Only prudent investors have better chance of having better returns on stock investments. Here are some DOs and DON'Ts that require to be observed by the investors while investing in the stock market so as to reduce the investment risk.
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Ensure that you have read and understood all the terms and conditions of the account opening form.
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Always deal with a broker registered with the stock exchange and SECP.
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Give clear instructions to your broker/agent for the buying and selling of securities, preferably in writing.
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Always make payments through crossed cheque only in the name of concerned the brokers.
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Before investing in any security, please check about the credentials of the relevant company, its management, operations and recent announcements made by it and various other disclosures made under various regulations.
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There are no guaranteed returns on investment in the stock market.
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Adopt trading / investment strategies appropriate with your risk-bearing capacity as all investments carry some risk, the degree of which varies according to the investment strategy adopted.
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Always keep complete record of your investments/trading.
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Ensure that you are holding securities before you sell and have cash before purchasing.
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Maintain your own CDC account with the CDC for safe custody of the securities.
Get your securities transferred to your own CDC account on each settlement.
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In case of any trade dispute with your broker, approach to the stock exchange for redressal of your grievances well in time. |
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The complaint is accepted for arbitration only if the complaint is submitted within the one year of the dispute arising. |
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Don't deal with unregistered brokers and unregistered branch offices.
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Don’t forget to inquire about the commission charges of the broker and persons authorized to deal on behalf of the broker. |
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Don't trade based on rumors or 'tips'. |
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Don't allow others to trade on your behalf. |
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Don't believe in the promises of guaranteed returns. |
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Don't be a speculator. |
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Don't forgo obtaining all documents of transactions, in good faith even from people whom you know. |
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Don’t panic while trading. |
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Don't hesitate to approach concerned persons and then the appropriate authorities for assistance in trade related issues. |
