Investor's Investment Knowledge

Investor’s Investment Knowledge

I still see in our country that people do not have financial literacy. They do not know the proper process for investment. They still believe in fix deposit, purchasing land or LIC policies etc without any knowledge of any investment objective. The worst thing is that they still believe LIC endowment policies are the best option for long term investment. There are need for each investor to know about the investment product in detail in which they are going to invest.

For example in most of cases people who have LIC policies do not know about their risk cover and expected return at the end of tenure. It is my personal experience that 90% of policy holders do not know about their sum assured and expected return. Only they know about that premium amount which they are paying every year. They even do not serious about to know about inflation and real rate of return. Many investor invest in land for short term period like 6 months or 1 year without any idea of capital gain tax and liquidity.

The proper way for investment is that first, you should clear about your investment horizon after that check whether your investment will beat the inflation. After deduction taxes and adjusting inflation what will be your real rate of return? These type of question should be answered by your financial adviser or company agent.

Please keep in mind there is huge difference between company agent and financial adviser. Financial adviser will help you plan to your investment and future goal in realistic and prudent way. Other side the agent will be more interested for their commission only. The agent has not much concern about your hard earned investment or your future goal. Their main objective is to take your sign on the form, collect the investment amount cheque and get the commission in their pocket.

The agent, only advise you about the product for a one particular company. In other side the financial adviser will suggest you the best option available in the market. The reason for this that the adviser do not work for any one particular company.

My suggestion for all of you is that when you plan for your investment, please never go after emotional advertisement and you should have fair idea about liquidity, time frame, inflation, real rate of return and your future goal of investment. It is responsibility of all advisers and agents that they should give the proper detail of financial product to the investors.

If you have doubt about investment product and want more information regarding investment or you need investment services, feel free to ask us. We also conduct the seminar on investment and financial planning. If you are interested for conducting seminar in your city, just drop the mail.

Warm regards,

Arvind Trivedi

Certified Financial Planner

arvind.trivedi79@gmail.com