The trading activity in the stock markets have increased and more investors are investing in
the markets. However, it is important to note that there are risks associated with all markets
and investors should be vigilant and alert in their investment activity.
the markets. However, it is important to note that there are risks associated with all markets
and investors should be vigilant and alert in their investment activity.
Here are some useful pointers to bear in mind before you invest in the markets:
- Make sure your broker is registered with the SEBI and the Exchanges and do not deal with unregistered intermediaries.
- All investments carry risk of some kind. Investors should always know the risk that they are taking and invest to match their risk tolerance.
- Do not be misled by market rumours, luring advertisement or 'hot tips' of the day.
- Take informed decisions by studying the fundamentals of the company. Find out the business the company is into, the future prospects, quality of management, past track record etc. Sources of knowing about a company are through annual reports, economic magazines, databases available with vendors.
- If anyone, including your financial advisor, advises you to invest in a company, be cautious. Spend some time checking out about the company before investing.
- Do not be attracted by announcements of excellent results / news reports, about a company. Do your own research before investing in any stock.
- Do not be attracted to stocks based on what an internet website, research reports, advisories promote, unless you have done adequate study of the company.
- Investing in very low priced stocks or what are known as penny stocks do not guarantee high returns.
- Be cautious about stocks which show a sudden spurt in price or trading activity.
- Any advice or tip that claims that there are huge returns expected, especially for acting quickly, may be risky and may lead to losing some, most, or all of your money.