SEBI Registered Investment Advisor, One Whom You Can Trust For Your Investment
Dec 21, 2018 | 17:11 PM IST
Dec 21, 2018 | 17:11 PM IST
A serious question - when it comes to your stock investment who do you trust? Your beloved friends and neighbours, your stock broker, financial channels and newspapers? Generally, these are the only options retail investors have to fall back on. Sadly, most of the times these "reliable" options fail investors. Is it that these guys are leading you on the wrong path on purpose? Not really, the truth is that the stock market is an extremely complex concept. Most of the people feel they know the market but sooner or later the hollowness of their claims become clear as air.
So the question still remains unanswered - whom should you trust? Whose word should you take when you are at that critical point of making a 'buy' or 'sell' decision?
Your "Trusted" Friends Are Not So Trustworthy After all
There are many investors who just blindly follow the advice or the share market tip given by their friends. I don't mean to say that your friend means you any harm, but it's likely that your friend received that tip from one of his friends who got it from his friend's friend. So, it is possible that this distant friend may not care about your best interest. The point here is that this is how the herd mentality in the market gets formed, and more often than not it leads to failure.
To identify good stocks one needs to assess all the fundamentals, trends and patterns of the stock before ascertaining its best buying level and to determine its growth potential. A free tip will never do that, at best, it can give you some intraday gains. But most of the investors end up losing a lot of money going through this channel.
When they have such vested interests, do you think, by any chance, brokers will provide a stock call for value investing? Not really.
Financial News Channels And Newspapers, Just Report!
The stock market is a big part of our economy. Naturally, it gets a lot of airtime and newsprint. Business journalism is so big that it gets dedicated channels and newspapers which only carry business and financial news stories. The common mistake people make is to expect advice for their investment from these mediums. Though there are various features on these channels which make you believe that they are extending advisory aid to you, however, it's so generic that it's hardly of any use. It is just a share price list and nothing else.
If you check the nature of reporting of the financial media in the thick and thin of the market, their true face will be revealed. When the market had collapsed in 2008, the financial news channels across the globe had left no stone unturned in creating panic and fear psychosis amongst the investors. On the other hand, when the market rallies, the same media creates the atmosphere of great euphoria with absolute disregard for possible corrections or roadblocks ahead. Financial media, like general media, just report the news. These are TRP driven mediums, providing personalized service is not their objective.
Right Things To Seek From The Financial Media
It is not that financial news channels don't add any value to your investment wisdom. They do carry a lot of informative features which are very useful for investors. For example, many financial news channels and newspapers carry programs and articles on tax saving and understanding the complex operational issues related to investment which can be very useful for investors. However, the problem starts when you start to expect personalized investment advice from these mediums.
Remember, Stock Brokers Are Not Stock Analysts
Let's clear this confusion once and for all - stock brokers are not stock analysts, their single-minded objective is to induce you to do more and more trades. The point to note here is that stock brokers are well versed in stocks and have the ability to identify a good stock from bad stock. Stock tips coming straight from a broker has more chances of hitting the target, but it still doesn't suffice the long-term objective. Reason being, stock brokers are salesmen at best, and they represent a brokerage firm which gains every time you make a trade. Hence, more you trade more brokerage the brokers and the firms earn.
If you are looking at the stock market as a platform of investment then the first thing you should do is stop listening to your stock brokers. There is a sea difference between a stock analyst and a stock broker. The former studies and analyses stocks and explore and test it on all the fundamentals and latter just recommend it without any in-depth research. Though they try to impress upon you that they know everything about the market but a broker is not an ideal person to go to for investment advice.
SEBI Registered Investment Advisor Is Your Real Friend
Drafting an investment plan is a work of precision. All the details of your financial needs have to be categorized in a short-term and long-term bracket. Accordingly, your instruments of investment have to select. All this takes a lot of knowledge and a lot of time. Hence no one does it for free. Hiring services of a good stock advisory firm not only gives a better insight into the financial world but also provides much-needed assistance for making the right choices.
Just imagine, would a tailor be able to stitch a trouser for you without taking your measurements? It is impossible, right? Investment is just like that. To plan it, one has to have a full understanding of your financial goals, your short-term and long-term investment needs, etc. After analyzing all these details one can chalk out an investment plan that perfectly suits all your requirements.
Benefits of Hiring SEBI Registered Stock Advisory Company
Compliance- SEBI registered advisor is governed by SEBI. Therefore, these firms are audited on the capital adequacy and infrastructure front. The audit helps to protect the investors from financial fraud. To make it crystal clear, by subscribing to Sebi registered stock advisory company is like investing trustfully.
No More Fake Promises- As discussed earlier SEBI ensures all the diligence towards the activities of the registered advisors. This, in turn, avoids the possibility of the frauds and scams. SEBI has enforced an Act to govern all the SEBI registered stock advisors. The act defines that to provide the stock recommendations the firm needs to register with SEBI. And once registered with SEBI, the firms can not make the fake promises regarding the higher profitability.
Risk Assessment- SEBI has mandated the compulsory KYC and risk assessments for investors before offering services. With this a SEBI registered stock advisories first evaluate your risk appetite. Due to which investors safety is ensured as well as capital is also protected.
Apart from the above benefits a SEBI registered stock advisory company, can offer you many other benefits in your investing life. A right stock advisor can accelerate your investment performance as well as can align your investment to your financial goals. However, selecting the right stock advisor is something you need to look into. Because rather than getting yourself into stock market hassles to create wealth, a hassle-free investing life is always preferable. A SEBI registered investment advisor, can let you do the things which you are best at. And meanwhile, he takes care of your stock market investment and creates wealth for you.
In India, there are many registered and unregistered investment advisors. Picking best and most authentic SEBI registered advisory company is your next task. To make your choice easy, here are some simple steps to pick the best SEBI registered stock advisory.