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DO’s
General
- Beware of unexpected calls from unknown people introducing quick profit (like money double) schemes.
- Doubt the abnormal promises or high returns in short time.
- Reject investment proposals which require immediate investment.
- Be known by the company you keep (credible promoters)
- Seek written information from companies
- Check past track record of consistent profits, return etc.
- Read small print carefully
- Get a professional opinion / expert advice before investment, even at cost
- When in doubt, don’t commit
- Invest only when you understand the product
- Define your objectives – liquidity, returns, risk mitigation, tax planning
Stocks
- Stay cool
_ Check the prospectus
- Check promoter’s track record.
- Diversify portfolio to distribute risk
- Understand your financial needs
- Invest for reasonably long term
- Average cost by making regular investments.
- Review and churn your portfolio regularly.
- Cross verify the company credentials by credit rating.
Private company investments
- Invest in RBI registered NBFC’s only
- Check scheme approvals
- You can go by promoter credentials
- Invest on return basis, not on incentives
- Question your broker / consultant who is marketing any scheme
- No government agency can insure your money if invested with fraudsters / crooks.
- Seek company registration
- Cross check with regulatory filings
DON’Ts.
- Assume you are a good investor
- Rely on immediately available investment proposals without studying
- Rely blindly on proposals with slogans such as ‘tomorrow will be too late’ or ‘act now’ or ‘golden opportunity’ etc.
- Rely on unresearched predictions
- Accept hot tips or ramous
- Play in grey market
- Follow the herd but take your own call
- Don’t choose investment based on incentive / commission make investment purely on tax benefit basis
- Rush into investment. Investing is not easy.
- Try to time the market
- Get emotionally attached to investments
- Put your all eggs in one basket
- Believe the private rankings
- Believe in target prices given by analysts
- Loose heart in investing
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