FINRA – Essential Investor Tips for 2019
The Financial Industry Regulatory Authority (FINRA) just released an Investor Alert on essential investor tips for 2019.
- Begin your retirement planning. If you continue to wait until you have enough money to save for retirement, you may never save a dime. Talk to your employer or human resources department about retirement plans such as a 401(k) plan now. Another great option is to open an Individual Retirement Account (IRA). There are many options you can find through various financial services firm.
- Start a “rainy day” fund in case of emergencies. According to the FINRA Foundation’s National Financial Capability Study, about 34 percent of respondents said they probably or certainly could not come up with $2,000 in an emergency. That can make a scary situation worse, since many people tend to take on debt to pay for emergencies such as car repairs or hospital bills.
- Understand your investments. It’s important to know what the pros and cons are for each investment product you own. For example, stocks tend to return more over the long term than bonds, but stocks as an asset class are also more volatile than bonds (a potential con, especially if you need the money relatively soon or when the market moves against you). It could be problematic if you are over-concentrated in one area. For instance, you fail to understand costs like surrender charges in variable annuities, or if you hold too much of an illiquid investment like a non-traded REIT.
- Diversify your investments. Learn how to diversify your portfolio so that you protect yourself if one or more of your investments performs poorly. When you diversify, you are spreading out the risk in your investments. You can diversify both among and within different asset classes. Diversifying among assets classes typically involves holding a mix of stocks, bonds and cash. Diversifying within an asset class means dividing the money you’ve allocated to a particular asset class among various categories of investments that belong to that asset class. For example, if you own stocks, you can diversify within that asset class by owning stocks of companies from different sectors.
- Vet your financial advisor. BrokerCheck®, a free online tool provided by FINRA, allows you to easily access background information about brokers, brokerage firms and other investment professionals. It’s smart to regularly check out both the person and the firm managing your money. With FINRA BrokerCheck, you can quickly check your financial advisor’s work history, qualifications, state licenses as well as, any regulatory actions, violations or complaints made against them. If the advisor or firm are not registered with FINRA BrokerCheck, this could be a warning sign that you are taking unnecessary risks with your money.
- Discuss new investments before buying. Before you invest in a hot new tip, check in with a registered investment professional, seasoned investor or a CPA. It’s also prudent to run any new investment by your spouse, significant other or a trusted friend or family member known for good judgment. Further, if you research your investment s online, make sure the source is credible. Websites and investment information can often be misleading
- Be wary of cold calls. It is prudent to pause before making investment decision on an unsolicited offer. Even if it is a legitimate investment, spontaneous decisions are not a great idea when it comes to investing. When you are on the spot, your emotions might not be in check, and your judgment can be clouded. In fact, fraudsters often try to trigger such emotions to get individuals to fall for their scam. You can always hang up the phone. If it turns out to be a promising opportunity, it will be there when you are ready to invest, and if it’s not, you saved yourself a hassle and a potential financial loss.
- Consider your risk tolerance. When it comes to investing, often the rule of thumb is the greater the risk, the higher the possible returns. For example, a bond that offers a higher yield is likely to have a lower credit rating or other qualities that compel the issuer to offer a higher return to compensate you for the added risk you are taking. Make sure your investments align with your personal risk tolerance.
- Be aware of the risks of fraud. Older investors, particularly, single seniors are often being exploited by scammers. If you worry that you or someone you know is being targeted, you can reach out to FINRA’s free senior helpline for help at 1-844-57-HELPS (4-3577). Also, consider adding a trusted contact to your account, someone you trust who can work with your investment professional to help keep your account safe.
This information on essential investor tips for 2019 is publicly available on FINRA’s website and provided to you by The White Law Group.
If you have concerns about your investments, the securities attorneys at The White Law Group may be able to help you. For a free consultation please call our offices at 888-637-5510.
The White Law Group, LLC is a national securities fraud, securities arbitration, investor protection, and securities regulation/compliance law firm with offices in Chicago, Illinois and Franklin, Tennessee.
For more information on The White Law Group and its representation of investors in FINRA arbitration claims, visit https://www.whitesecuritieslaw.com.
Tags: FINRA attorney, finra investor alert, FINRA lawyer, FINRA tips, Investment tips 2019, securities fraud attorney, securities fraud lawyer Last modified: September 6, 2019