Which is the worst investment advice that you have ever received?

Back in my 20s – when I did not know that I knew nothing about investing (trading I still do not know) I had clients who would seek my advice. Now this advice is kinda addicting. When people ask you give some advice and when it works you start believing you know….then the whole cycle starts!

So I must have done a lot of damage to a lot of portfolios – see some of my own horror stories posted earlier…

Here my question is…’What is the worst advice that you have ever received?’. You can change your name, age, gender…does not matter. Also the adviser could have been in print, a friend, wife, husband, in law, colleague, dentist…need not be an agent. If you add a line or two about why you NOW think that advise was bad, and is that adviser still in touch with you would be nice. Sadly the mainstream media has not done such a story…I wonder why…

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  1. Worst advice given to me: Making me buy LICs Jeevan Shree in 2001 (36000 premium per year for 12 years). If I had invested the same 3000/- in a monthly SIP in HDFC Equity fund, I could have afforded a BMW now :-(.

  2. my worst investement advice was people asking me to do engineering. I had to take it up because i knew nothing about anything else..
    Coming from a rural background with a good +2 score I had to do what everybody else was doing..

    I know its out of context here.. just couldn resist writing it..

  3. In 2004, I have been sold a ULIP (Rs. 10,000 annual premium), with an asset allocation of 50% each in ‘Liquid’ and ‘defensive’ schemes. I have been told that ‘liquid’ means ‘money is readily available’ & ‘defensive’ means ‘you will not incur any loss’. The result, after 7 years now, is that I am yet to recover my principal invested (Rs. 70,000), where as my ‘financial advisor(!)’ has graduated from a second hand Bajaj Chetak to Santro i10!

  4. One guy from the brokerage firm roped me into F&Os. Rosy picture was portrayed that I can earn thousand(s) a day. The lure was somuch that I borrowed money to trade in F&Os. After first three days I realised that it is gambling and addictive. My risk appetite graph was always up on each passing day to reduce loss and ever hopeful of making the kill. The reality dawn after a month into the trading and losing all the borrowed capital. More than losing money, the mental tension was too much to bear.

  5. Once in the 90’s we part sold ITC because going by the foreign brokerage analyst (who I interacted with for another sector) excise duty was going to kill it.
    Media, channels were going overboard how this would be the death bell.
    Luckily,we part sold.
    That was the last time I take anyone’s advice.
    And I stay away from telebision.

  6. “Buy LIC, buy PPF. They are safe investments”. This is when I just started earning at age of 21. If I had started SIP that time, by this time I could have god good corpus. I did not know what seems safe is how badly it is being eaten by Inflation. How I rue !

  7. I have been saddled with a lot of useless endowment policies and whole life plans from LIC of india. I pay a premium of Rs 1.4 lakhs per year as premium for the above insurance policies for a total coverage of Rs 18 lakhs. I will be surrendering
    most of it in six months. I try to educate people about buying term insurance
    policies and not to trust these LIC agents blindly.

  8. LOL. By no stretch of imgaination can I write about mis selling without mentioning LIC. However saying ‘all LIC policies’ is completely exonerating the buyer – who takes no responsibility for the wrong purchase!

    funnily when I asked for ‘where I lost money’ i got a poor response,..’for bad advice’ i have got tons…thanks and keep it coming…!!

  9. could not recollect anything now but this is good discussion.
    ‘We can’t afford to experience each mistake and learn from it’
    This is very good way to learn.

  10. My broker made me buy lokesh machines in Nov,2007. He said that the Big Bull RJ is going to buy/increase his stakes in this company. The price then was 140 and now its 40. I wonder will it even reach that levels ever again ?????????

    Rakesh

  11. I got an advice to buy a ULIP from a so called friend-expert. What did I do…got rid of advice, got rid of friend (so-called) and got rid of ULIPs forver. i hate ULIps for personal reasons: I lost my friend (i dumped him), I realised he was an idiot and I was in no mood to take free financial advises from an idiot friend (most dangerous thing in finance).

  12. With all the investers coming in with tall promises of at least 35% gain in equity markets and least promising national banks sparing just between 6 to 7 %,we the ordinary invester need our each one lakh rupees investment returns (R O I )as follows.No compromise whatsoever.He just needs only 18% interst as his (R O I )
    The total locking period for a mandatory minimum investment of one lakh is for 10 years!
    1. 6% interest calculated at the end of every year be deposited in invester’s saving account on every quarter(3Manths).This will take care of every ones smallest needs of survival
    2. An amount of 2 % every annum may be taken by investment management company,the amount is realized by the invester companies after the above 6% is deposited to invester account.
    3. The remaining amount of 10% then be deposited in a life insurance policy for every invester compulsorily( by this way huge funds can be utilized by govt and all the flow of money can be in the insurance policies)
    Brain Storming and Debate on this scheme is required by experts and investment consultants so that utilizing insurance money for National projects could be reality in future!!!
    Viability,feasibility and profitability of this proposal is open for public discussion
    ARUN BANDI

  13. The worst financial advice i have ever got was from my financial adviser, who was more interested in making his own money and suggesting me to invest in LIC endowment plans and ULIPs. Also he wanted me to invest in some other crap schemes of LIC but i realized with time that in last 4 years since i have become financially independent, i have been fooled badly by him. I now feel that its time to dump my selfish financial adviser and to be more aware of real, simple financial products in market and to start once again more aware.

  14. i was advised by close friends who were also mutual fund distributors to buy many bad performance mf’s.tata ido global,jm basic etc.i went for them because returns were tax free.but i should have done some due diligence and applied my mind,which i try to do now.no agents,advisors for me now on…..

  15. When I started earning at the age of 21, I was advised by a LIC agent ‘friend’ of my father to invest in Jivan Bhima policy of 20 lakhs for 20 years (1 lakh premium per year). Over the next 4 years, as I became a little more financially literate, I realized that the policy is a total rip off with hardly 8% returns over the lifetime. I surrendered the policy (and lost 1.5 lakhs due to early surrender) and started routing that money to SIPs on good mutual funds. I also took a term insurance policy which was way more cost effective and just what I needed.

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