Points to ponder for investors

Investor safety cannot be stressed too much. Like reciting the multiplication tables daily investors need to repeat a few things so that they do not commit mistakes while investing in the stock markets. Here are some do's for general, lay investors.

Always deal with intermediaries registered with Securities and Exchange Board of India. This includes brokers, sub-brokers, depository participants among others. So leave the temptation to allow a friend of yours, however well-intentioned, to manage your money for you.

If the friend dupes you and runs away you have nobody to blame but yourself. If the broker runs away you can approach the exchanges for redressal.

Keep copies of all investment documentation. This includes application forms, acknowledgement slips, contract notes, allotment advice slips and so on.

To cut the matter short, anything related to your investment should be kept with you so long as you are invested in that instrument. In fact, a good way is to make copies of all documents, even ones sent to companies and the correspondence that you have engaged in with them.

Send important documents by a reliable mode/ registered post to ensure delivery. When sending any letters to companies always send one copy through registered post with an acknowledgement card so that you know that the party has received your misive.

Ensure that you receive contract notes at the end of the day and account statements for every transaction. This is very essential.

File all these contract notes and account statements carefully as you will need it later for tax computation purposes or when the taxman raps you for having evaded taxes.

Then you can show them your losses!

Ensure that you have money before you buy - another way of putting it is do not incur a debt in order to buy shares. Resist the temptation ot borrow on your credit card or even from a neighbour or the broker through whom you are dealing. Use your own disposable income. And do not dip into your kid's piggybank either. If you do not have the money, don't invest. You will get another opportunity soon.

Ensure that you are holding securities before you sell - in other words no short-selling. Even experienced marketmen have been caught in this trap.

There is a heavy price to pay if your call on the market goes wrong and you have to make good the transaction at a loss since you do not have the securities to deliver. Take and give delivery.

Legendary US investor and one of the world's richest men, Warren Buffet, made his fortune by investing, not trading.

Follow-up diligently and promptly - with brokers, companies if your documents do not arrive on time. It is your right as an investor to get these documents in the specified period and learn to exercise that right.

Give clear instruction to your broker or agent or depository participant "" verbal instructions can always be followed by a faxed advice in order to prevent ambiguity later on.

• Deal only with registered intermediaries
• Sell only if you have the underlying securities in hand
• Keep copies of all documents related to a transaction
• Make sure that all documents are received on time and follow up with the companies and intermediaries