Fortunately for the investor there is usually a barrage of 'free investment advice' at his disposal from many quarters. Unfortunately for him, the quality and nature of expertise is suspect. So there is a lot of filtering that needs to be done at his end before he can take an investment decision.

Below we have listed some 'experts' who may have your best interest at heart, but may not necessarily be dishing out the right investment advice for you.

1. Grandfather/Uncle
How often have we heard this, 'Son, there is nothing better than a fixed deposit to meet your investment needs.' Or 'Post-office schemes are your best bet.'

To be sure, our ancestors have grown on an investment diet of fixed deposits and post-office schemes (NSC, KVP, PPF). That was when the government and banks were the most popular institutions to mobilise public savings.

Post-liberalisation of the financial sector we had first private mutual funds, and later private insurers launching innovative products for the investing community. Now we have equity funds, debt funds, balanced funds, single premium insurance plans and unit-linked plans (ULIPs).

The investment options at your disposal have increased by a multiple and they compete well on returns as well as liquidity vis-à-vis the traditional fixed deposits/post-office schemes that our ancestors preferred.

2. Neighbourhood agent
How often have we heard this, 'This is a great IPO, you should invest in it.' Or 'This fund has an impressive track record and you must own it.'

The good thing is that your 'resourceful' neighbourhood broker/mutual fund agent usually has a list of investment options that he believes you must consider urgently. The bad news is that most, if not all, options are suggested by him without too much thought to whether they fit into your investment profile.

In other words, they may not necessarily be in your best interests. So you need to ask a lot of questions before you go by your agent's advice/tip.

3. Friend/Colleague
How often have we heard this, 'This stock I bought last month is up 20% already. My broker had told me it was a great buy.'

Or 'I was watching this business channel last night and I could not understand a word of the technical analysis, but they seemed informed and I think we should look at their tips seriously.'

Like the grandfather/uncle in point 1, at least you can be sure that your friend/colleague has your best investment interest at heart.

You can't really fault him for dishing out advice like an expert because at the end of the day he is just like you -- someone who is trying to learn the ropes and gets a thrill out of making recommendations based on tips from brokers/business channels/websites.

On your part you need to be a lot more cautious because equities and related investments (like equity funds) are risky business and your investment must be based on something more solid like fundamental equity analysis/research as opposed to a flimsy tip doing the rounds on the media.

4. Cautious relative
How often have we heard this, 'Don't disturb your surplus cash, let it be in the bank account.' Or 'I tried to be ambitious with my money like you and lost my shirt.'

Perhaps nothing serves an investor better than the experience of other investors. It helps him learn from common mistakes made by others so that he can steer clear of them.

However, not all advice and experience that come your way are legit. Because your cautious relative lost a lot of money in equity funds/stocks does not necessarily make it a bad investment. The premise on which that investment was made needs to be examined more closely.

There is no debate on the fact that equities for instance, have provided the best return possible over the long-term (at least 5 years). So if someone is telling you otherwise, there is obviously a problem at the investor's end rather than with the investment class (equities in this case).

5. Bullish fund manager
How often have we heard this, 'Markets are 6,000 now, but we think the rally will last till 7,000.' Or 'Markets look really attractive at 3,000 levels and this is a great time to enter the markets.'

That's one lesson we can learn from fund managers -- how to remain perennially optimistic in life, or in this case, perennially bullish on the markets. Fund managers (save for a few) have an 'unwritten' mandate -- get fresh investors in the fund and ensure that existing investors remain with the fund.

This is linked to a lot of things, most important of them being fund manager fees, which is a percentage of the assets invested in his fund. Fund manager's comments must be considered, but more often than not you need to temper it with a little common sense of your own.

Common sense will dictate to you that markets are undervalued at 3,000 levels and you must invest. By the same token it will tell you that at 6,000 you have made a lot of money and you should be getting out because markets appear over-stretched at these fantastic valuations.

So regardless of the advice you get, you must never stop using your own common sense.

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