DOs

• Before investing ensure that the entity is registered with SEBI.
• Read the offer document of the scheme especially the risk factors carefully.
• Check the viability of the project.
• Check and verify the background/expertise of the promoters.
• Ensure clear and marketable title of the property/assets of the entity.
• Ensure that the Collective Investment Management Company has the necessaryinfrastructure to carry out the scheme.
• Check the credit rating of the scheme and tenure of the rating.
• Check for the appraisal of the scheme and read the brief appraisal report.
• Read carefully the objects of the scheme.
• Check for the promise vis-a-vis performance of the earlier schemes in the offerdocument.
• Ensure that CIMC furnishes a copy of the Annual Report within two months fromthe closure of the financial year.
• Note that SEBI cannot guarantee or undertake the repayment of money to theinvestors. 

DON’Ts

• Do not invest in any CIS entity not having SEBI registration.
• Do not get carried away by indicative returns.
• Do not invest based on market rumours.

Related posts:

1. DOs and DONTs : Investing in Mutual Funds
2. DOs and DONTs : Issue of Securities
3. DOs and DONTs : Dealing with Securities
4. DOs and DONTs : Investing in Derivatives
5. DOs and DONTs : Buyback of Securities