SEBI chairman's 5 investment lessons for Indian Army personnel

Securities and Exchange Board of India (SEBI) Chairman Tuhin Kanta Pandey on Tuesday told Indian Army personnel that the discipline they bring to defending the country should extend to their money, distilling his advice into five investment lessons at an investor awareness programme held in Leh for army personnel.

Speaking in Hindi at the event, Pandey noted that Army personnel spend long stretches posted far from their families, sometimes where even a phone call is difficult. “The way you protect the country with complete discipline, courage and readiness, in the same way you must also exercise discipline and caution while investing,” he said (quotes translated from Hindi).

He said that every investment should pass three tests: the money should stay safe, keep growing, and be easy for the family to withdraw in an emergency.

During the speech, SEBI chairman shared several investment and personal finance lessons for army personnel. Here are the five key lessons:

The chairman’s first lesson was diversification, or spreading money across different investments. “First look at what your needs are and how much risk you can take, and instead of investing all your money in one place, invest in different places,” he said.

“Before investing in any product, gather complete information about it and also find out what risk is involved. If you cannot understand a product, do not put your money into it,” Pandey said.

The sooner an investment decision is taken, the better, Pandey said. Small, regular instalments let compounding do the heavy lifting. He pointed to systematic investment plans (SIPs) in mutual funds, where a fixed amount is invested every month by professional fund managers, as a convenient option for soldiers who cannot track markets daily.

Even products that promise a fixed return, such as corporate bonds which commit to paying a fixed rate of interest, carry risk, he said. “If someone is guaranteeing you a profit or promising very high returns, understand that something is definitely wrong,” he said

Citing the old warning: “All that glitters is not gold", SEBI Chairman said unknown tips, social media messages and finfluencer advice should be ignored in favour of SEBI-regulated products.

The chairman also warned that cyber fakes now look real. “Fraudsters will first lure you with a message or a phone call promising very high profits, and then ask you to download an app or transfer money. That app or website will look genuine, but it will be fake,” he said.

SEBI has launched validated UPI handles, the ‘SEBI Check’ tool and a Verified App Label for genuine apps, and investors can lock their trading accounts and mutual fund folios, a feature he said is useful for personnel posted for long periods in remote areas.

5 points to keep in mind

Pandey suggested the army officers to keep the following points in mind:

• Update nominations in demat account and mutual fund folios

• Key KYC, mobile number, email and bank details updated

• Keep a list of investments, account or folio details

• Keep holding statements in DigiLocker and add nominee to DigiLocker also.

• Inform you life partner or nominee about when you have kept your investment records and whom they can contact in case of need.

The SEBI chairman closed the speech with a five-word mantra: “Plan, Diversify, Verify, Nominate, Stay invested.”

“A little preparation today takes care of a big responsibility tomorrow,” he said, asking every soldier to speak to their family about their investments and nominations after the event.