SEC Investor Bulletin: Ten Things You Should Know about Investing
The SEC Office of Investor Education and Advocacy issued an investor bulletin to provide investors with basic information to help them make informed financial decisions and avoid common scams. The bulletin was composed of ten points:
- checking the background of an investment professional is easy and free through public disclosure websites, including Investment Adviser Public Disclosure and BrokerCheck;
- it can be costly to ignore the fees associated with buying, owning and selling an investment product;
- diversification can help reduce the overall risk of an investment portfolio;
- promises of high returns, with little or no associated risk, are classic warning signs of fraud;
- any offer or sale of securities must be either registered with the SEC or exempt from registration; otherwise, it is illegal;
- it can be risky to invest heavily in shares of any individual stock;
- some investments provide tax advantages;
- mutual funds, like other investments, are not guaranteed or insured by the FDIC or any other government agency;
- the key to avoiding investment fraud, including scams that target specific groups, is using independent information to evaluate financial opportunities; and
- unbiased resources are available to help individuals make informed investing decisions.
See: SEC Investor Bulletin.