Last time we discussed the basics for deciding what the best investment fit is for you and your objectives for investing. The following article will help guide your process for establishing an investment option. It is now time to visit a registered financial advisor/broker.
The first question that you must ask yourself is “which investment product(s) should I use?” Warren Buffet, famous philanthropist and one of the world’s richest men always says “Don’t put all your eggs in one basket” and he is indeed right. We recommend using a multi-faceted approach to investing so that if something goes wrong with one product, you don’t lose all of your money.
The three major types of investment products which the TTSEC regulates and which you can consider are:
Here is a simplified explanation of these investment products:
Refers to the ownership of a corporation represented by shares. Essentially you become a part owner of the business. This entitles you to vote at the shareholders’ meeting and allows you to receive any profits that the company allocates to its owners. These profits are referred to as dividends. Stocks are volatile. That is, they fluctuate in value on a daily basis. When you buy a stock, you aren’t guaranteed anything. Many stocks don’t even pay dividends, in which case, the only way that you can make money is if the stock increases in value.
A mutual fund is a professionally managed collective investment scheme that pools money from many investors to purchase a diverse mix of securities. It is a collection of stocks and bonds and each investor owns shares or units, which represent a portion of the holdings of the fund. Theoretically, you should get a better return by giving your money to a professional than if you were to choose investments yourself. Ensure the broker-dealer is registered with the Trinidad and Tobago Securities and Exchange Commission (TTSEC).
The types of securities that a particular fund invests in are identified for the benefit of investors in the fund’s prospectus (description of the securities), which is a legal document, required by and filed with the TTSEC.
Visit the TTSEC website at ttsec.org.tt to view the full list of registered investment advisors.
Before confirming any investment decision you should also undertake these steps:
Obtain written documents detailing the nature of the investment;
Investing is not as difficult as some may make it appear: investing is actually a wonderful way to make your money grow and work for you. So, once you have consulted the information shown above and exercised your rights and responsibilities as an investor, you should have a rewarding investing experience.
The Trinidad and Tobago Securities and Exchange Commission is not an investment adviser nor is it a brokerage house. This article is intended solely to provide you with the information you need to make sound investment decisions and to ensure that you are familiar with and understand your rights and responsibilities as a consumer of financial services.
Before investing, educate and empower yourself!
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