Your friend, Aadil, takes a pill to control his blood pressure. But that medicine cannot treat your cold. Personal finance advice needs the same careful approach before you follow someone else’s example.<\/p>\n
Srikanth Matrubai QPFP\u00ae\ufe0f, founder and CEO of SRIKAVI WEALTH, explained this comparison while speaking to Mint. He warned against investing simply because another person claims impressive returns.<\/p>\n
Also Read | Power of compounding: First crore takes time, then your money blooms<\/a><\/p>\n Your colleague, Ranjana, shows you a screenshot of her portfolio. It shows a 39% return. That can quickly make an investment look attractive. However, that screenshot does not reveal whether the investment suits your circumstances. Matrubai suggested 5 checks to run before investing your savings in any such opportunity.<\/p>\n Understand where your money goes<\/p>\n First, find out what you are buying and how it works. If investing in a company, understand what it produces or sells. For a fund, check where it invests and what kind of assets it holds.<\/p>\n<\/p>\n Matrubai suggests explaining the investment to a Class 10 student without complicated terms. If you cannot do that, reconsider investing until you fully understand it.<\/p>\n \u201cAs Warren Buffett<\/a>, the world\u2019s most successful investor, said, \u2018If you don\u2019t understand, don\u2019t invest\u2019,\u201d Matrubai said.<\/p>\n Avoid copying someone else’s investments<\/p>\n Your friend’s financial situation may be different from yours. They might have inherited property, no loans and nobody depending on their income. You could have a home loan and two young children.<\/p>\n These differences affect how much financial risk each person can handle. An investment suitable for your friend may be unsuitable for you.<\/p>\n Also Read | Debt Avalanche vs Debt Snowball: Which method to choose to clear loans?<\/a>Look beyond yesterday’s returns<\/p>\n Strong past returns can make an investment seem more dependable than it is. However, different investments experience periods of rising and falling prices.<\/p>\n Matrubai cites gold, describing a correction after its January 2026 peak. His broader warning was against entering after much of the rise has already happened.<\/p>\n Ask whether the recommendation relies mainly on earlier gains. Past performance cannot guarantee similar returns in the future.<\/p>\n \u201cEven the supposedly super safe gold<\/a>, too, is going through a correction since hitting a lifetime high in January 2026. Those who entered in January 2026 are still trapped as the juice had already been squeezed out,\u201d he said.<\/p>\n Question the seller’s motive<\/p>\n Consider why someone is trying hard to convince you. They could be looking to sell an investment they no longer want.<\/p>\n Your purchase might help them exit while leaving you exposed to the risk. Matrubai urges investors to avoid opportunities promoted through excessive excitement and publicity.<\/p>\n \u201cRemember, whenever anything is hyped as a Weekend Movie Blockbuster, it is surely an AVOID,\u201d he added.<\/p>\n