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One of the golden rules that can be generally applied to almost all aspects of our lives is that if you do not understand it, don’t jump into it. And this rule applies to the stock market as well; never ever invest in a product that you do not fully comprehend. If you were to do a little bit of research, this will save you loads of hassle and you can do this by consulting information sources for example financial and business publications. Even your local library can be a good source of information such as topics that have to do with the fundamentals of investing as well as basic financial terminology. 

Another valuable source of information is the annual reports of companies, so ask your sales representative for the prospectus, offering circular, or the most recent ones so that you can do your own research. Once you have them, do not just chuck them aside and use them for recycling. Read them and fully understand the annual reports, feel free to talk to your sales representatives especially if you have any inquiries. Remember, after all it is your money so you have the right to seek the information you need for your investments.

If you still have doubts and want clarification about certain matters, do what patients do when they also want further information – get a second opinion. Unlike the patients you do not go to a doctor instead you can always check with a trusted business advisor, an accountant or even another brokerage firm. The one thing that you have to remember is that you must be able to trust them with your information, as they need this information such as your current financial status, your income and so on to get an exact estimate for them to advise you accordingly.

A good habit to take up is to keep all the information that you have received from the conversations that you have had with your sales representative to the copies of forms that you have signed. This is for your own piece of mind and security just in case any form of disputes arises in the future; at least you have the proof to back up your statement.
Investing is all about making money, and with that there is some form of risk that is usually involved. Nobody invests their own money so that they could lose it in the end. Some of the risks that you need to be aware of are:

• When you have had past success in the past when investing and we should all learn from the past. However, that does not mean that you will achieve the same degree of success in the future. Do not be over-confident when you are investing.
• Greater risk is involved when you invest in companies with little or no operating history or no published information such as annual reports.
• Another thing to take into consideration is that the higher the expected rate of return, the greater the risk that is involved. It depends on the market’s development, where you could lose some or all of your initial investments. Other investments such as options could make you lose more of your investment. So before you make any investments ask your sales representative whether there is any market for this type of investment.
• Sometimes your investments may be subjected to reorganizations, tender offers, mergers or even third party actions, either way they can affect the value of your ownership interest. So it is vital that you pay extra attention to the information that is sent to you or from the public announcements. Again before you take any actions, make sure that you fully understand what you are getting yourself into. If you have inquires make sure you ask your sales representative about it, or you just might regret it as it involves complex investment decisions. Failure to do so may have detrimental effects on your investment such as partial or two-tier tender offers.
• There are even some investments that cannot be converted to cash or be sold. Another is to check whether there will be any penalty or charge for investments that you want to sell quickly or before they reach their maturity dates.