Since the onset of this year 2022, I came across 2-3 news articles about some persons cheating on many people with their fraudulent practices. They all did one common thing- ‘promised huge & quick returns on investments.!…
Such incidents happen majorly in tier II & III cities, small towns & villages.
Clients of such investment companies’, range from farmers, salaried people to big businessmen.
With polished behavior, fluent talks, attractive data on the potential returns, these companies lure people so that they invest more & more money.
When people ‘invest’ their hard-earned money in those ‘investment schemes’, initially they all get returns but afterwards they stop getting anything even the money they invested in.
One fine day, these ‘investors’ come to know that ‘the so-called expert’ was a cheater & company has shut its doors already!
There are many such cases pending before the law.
What all can we do? Take an effort to be a well informed investor-
Here are some tips to be the one-
- Be aware:
If we are spending hours before deciding on which mobile phone to purchase, then how can we take investment decisions without a thought?
Today we live in the world of internet. Huge data & information is available on our fingertip. Let’s use it for our own good.
Let’s read & understand ‘basics’ about-
- different instruments available
- Different concepts of personal finance
- Steps of investing & withdrawing from particular investment instrument
- Tax implications
- How can we track performance of our investments?
- Whether the investment is valid or not
- How transactions are safe when we invest or withdraw from that instrument
- How can we review that instrument?
Basic questions like above are worth to seek answers for.
We can read blogs, books, newspaper, watch news & informative shows about personal finance.
Please note that, if the investment is transparent, ethical & abide by the law, then we will surely get detail information about it from official sources.
When we are armed with this information, we can ask better questions, can acknowledge if anyone is making false promises & also can refrain us & others from making any wrong investments.
- Introspect & ask for help:
If we come across any such person who is –
- claiming attractive quick returns on investments,
- showing huge data to support the claim
- explaining the strategy to achieve desired returns quickly;
then after listening to his peach, we should pause & introspect.
If we already know basics of all valid & legal ways of investing, then we should introspect to know if the ‘said investment’ is good to go for.
When we find it difficult to comprehend, then we should ask some expert about it.
An expert working in ‘fiduciary’ capacity can show us the right way.
- Never say ‘yes’ immediately & disclose all the personal details:
When any such person approaches us with their offering about investments & attractive returns, we should ‘listen’ carefully but should not rush to ‘say yes’ to their offer.
Sometimes, they may ask us to give our personal details for their records i.e. contact details, bank details. If they ask, then we should object it freely.
While investing in any valid instrument, official websites or distributors or transaction facilitators ask for such details in right way while applying for the investment.
‘cash’ is never accepted in such valid instruments & payments are done via cheque or net banking.
Please keep this in mind.
- Check credentials & their authenticity:
As per the norms & regulations set by ‘Securities & exchange board of India’, only ‘SEBI Registered Investment Advisers’ can ‘advise’ on investments. They are not affiliated to any distribution network of financial instruments or any insurance.
They work in ‘fiduciary capacity’.
When we meet any person who is ‘offering investment advice’ & displaying lot of knowledge about it, we should ask for its credentials.
Their education qualification, license, certificates should be cross checked.
Please note that, you can check their details on the official website of ‘securities & exchange board of India’. You can also call investor support contact no of SEBI & talk to them about it.
SEBI always takes efforts to educate investors & protect their rights.
It is now our responsibility to be a well informed investor!