5 things investors should be wary of

With the equity markets spiraling northwards, there is a lot of advice doing the rounds on what investors should be doing.

Amidst all the excitement, there is also a dire need for investors to exercise caution in certain aspects related to their investments; we present a checklist for the same.

1. Deviating from your risk-return profile
Each investor has a risk-return profile that remains unchanged, irrespective of market conditions. If as an investor, hybrid instruments like balanced funds and monthly income plans fit into your profile, then stick to them; there is no justification for getting invested in diversified equity funds.

Rising equity markets should not be an excuse for taking on higher risk.

2. Advisors with a hidden agenda
If your mutual fund advisor advises you 'not to book any profits' or to get invested in avenues contrary to your risk-appetite, then he may not have your best interests at heart.

Steer clear of such advisors and their advice. There is a fair chance that financial considerations are overriding his advice. If you have raked in reasonable returns or achieved your objectives, booking a part of your profits would be a prudent move.

3. Succumbing to greed
The temptation to rake in quick profits can be a strong one, especially in times like the present one when