Below are some suggestions on how to become a smarter investor in 2012.
Tip #12 |
Pay off high-interest debt. Paying off
high-interest debt may be your best investment strategy. Few investments pay
off as well as, or with less risk than, eliminating high-interest debt on credit
card or other loans.
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Tip #11 |
Pay yourself first. Regular automatic deductions
from your paycheck or bank account into a savings or investment account will
keep you on track toward your short and long-term financial goals.
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Tip #10 |
Boost your “rainy day” fund. Many experts
recommend keeping about six months of expenses in a federally insured account
to cover sudden unemployment or other emergencies.
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Tip #9 |
Help stop affinity fraud in your community. Affinity
fraud refers to investment scams that prey upon members of identifiable
groups. Learn how you can help protect yourself and your community from the
potentially devastating impact of affinity fraud at http://investor.gov/sites/default/files/Affinity-Fraud.pdf.
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Tip #8 |
Don’t put all your eggs in one basket. Think twice
before investing heavily in shares of your employer’s stock or any individual
investment.
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Tip #7 |
Take advantage of “free money” (if available). In
many employer-sponsored retirement plans, the employer will match some or all
of your contributions. If your employer offers a retirement plan and you do
not contribute enough to get your employer’s match, you are passing up “free
money” for your retirement savings.
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Tip #6 |
Beware of promises of “guaranteed returns.” Promises
of high returns, with little or no risk, are classic warning signs for
fraud. If it sounds too good to be true, it probably is.
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Tip #5 |
Understand the fees you pay to buy, own, and sell your
investments. Investment costs shouldn’t take you by surprise. Fees and
expenses vary from product to product and can take a huge bite out of your
returns. Even small differences in investment costs can translate into large
differences in returns over time.
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Tip #4 |
Teach your children about good financial habits. Recent
research suggests that direct teaching by parents is an important predictor
of a young person’s future financial success.
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Tip #3 |
Research investments before handing over any money. Smart
investors always check
whether an investment is registered with the SEC by using the SEC’s EDGAR database or
contacting the SEC’s toll-free investor assistance line at (800) 732-0330.
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Tip #2 |
Check the background of your investment professional.
Many investors do not know that you can check the background of a broker or investment
adviser. It’s free and easy – and a key step for avoiding investment
fraud.
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Tip #1 |
Visit Investor.gov before making your next investment
decision. Created by the U.S. Securities and Exchange Commission,
Investor.gov is a free, easy to use web site with objective information on
investing wisely and avoiding fraud.
You can learn about financial
products, research investment professionals, and find more information about
the tips above.
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