Starting with the newly revised Texas Investor Guide: Strategies for Investing Wisely and Avoiding Financial Fraud, the State Securities Board offers publications and other material to provide investors with the unbiased, straightforward information they need to navigate a complex financial marketplace and avoid financial fraud.
With the continuing decline in pensions and the rise of workplace retirement plans, where it's largely up to the employees to pick their own investors, people have more responsibility than ever for achieving their financial goals.
Yet whether it’s investing for retirement or other financial goals, many investors lack essential knowledge about the principles of investing, the role of stocks and bonds, the stock market, and the value of diversifying one’s assets. Nor do investors consider how badly investment fees damage their returns.
Investors, whether beginning or more experienced, need to understand precisely these topics. And if an investor chooses to seek a financial adviser, they must learn to ask the right questions and do the necessary research to increase the chances of a finding a trusted professional.
The Investor Guide, for example, specifically addresses:
- The damage inflation does to your portfolio, a crucial issue as people live longer in retirement;
- The difference between investing for growth over the long term, as opposed to parking money in risk-free investments;
- The difference in asset classes such as equities, fixed income, cash, and real estate, and how to invest using mutual funds and exchange traded funds; and
- Principles of investing such as managing risk, asset allocation, diversification, and the impact of costs; and
- The hard truth that the higher the investor climbs on the risk ladder, the more likely he or she is to fall off. Only a handful of investments are truly riskless, like federally backed savings accounts, certificates of deposits, and certain government-issued bonds; and
- Individual and workplace retirement accounts; pension plans; and Social Security; and
- Warning signs of fraud; the importance of dealing only with registered brokers and advisers; common frauds and risky investments – including ones that promise too-good-to-true returns – and case studies of Texas investment fraud; and
- Questions to ask to help you find a broker or adviser you can trust and how to weed out the financial professionals who claim an exaggerated or non-existent expertise.