What is secondary market? Dos and don’ts for secondary market

Secondary market refers to the market where the issued shares and bonds/debentures are sold and bought among investors through a broker of a stock exchange.

DOs for investing in the secondary market

  1. Before investing, check the credentials of the company, its management, fundamentals and recent announcements made by them and other disclosures made. The main sources of information are the websites of the exchanges and companies, databases of data vendors, business newspapers and magazines
  2. Adopt trading/investment strategies commensurate with your risk-bearing capacity as all investments carry some risk, the degree of which varies according to the investment strategy adopted
  3. Transact only through SEBI-recognized stock exchanges and deal only through SEBI-registered brokers/sub-brokers
  4. Give clear and unambiguous instructions to your broker/sub-broker/DP
  5. Insist on a contract note for each transaction and verify details in the contract note, immediately on receipt. If in doubt, crosscheck details of your trade available with the details on the exchange’s website

DON’Ts for investing in company fixed deposits schemes

  1. Don’t invest all or substantial part of your savings in Fixed Deposits
  2. Don’t get lured by high-interest rates
  3. Don’t forget to check on the track record of the company
  4. Don’t invest in companies that care little about investor services
  5. Don’t hesitate to seek regulator’s assistance for any grievance