of between group variability. June - August 2012 Copyright © 2012 i-manager publications. All rights reserved. i-manager Publications http://www.imanagerpublications.com/Article.aspx?ArticleId=1910