What You Should Know About Investing
Whether you’re interested in investing for the first time or whether you’ve been investing for years, the U.S. Securities and Exchange Commission (SEC) has advice on how you can get the most from your investments.
Checking the background of an investment professional is easy and free.
Details on an investment professional’s background and qualifications are available through the Investment Adviser Public Disclosure website and FINRA BrokerCheck. If you have any questions on checking the background of an investment professional, call the SEC’s toll-free investor assistance line at (800) 732-0330.
Diversification can help reduce the overall risk of an investment portfolio.
By picking the right mix of investments, you may be able to limit your losses and reduce the fluctuations of your investment returns without sacrificing too much in potential gains. Some investors find that it is easier to achieve diversification through ownership of mutual funds or exchange-traded funds rather than through ownership of individual stocks or bonds.
Promises of high returns, with little or no associated risk, are classic warning signs for fraud.
Every investment carries some degree of risk and the potential for greater returns comes with greater risk. Ignore so-called “can’t miss” investment opportunities or those promising “guaranteed returns” or, better yet, report them to the SEC.
Some investments provide tax advantages.
For example, employer-sponsored retirement plans and individual retirement accounts generally provide tax advantages for retirement savings, and 529 college savings plans also offer tax benefits. Individuals who are interested in learning about the tax impact of their investment decisions should consult their tax adviser or visit the IRS website.
Active trading and some other very common investing behaviors actually undermine investment performance.
According to researchers, other common investing mistakes include focusing on past performance, favoring investments from your own country, region, state or company, and holding on to losing investments too long and selling winning investments too soon.
Find more tips and advice for keeping your money safe and growing your investments from the SEC’s 13 Things Everyone Should Know About Investing.
We welcome your comments if you are 13 or older, and hope that our conversations here will be polite. You are responsible for the content of your comments.
We do not discriminate against any views, but may delete any of the following:
- violent, obscene, profane, hateful, or racist comments
- comments that threaten or harm the reputation of any person or organization
- advertisements or solicitations of any kind
- comments that suggest or encourage illegal activity
- multiple off-topic posts or repetitive posts that are copied and pasted
- personal information including, but not limited to, e-mail addresses, telephone numbers, mailing addresses, or identification numbers
In short: be nice and add to the discussion. If you continually violate this policy, we may limit your ability to comment in the future. If you have any questions or comments about this policy, please e-mail us.