Former RBI Governor, Raghuram Rajan, has issued a warning about fraudulent videos circulating on social media, falsely claiming to feature his investment advice.

What Happened: In a LinkedIn post on Monday, Rajan clarified that he does not provide public investment advice, especially regarding individual stocks. He urged people to report these fake videos to the authorities. The economist further emphasised the importance of diversified portfolios over individual stocks or stock options for most investors.

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Rajan’s post reads, “Each individual has their own financial needs and risk appetite. Furthermore, investors are typically better off holding diversified portfolios of bank deposits, bonds, and stocks (through mutual funds and ETFs) rather than buying individual stocks or stock options.”

Why It Matters: The spread of fake investment advice videos can mislead investors, leading to potential financial losses. Rajan’s clarification aims to protect investors from falling prey to such scams. His emphasis on diversified portfolios aligns with conventional wisdom in the investment world, which advocates for a balanced mix of assets to manage risk and returns effectively.

Last week, media reports suggested that a Mumbai-based doctor was duped of ₹7 lakh by fraudsters who employed a deep fake video of India’s richest person, Mukesh Ambani, to promote a fictitious share trading academy.

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Image: Flickr/ World Economic Forum