Thursday, February 11, 2010

Don't fall prey to tips for quick returns: Sebi
SEBI has observed a proliferation of websites that offer investment advice to investors. Many of these websites offer investment advice not backed by any reasonable basis and prima facie appear to be misguiding. Investors should realize that when they follow such advice they are exposing themselves to undue risk in using unconfirmed information available on such Websites/Blogs/astrology predictions or advice/Newspaper Advertisements/SMS’s/Emails/rumours/ advice rendered through television or print media and trading tips on an intra-day basis, short term basis or long term basis. The public in general is advised not to fall prey to or be lured by such sources of information promising quick gains and unrealistic high returns. It is advised that investors should take well informed investment decisions.

The following may be borne in mind:
  • Deal only with/ through SEBI registered intermediaries.
  • Do not get carried away by advertisements promising unrealistic gains and windfall profits.
  • Do not invest based on market rumours or unconfirmed or unauthentic news.
  • Be aware that advice through television or print media does not mean that it is the opinion of the channel or publisher.
  • Be extra cautious while using information available from media sources such as Websites/ Blogs/ Newspaper Advertisements/ SMS’s Emails/rumours/ advice through television or print media for information and tips for intra-day, short term or long term investing.
  • Do not be guided by astrological predictions on share prices and market movements.
  • Do not make investment decisions on the basis of implicit/explicit promises made by anyone.
  • Do not be unduly influenced by indicative returns.
  • Do not be unduly influenced by Bull Runs/Bear Runs while making investment decisions.

Remember: Always know your risk-reward BEFORE investing.
  • There are many websites which educate us as investors, there are news websites, company websites, database websites which we can use to know more about the companies that we wish to invest.
  • Never invest on market rumours or tips, if one says one has inside information why oneself is not taking full benefit and sharing with everyone else. Are the so-called insiders so reckless that they don't know how to protect their own interests?
  • Now there are so many  business channels and investment related newspapers and a multitude of analysts write their views but nobody is bothered about knowing their credentials, a failed trader becoming a super analyst is a  rarity but it seems it is becoming abundance. May be SEBI is of the same view and that is why they have had to caution investors.
  • Predicting market turns is always difficult but as human beings we have to predict for future course of action. As investors we need to be cautious with those who claim they can time the market like a school time-table, only certainty in market is its uncertainty so never invest on any market call / tip before knowing the credentials of the person, IT IS YOUR HARD-EARNED MONEY AT STAKE!

Caution to investors : SEBI press release 

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