Basic Investment Tips

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Some basic tips on investing

• Educate yourself: Contact organizations that offer investment basics. Regional chapters of the NAIC, the AARP, and the American Association of Individual Investors hold investment workshops for consumers of all ages. They will expose you to the financial terms and standards you need to understand when considering buying stocks, bonds or certificates of deposit (CDs).
•Go to school. Consider taking a community college or university extension course on investing. Such courses offer tips on the best magazines and Web sites to raise your confidence in investing.

• Ask around: If you do consult a financial adviser, investigate different planners before subscribing to a particular investment plan. Many financial planners meet with clients for free, but may push certain investment products that do not suit your investment style.

• Think about how "risk averse" you are: If you don't have much time -- or the stomach -- to monitor your investments in individual stocks, consider other types of investing, such as mutual funds. It's a less risky way of getting involved in the stock market, and provides much more stable returns. You can request performance information about particular funds on the Internet or by requesting a prospectus from the company. As many people have lost money on the market as have gained wealth, so seniors should proceed cautiously.

• Investigate your investment adviser: Make sure your adviser doesn't have any disciplinary actions against him or her. Ask to see what's called a "Form ADV," which lists education and investment strategies. You can check out a dealer by contacting the Financial Industry Regulatory Authority (FINRA) at finra.org or 800/289-9999 or the North American Securities Administrators Association (NASAA) at 202/737-0900.

• Read agreements for investment accounts carefully: They usually spell out how much risk you will take, how investments will be paid for, who makes the decisions, and how disputes are resolved. Make sure you don't budget more for investing than you can spare from your monthly pension.

• Ask for a commission schedule: This outlines how much commission you will pay. Never make out a check to an individual broker.

• Report abuses: FINRA maintains an Investor Complaint Center on its web page http://www.finra.org/complaint or you can call them at 240/386-4357. The Securities Investor Protection Corp. (SIPC) offers general investment advice and helps consumers with investment problems. Contact them at 202/371-8300.

Source: Seniors and investing

"If you have knowledge, let others light their candles at it."
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