Few things a retail investor can do (especially for debt instruments)
- Try and understand the product, if returns are more than safe returns (SBI FD / Gsec) assume there is risk and prepare for that
- Implement some type of position control / diversification. Instead of investing in single company NCD or AT1 bonds, spread out with no position more than 5-10%. This way if one or two company goes down, you do not loose everything.
- beware of what is going on and Run at first sign of trouble. I agree that few years back nobody could have doubted DHFL … but trouble were brewing for long time. By early 2019 it was know DHFL was in trouble, at tat time there was chance to sell DHFL NCD for 10-20% haircut and bail out. That way losses could have been limited. Same with Yes bank
Having said all this, I saw lot of retailers continue buying DHFL / yes bank stocks hoping for miracles even after all skeleton were out.
At least retailers can stop doing that.