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Points to keep in mind before signing a document

Before making any crucial financial decision it’s very important to keep certain pointers in mind and when in doubt an investor should ask questions.

Most of us think that asking questions portray lack of knowledge and ignorance, but what it shows in curiousness and the eagerness to learn.

How many times have we stopped ourselves from asking a question on investments? How many times have we just signed an investment document because we are told to? How many times have we signed without knowing what the document is exactly about? It must ring a bell.

So, let’s pledge to ask – about everything we don’t know, about anything that seems ambiguous and about things we wish to learn about. Because asking scrapes off the first layer of unawareness.

So, before you make any investment or sign on any financial document, make sure you ask yourself these questions:

  1. What is the goal I am investing for?

    Amidst the various goals you need to plan for, you must decide which investment avenue is ideal for a particular goal. Ambiguous investments would fulfil nothing. Each goal that you wish to fund must be planned for with the investment that mirrors it in the most ideal way. For example, if your goal is short term, you could invest in fixed income funds and if your goal is long term, equity funds. But you must know what your objective is.

  2. What are the features and benefits of my investment?

    Knowing why you’re investing isn’t enough. Once the goal is identified, you need to pick the fund that matches it. The catch here is that there might be several investment options that could come close to matching the goal, but they might still differ on several grounds. The key to picking one of the several options – ask. Does the investment tenure match your requirement? Can you liquidate the investment as needed? What are options through which you could invest? Does it match your risk capacity? In the answers to these questions, you could find the one that most closely mirrors your investment objective and choose that.

  3. Should I combine multiple goals in one investment?

    While some of your goals might be similar in nature, one investment instrument must not be entrusted with multiple goals. An investment, in isolation would require time to yield the desired result in case it is a long-term investment. In case you wish to withdraw part of that investment, to fund another goal halfway through, it could hamper the overall return potential of the instrument.

    Hence, it is ideal to have dedicated investments to plan for individual goals to ensure maximum effectiveness.

  4. What could the possible downsides to my investments be?

    A very important point in investing is to take due notice of the possible downsides of a particular financial instrument. For example, while investing in the stock market is often looked at a way of making big and quick money, it carries a huge risk due to the volatile nature of the market. Alternatively, one could consider investing in the stock market through mutual funds which are regulated, handled by professionals, have funds that cater to different investors’ risk profiles and provide diversification of risk. Hence, knowing the downsides of an investment is an important fact as knowing the benefits is.

  5. What must I do after making the investment?

    While making the investment is the first step, tracking it is the next. And tracking investments again can be done with some basic questions - On periodic intervals, ask if your objective is being met? Is the value of your investment deteriorating? These are questions that will show you where your investment stands, so that tomorrow when you choose to fund your dream, your investment return will help you. It is important that you review and re-assess your investments at periodic intervals and if necessary, take steps to correct them.

These 5 questions will help to keep you in track with your finances and help make sure neither you, nor your investment goes astray. Further, it is always advisable to consult a financial advisor to understand various investment options best suited to you and to understand the tax and financial implications of them.

An Investor Education & Awareness Initiative

Investors should deal only with Registered Mutual Funds, to be verified on SEBI website under Intermediaries/Market Infrastructure Institutions”. Refer to for details on completing a one-time KYC (Know Your Customer) process, change of details like address, phone number etc. and change of bank details, etc. For complaints redressal, either visit or SEBI’s website Investors may refer to the section on ‘Investor Education’ on the website of Mutual Fund for the details on all ‘Investor Education’ on the website of Mutual Fund for the details on all ‘Investor Education and Awareness Initiatives’ undertaken by the AMC.

Disclaimer: This document has been prepared by HSBC Asset Management (India) Private Limited for information purposes only and should not be construed as i) an offer or recommendation to buy or sell securities referred to herein or any of the funds of HSBC Mutual Fund: or ii) an investment research or investment advice. Investors should seek personal and independent advice regarding the appropriateness of investing in any of the funds, securities, other investment or investment strategies that may have been discussed or referred herein and should understand that the views regarding future prospects may or may not be realized. This document is intended only for those who access it from within India and approved for distribution in Indian jurisdiction only. Distribution of this document to anyone (including investors, prospective investors or distributors) who are located outside India or foreign nationals residing in India, is strictly prohibited.

Mutual Fund investments are subject to market risks, read all scheme related documents carefully.