Don’t Make This Mistake: Be Sure You Understand ALL Your InvestmentsWednesday, April 3, 2019
One of the biggest mistakes you can make when investing, and something that can make you vulnerable to fraud and broker misconduct, is not understanding each and every investment you make. According to Market Watch, 42% of investors don’t know how their assets are allocated in their portfolios. Do you fall into that percentage?
Understanding Your Investments
Every broker has a duty to thoroughly explain any investment they recommend for a client. What exactly does that include? You should be well-educated on the risks associated with the investment, how the investment fits into your overall portfolio, when and how you’ll earn returns and the costs associated with the investment. Be sure to ask your broker the right questions if this information is not explained to you.
We urge you to do research on your own, too, instead of simply trusting everything your broker says. When it comes down to it, if you can’t easily explain the investment and the business model to a loved one, you don’t fully understand the investment and should not invest. If you don’t understand, you can’t adequately assess the risks and potential returns. You are simply gambling, not investing with open eyes. And that’s definitely not something you want to do with your hard-earned money.
Don’t open yourself up to potential fraud or broker misconduct. If you have a question about an investment, feel free to reach out to the lawyers at ChapmanAlbin.