‘Diversified investment strategy can minimise risk, cannot completely eliminate it’: Corporate Affairs Ministry

The ministry also said that investors should keep reviewing their financial plans to align with their financial goals.

“#Diversification is about spreading your investments across different assets to reduce risk, not eliminating it entirely. Stay informed and make smart investment decisions,” according to a social media message on X (formerly Twitter) by Investor Education and Protection Fund Authority (IEPFA), which was retweeted by the Finance Ministry.

Reality Check!#Diversification is about spreading your investments across different assets to reduce risk, not eliminating it entirely. Stay informed and make smart investment decisions.#FinancialAwareness #FinancialWellbeing pic.twitter.com/IyezBHGRKO

— IEPFA (Investor Education and Protection Fund) (@authorityiepf) March 28, 2024

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The message said a diversified investment strategy can mitigate certain risks, it cannot completely eliminate the potential for negative returns.

Another tweet which was reposted by the Finance Ministry said that investors should review their financial plan to ensure it aligns with their goals and adjust as needed. As part of financial awareness and finance wellbeing, investors should regularly educate themselves about personal finance concepts and trends.
According to the tweet, the five mantras of personal finance are income, controlled expenditure, savings, investments and protection.

Over the last few weeks, market regulators have issued several advisories for investors amid concerns of a bubble in small and mid-cap stocks. Stocks of small companies listed on the exchanges have started to show signs of becoming bubbles which, upon bursting, can badly impact investors — and regulators have sounded the warning bells.

Securities and commodity market regulator Securities and Exchange Board of India (SEBI) had said there is evidence of price manipulation in the initial public offerings (IPOs) and trading in the shares of small and medium enterprises (SMEs), and the apex body of mutual funds (MFs), the Association of Mutual Funds of India (AMFI), last month asked fund managers to act proactively to protect the interests of investors.

Investor Education and Protection Fund Authority (IEPFA) was established in September 2016 by the government for the administration of Investor Education and Protection Fund.

The authority is also entrusted with the responsibility of making refunds of shares, unclaimed dividends, matured deposits/debentures etc to investors and to promote awareness among investors.