Investing in the stock market is considered by many as a great way to grow wealth over time, but it is important to understand the risks involved and to have a well-thought-out strategy before getting started.
Sometimes, new investors fall in the trap of misleading marketing practices promising high or assured returns. Remember, investing in the stock market comes with risks and no one can guarantee that you will make money.
From time-to-time investors are advised through awareness campaigns by stock exchanges, SEBI and other regulated brokers of the market.
Here are a few tips for investors suggested by National Stock Exchange awareness communication;
- Beware of assured / fixed Return schemes: Brokers or their authorised persons or any of their associates are not authorised to offer fixed/guaranteed/regular returns/ capital protection on your investment or authorised to enter into any loan agreement with you to pay interest on the funds offered by you. Note that claims for funds or securities given to the broker under any arrangement/ agreement of indicative return will not be accepted by the Exchange in case of default by your broker.
- Never trust written and oral promises of assured return in equity and derivatives markets.
- Have full knowledge about the product you invest in.
- Do not invest in any schemes run by an entity not having SEBI registration.
- Don’t make any payment in cash to the stock broker.
- Ensure that you fill the KYC form with correct details and strike off the blank fields.
- Register your mobile number and email id with the stock broker, to receive trade confirmation alerts directly from NSE.
- Ensure that contract notes are received from the broker whenever you trade.
- Don’t share your internet trading account’s password with anyone.
- Get a clear idea about brokerage and other charges levied by the broker.
Before investing in any stock, make sure you do your due diligence and research the company, its financials, and its industry. One can find information through company filings, financial news outlets, and analyst reports.
Don’t let emotions drive your investment decisions. Stick to your investment strategy and avoid making impulsive decisions based on short-term market fluctuations.
If you’re new to investing or have a large sum of money to invest, consider seeking the advice of a financial advisor or professional to help you create a well-rounded investment plan.
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