1. #1

    Join Date
    Aug 2011
    Lahore, Pakistan
    Blog Entries

    Do you buy a financial product or are you made to buy it?

    There are various financial products available in the financial market. Right from equity to mutual fund to insurance, there are products designed to take care your interest and requirements. So insurance is for risk, equity is for capital appreciation and debt products like bonds and bank deposits for stable income. Investors often buy these products from time to time for multiple reasons. But there is an important aspect that investors often tend to ignore but actually should introspect every time when they buy financial products. Am I buying a financial product or am I made to buy it?

    The answer of course can come as a surprise for many investors once they do introspection.

    What does make to buy a product mean? It is simple. Many investors often donít take informed decision. They just get influenced by the brokers, agents or any other intermediary offering a financial product. But this influence is not just direct. There is an indirect influence as well. Newspaper and television advertisements, mailers of financial companies, opinion of so-called experts also act as an influence on investors. So deciding to buy a financial product just because somebody suggested that product to you is not an informed decision. There is a need to do lots of research or seek opinion on the proposed investment. But very few investors do that. It wonít be wrong to say that investors are also responsible for miss-selling that is done to them by the agents.

    Many people make loss by selecting a wring financial product and then repent their entire life. There are losses which are irrecoverable in many cases or the impact of the loss in some is so severe that an investor is never able to overcome that. So what is right course of action to avoid such scenarios in future? It is simple. Make a list of financial products that you have purchased during last few months or years. Find out what triggered your decision to buy that product? Also identify how much time did you spend to buy a financial product? Was it real quick or did you weigh pros and cons of investing in a product? Such kind of simple thought process may help you to make better decision in future. So next time, when you buy a product ensure that you have bought it and nobody has sold it to you.

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