Investment tips: Sebi cautions investors

The Securities and Exchange Board of India (Sebi) on Wednesday cautioned investors against entities that offer investment advice not backed by any reasonable basis or those that appear to be misguiding.

The market regulator has advised investors to deal with registered intermediaries and not get carried away by those promising unrealistic gains. The warning comes in the wake of a large number of advertisements promising investors windfall gains only on the basis of "tips".

Most of these entities promise guaranteed gains in excess of 500 per cent, apart from daily intra-day tips and also derivative strategies. Industry players said the number of unsolicited SMS have also registered a rise especially when markets have been on a downslide. In a release issued on Wednesday, Sebi said it has observed a proliferation of websites that offer investment advice to investors.

"Investors should realise that when they follow such advice they are exposing themselves to undue risk in using unconfirmed information," the release said.