Look Up a Broker or Securities Firm Before Investing
As the subprime crisis continues to impact our equity markets, many investors see the glass half full and consider this a great buying opportunity. However, some investors are getting out of the market as they fear things will only get worse. Regardless of your risk tolerance and buying strategies, now more than ever should you be cautious before getting into any new investments. The fear of a possible recession runs parallel with panicked investors and scamsters working overtime trying take your fear and capitalize on it. Milk Your Money has come up with a few things you should do before you make any big investment decisions.
Check Your Broker
The Financial Industry Regulatory Authority (FINRA) – the largest non-governmental regulator for all securities firms doing business in the United States – has an easy to use tool that allows you to do a background check your on your current or future broker and financial institutions. This simple two minute process can save you from losing your nest egg and allows you to invest with confidence. FINRA’s report will tell you if your broker is currently suspended or has recent enforcement actions taken against them etc.
If it Sounds too Good to be True, it is.
You have heard this over and over again; well here it is one more time. If an investment is pitched to you and sounds too good to be true, it most likely is. Use your common sense when you are investing and in our opinion great investment products will sell themselves with their record and satisfied customers, not by aggressive sales people. Remember, growing wealth is not going to come overnight with a risky investment, rather from making smart everyday money decisions and investing with the goal of long term growth.
Leave New Investment Products Alone
The innovation of the markets is amazing and new products are continuously being offered to the public. In our opinion, it’s best to leave these new products alone and wait for them to acquire a track record. Patience like this, gives you time to truly understand what the product actually does and whether or not it fits into your investing strategy. We are willing to bet that you are unlikely to be the guinea pig that will take medication for a medical breakthrough. Why, because of the fear of undetected side affects; carry this thought process with you when investing.
Call Your State Regulator
Whichever state you live in, you have a regulator working to protect you from investment scams and frauds. Before reaching into your pocket, call your regulator and see if they and the product they are selling are registered. Obviously if they are not, report them and steer clear. You can get the contact information of your securities regulator here. $
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