Article taken from investor.gov (July 1, 2021)
No matter your age, we can all learn something about investing.
When it comes to creating a plan to help you meet your financial goals and investing for a strong financial future, everyone can learn something – no matter your age or generation. Sharing knowledge and having a conversation with your family members can make talking about finances more comfortable. Although you and your family members may have various kinds of knowledge when it comes to investing and recognizing scams, you can learn from each other. Talking about money with your family and even your friends could encourage them to become more interested in saving and investing.
A good way to get started is to focus on protecting yourself against fraud. Here are 3 easy steps:
Step 1. Monitor your investment accounts.
Monitor your investment accounts regularly for any suspicious activity. You should confirm that you authorized all the transactions that appear in your investment account statements and trade confirmations. Also, look out for any changes to your account information that you do not recognize (for example, a change to your address, phone number, e-mail address, account number, or bank information).
Step 2. Conduct a background check on investment professionals.
Spend some time checking out the person offering the investment before you invest – even if you already know the person socially. Always find out whether the securities salespeople who contact you are licensed to sell securities in your state and whether they or their firms have had run-ins with regulators or other investors. You can check out the disciplinary history of brokers and advisers for free using the SEC’s and FINRA’s online databases, including Investor.gov’s “Check Out Your Investment Professional” search tool. Your state securities regulator may have additional information.
Step 3. Avoid unsolicited investment pitches‒they could be scams.
Be especially careful if you receive an unsolicited pitch to invest in a company, or see it praised online, but can’t find current financial information about it from independent sources. It could be a “pump and dump” scheme. In this type of scam, promoters first try to boost the price of a stock with false or misleading statements about the company. Once the stock price has been pumped up, fraudsters seek to profit by selling their own holdings of the stock, dumping shares into the market. Be wary if someone recommends foreign or “off-shore” investments. If something goes wrong, it’s harder to find out what happened and it may be virtually impossible to get your money back.
Never Stop Learning Tip: Educate yourself about how to spot and avoid fraud. Don’t be afraid to ask questions, and get help when you need it.
Now that you know what to look out for to keep your money safe, are you ready to learn more about investing?
Are you new to investing? If you’re just starting out in your career and you’re looking for information to help you get started, check out our Roadmap to Saving and Investing content. Most people get started by investing in tax-advantaged accounts, such as 401(k) plans, Individual Retirement Accounts (IRAs), and Roth IRAs.
Are you already investing? A lot of investors are surprised to learn how much fees can impact their returns. Do you know how much you’re paying in fees? Understanding fees is a good next step for those already investing. Many investors find that index funds can be a low-cost, tax-efficient, and diversified way to invest.
Do you consider yourself a seasoned investor? We can all learn something when it comes to investing! For example, as you age, it might be helpful to prepare for the possibility of future illness or diminished capacity by talking to family or friends and getting your finances organized.
Never Stop Learning Tip: Subscribe to Investor.gov’s monthly investing quizzes, which always contain a few questions on investment fraud. Take the quiz every month to stay sharp. You can subscribe to receive the quizzes through the “Sign up for Investor Updates” box at the bottom of this page.
