Is this the right investment?

Once again, I came across this question from an investor, “I have invested in such and such avenue. Is it the right decision?

On probing further, one gets the answers, which have by now become highly predictable for me.

In almost all cases, the investment avenue has a lock-in provision, which means the investor cannot get out of the investment even if one realizes that it is not a right instrument. Why, then, this question keeps surfacing after one has locked-in the money? Is it ok to assume that one did not ask this question before signing the cheque?

Doesn’t it make sense to ask questions BEFORE signing the cheque?

We learn from the story of Abhimanyu that it was easy to get into the chakravyuh, but without knowledge, it was difficult (sometimes impossible) to get out of it. Same applies to an investment with lock-in. Buying is easy, getting out is not.

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Investors have the right to information – 2

We wrote about the investor’s right to information yesterday. Click here to read the post.

On interacting with someone, we realised that this can be misinterpreted as all the sellers of financial products are crook or frauds. A milder version of this interpretation could be that they are at least involved in mis-selling for their own benefit at the cost of the financial consumer.

Well, the intent of our post was not that.

Asking questions to understand the product one is investing in is very different from questioning someone’s integrity. Seeking information before investing is always the right approach and nobody can argue against that. This would mean while you trust your advisor, don’t do so blindly. This will also ensure that the advisor is alert and does not fall prey to the human emotions. If both the investor and the advisor keep doing their job, the likely outcome is going to be “win-win” for both.

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Investors have the right to information

Nobody can stop an investor from asking questions before investing. Nobody can force an investor to invest even after answering all the questions.

Questions are the best weapons in the hands of the investors.

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Time invested, not wasted

Nobody can stop an investor from asking questions before investing. Nobody can force an investor to invest after answering all his or her questions. Even being given the answers to the questions, the investor is free to walk away without signing the cheque.

Time spent in asking questions is time invested and not time wasted.

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