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The Finance Insider

Monday, May 20, 2013

Following a recent scam involving, Kolkata-based Sharada Group, the reputation of the entire investment industry has been tainted. So much so that Members of Parliament (MPs) are pressing for a blanket ban on schemes that offer unrealistically high returns. This scam is an important lesson for all of us. When someone offers high rate of return and that too guaranteed, ask till you are fully satisfied about the possibility. High rate of return is possible only when there is a high degree of uncertainty. Certainty of returns can only offer low rates of return comparable to the return on fixed deposits of banks. Otherwise, an investor who gets lured by high return on investment often puts the return of his investment in great danger. What should one do as an investor? Managing our investments is not just our need, it is also our responsibility. If one understands the role of investments in one's life, the focus automatically gets diverted on the life-time needs of money a nd all the short-cuts are forgotten.

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