Practices

Last updated: April 13, 2016

Educate Yourself Before You Invest

"An investment in knowledge pays the best interest." Those words, penned by Benjamin Franklin, are valuable for all life, and no less for investing. Here is an ounce of prevention: 3 steps you can take to make sure that your investing is on the right track.

1. Set Goals, Have a Plan, and Find Good Help

One can’t go around investing aimlessly. To be a good investor, you need to have a plan, set goals, and find good help. You could have a short term goal, like buying a house within a few years; or maybe you would like to save for retirement or your children’s college in the distant future. Once your goals are in place, decide on a financial plan that will best achieve those goals. There are many different financial advisers that can help you along the way. Remember to check on your goals and plan from time to time to keep yourself on track.

2. Educate Yourself

Despite having a good financial adviser, it is still important to do your own homework. To make wise decisions with your money, make sure you understand the workings of the investment world. Ask questions and find the answers. Do your own research. Websites like KansasMoney.gov are designed to inform you, so take advantage of them. Above all, make financial moves only when you are fully aware of the possible benefits and consequences of your decision. It’s better to have twice as much information as you need (as long as you aren’t overwhelmed) than not enough. As the old carpentry proverb quips: “Measure twice, cut once.”

Know the different types of securities:

Stocks

Bonds

Mutual Funds

Exchange Traded Funds

Target-Date Funds

Certificates of Deposit

3. Track Your Investments

Once you begin making investments, keep a careful eye on them. Make sure your investments continue to align with your goals and plan. If you hire a financial adviser, meet with them regularly to talk about your investments and decide if there need to be any changes.

To learn more:

Investor Bill of Rights

Online Trading

Old, Lost, & Delayed Stock Certificates

Resolving Disputes

Securities Practices to Avoid

Risk

Setting Your Investment Goals

Understanding Disclosure

*The information on this page is credited to IPT and Kiplinger. Their original materials are made available on the Kansas Securities Commissioner's website.