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10 TIPS: Avoiding Investment Mistakes
Resist high pressure sales tactics. Don’t make a decision at the first meeting. Take your time and do your homework. Don’t be afraid to say “no” or ask to be put on the firm’s “do not call” list. Call the Federal Trade Commission at (888) 382-1222 and include your phone number in the National Do Not Call Registry.
Get outside help. Older women are more likely to be the target of financial abuse. Get help from a knowledgeable and trusted friend, family member, attorney or CPA. If you don’t understand the investment, don’t make it.
Ask questions. Ask what licenses the salesperson has. Get copies of all documents you signed and all information shown to you. Never sign blank or incomplete documents.
Checkout brokers and advisors. Make sure the salesperson is properly licensed and doesn’t have a history of complaints or violations. Click here* to check your broker/advisor online or call the FINRA BrokerCheck hotline at (800) 289-9999. Also, check with your state securities administrator*.
Take notes. Keep detailed records of all meetings and conversations regarding your investments. They may come in handy if trouble arises.
Be realistic about your financial needs. You’ve worked long and hard to build your nest egg. Don’t speculate or gamble it away. Focus on your actual financial needs and avoid taking unnecessary financial risk.
Put your investment goals in writing. Carefully review the “investment objectives” and “risk tolerance” sections in your brokerage account agreement. If you are a conservative investor and need income from your investments, your primary objective should be “income” rather than “growth.” Avoid descriptions such as “aggressive” and “speculation.”
Regularly review and update your investment objectives and financial situation. As your financial situation changes, notify your financial advisor. Make sure any changes in your investment objectives or risk tolerance are verified in writing.
Monitor your investments. Don’t be overly trusting. Read everything sent to you. If something doesn’t seem right, contact the branch manager. Take notes of your discussions. If there is a problem, don’t hesitate to act. See Tip #10.
Report fraud or abuse. Don’t let fear or embarrassment stop you from complaining. Report abuse to your state securities administrator*. Consult with an attorney to discuss your options, including whether you may be able to recover your investment losses.