Investments based on advices/tips is tricky. We can get plenty of it from - Internet, brokers, friends, books.....
Few things to keep in mind about investment advices:
- The advice may be wrong!!
- Differences in investment style, the person who advised may have a different style of investment, stock may be volatile, and adviser may hold it through the price volatility.
- The investment time horizon for the adviser and the investor may not be same. In most of the cases, investment time frame is mentioned in the advice itself, but investor need to hold it for that duration.
- The way investor and adviser respond to news or market fluctuations may be different and it can affect the outcome.
- Chances of adviser acting not in the best interest of the investor.
Getting advice on investment principles and studying about it is good. But we need to be careful about advices on particular stocks. Even a good advice to buy a particular stock may not work the same way for all. Look at the advices as one source of information along with lots of other sources, but do own homework before investing. It's not adviser's money which is at risk!!
