No matter if you invest your money for the first time or have been investing for many years: there are some basic do’s and don’ts you should always consider before you commit your money to an investment.
DO
Make sure the firm you are dealing with is authorised to provide investment services by an EU regulator;
think of what you would like to achieve with your investment to get a better idea of which financial product or service fulfils your needs
shop around to get a better overview on the offers by financial advisers working for a specific firm and independent ones, and on suitable financial products for your needs and their costs;
make sure you read all documents carefully. If you don’t understand how the financial product basically works and how it will help you make money, contact a trusted professional financial adviser for help. If you are still confused afterwards, you should think again about investing in this product, as it might not be suitable for you.
spread your investments to reduce risk;
remember that potential greater returns come with greater risk;
bear in mind that past performance is no guarantee of future returns;
find out what charges you may have to pay, and check if there are charges to change the investment or for withdrawing your money early;
check what happens to your investment if you were to die; ask to whom the fees and charges are paid and in return for what;
remember that you may have to pay taxes on any profits you make;
ask whether the firm has arrangements in place to obtain credit or refunds of any foreign taxes, if relevant;
keep all your documents in a safe place and ensure that your next of kin know where they can be found in an emergency;
check your statements to make sure transactions are correct;
make sure you receive an annual statement to better understand how the product in which you invested your money has developed and which charges you had to pay;
complain if you are not happy with the service you receive.
Don’t
Buy or invest in anything you do not understand;
invest in anything that seems too good to be true, for example, products claiming to offer high return opportunities with low or no risk;
rush into a hasty decision when buying an investment;
commit to a long-term investment if you think you will need early access to your money;
make investment decisions based only on the advice of a friend or family member;
be pressurised by firms cold-calling to sell you an investment by phone, face to face or by email. Such attempts usually come from firms, which are not authorised by the regulator to provide investment services. If you invest with such a firm, you run the risk of dealing with a fraudster, and may lose all your money;
buy products or services from firms which put the contractual terms in small print which is difficult to read;
Delay if you believe there is a mistake on your statement. Call your investment firm immediately;
Throw out old statements and receipts with your household rubbish. To avoid identity theft, shred or burn them.
DO
Don’t