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Things You Should Know About Investing from the SEC

Following are a few things the SEC wants investors to know:

“Checking the background of an investment professional is easy and free. Details on an investment professional’s background and qualifications are available through the SEC’s 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.

It can be costly to ignore the fees associated with buying, owning, and selling an investment product. Expenses vary from product to product, and even small differences in these costs can translate into large differences in earnings over time. An investment with high costs must perform better than a low-cost investment to generate the same returns for you. In addition, some products are designed to be long-term investments. If you need your money early, you may need to pay substantial surrender fees.

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.

It can be risky to invest heavily in shares of any individual stock. In particular, you should think twice before investing heavily in shares of your employer’s stock. If the value of your employer’s shares declines significantly, or the company goes bankrupt, you may lose money and there’s a chance you might lose your job, too.

The key to avoiding investment fraud, including scams that target specific groups, is using independent information to evaluate financial opportunities. We see too many investors who might have avoided trouble and losses if they had asked questions from the start and verified the answers with sources outside of their family, community, or group.”

For the full list of Ten Things You Should Know About Investing, click here: Ten Things You Should Know About Investing


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