When investing money, the goal is simple: to make a profit. But achieving that goal can be a lot more complicated. Whether you are interested in higher returns with high risks or lower returns with low risks, there are tips that will help you invest wisely and prevent you from making costly mistakes.
Investigate the Facts
Before investing in anything, know as much as possible about where you are putting your hard-earned money. Confirm that the company is licensed for business in your state by contacting the state securities regulator. Check for complaints against the company, know the amount of time the company has been in business, get familiar with the services and products, and know the history with past investors. Have this information in writing in the form of the most recent quarterly or annual reports.
Allow Room for Risky Investments
Allocate between 5 to 10 percent of your portfolio for choices that have the highest risk. This allows you to have a specific portion of your money set aside in the event that "the next big thing" does not live up to its expectations. This way, you can explore the possibilities of a high return without devastating your overall portfolio.
Do Not Believe Everything You Read
This is especially true for online investments. Most of the time, investments may seem too good to be true, and most of the time they are. Do not believe that people are who they claim to be online. Make sure to keep hard copies of any documentation you have of online investments you are considering. Make sure that you record the date and time you printed the information as well as the URL of the website that is promoting the opportunity; you may need this later. Investigate the firm with the local secretary of state to confirm incorporation and to obtain an annual report on the firm. Check for complaints and go over information with a trusted financial adviser before investing.
Communicate With Your Investment Professional
Prior to picking an investment professional, make sure to ask contenders about their experience and training. Get an idea of what their investment philosophy is and ensure that it matches yours. Find out how much it will cost you to do business with them — if they are paid in commission or by the amount of assets they manage. Make sure that they understand what you are looking for and what you are able and willing to do.
Akeia Dixon is a freelance writer who began her professional writing career in 2009 for various websites. She enjoys writing about natural health topics but also loves to research and write about her findings on any subject. She is currently in school studying psychology and sociology.