New Year’s Resolutions for Investors in 2021

Investing your money is a great way to grow your wealth, save for retirement, and reach your financial goals.  If you invest in the appropriate products, you can also receive income from investments, build on-pre-tax dollars, or reduce taxable income.

If you do not invest, you miss out on opportunities to increase your wealth.  However, all investments carry risk, and when you invest, you have the potential to lose money.

There are many different types of investments.  Some common types of investments include stocks, bonds, certificates of deposit, mutual funds, money market funds, exchange-traded funds, and annuities.  There are also more complex investment vehicles, such as real estate investment trusts (REITs), unit investment trusts (UITs), hedge funds, commodities, and private placements.

Deciding how to invest your money or retirement savings can be challenging for busy Americans and even intimidating for investors who do not know where to put their hard-earned savings. Investors often turn to financial advisors for advice and recommendations.

Financial professionals must make suitable recommendations that are in the best interest of the investor.  This obligation is mandated by the Securities and Exchange Commission (SEC).  That is why financial advisors and brokerage firms ask investors about their risk tolerance, investment objective, investment experience, and more.

Iorio Altamirano LLP is a securities arbitration law firm based in New York City. We represent investors nationwide who have suffered investment losses as a result of wrongful conduct by financial advisors and brokerage firms.

Whether you invest by yourself or with a financial advisor, below are some New Year resolutions all investors should adopt:

1. If you do not understand an investment, do not invest in it.

Do not invest in securities or investment strategies unless you understand the investment and its risks. This is the best investment advice to protect your wealth while investing.  

2. Research a broker’s background, credentials, and disciplinary history, before investing.

Details on a financial advisor’s background and qualifications are available for free on FINRA’s BrokerCheck website. For individual brokers, the report will show you the brokers’ current and past employment history, both in and outside the brokerage industry, the broker’s licenses, and qualification exams undertaken.  The report also discloses any criminal felonies, investment-related crimes, industry disciplinary actions or investigations, investment-related civil actions, bankruptcy proceedings, judgments and liens, and terminations.

3. Avoid being the victim of investment fraud with these helpful suggestions.

All investors, including sophisticated and savvy investors, can suffer investment losses, or worse, be scammed. Here are some helpful suggestions to avoid being the victim of investment fraud:

  • Ask questions before you invest and do your own independent research.
  • Research before you invest. You can check out many investments by searching the SEC’s EDGAR filing system.
  • Know the salesperson and check out the disciplinary history of brokers and advisors.
  • Be wary of unsolicited offers. That is, be especially careful if you receive a sales pitch that you did not ask for or sought out.
  • Be cautious if the investment sounds too good to be true, the salesperson “guarantees returns,” or you experience high-pressure sales tactics. Be mindful of the following warning signs:
    • High returns with little or no risk.
    • Overly consistent returns.
    • Unregistered investments.
    • Unlicensed sellers.
    • Secretive or complicated strategies.
    • Issues with paperwork.
    • Difficulty receiving payments.

4. Guard against excessive trading in your brokerage account.

Excessive trading occurs when a stockbroker ignores his obligations and makes a large number of trades in a customer’s account, not to benefit the customer but to generate commissions for the broker.  Here are three ways to protect yourself against excessive trading:

  • Review your account documents, including account opening documents. Make sure that your investment objectives and risk tolerance levels are accurately recorded.
  • Regularly review your account statements and trade confirmations for unauthorized trades, high-volume trading activity, and excessive fees or commissions.
  • If you do not understand your account statements or transactions in your accounts, ask questions. It is your money.  If you identify any signs of excessive trading, ask questions, and speak to a branch manager. If you have suffered harm, you should also contact a securities arbitration attorney for a free case evaluation and confidential review of your account.

5. Contact a securities arbitration lawyer if you have been harmed.

If you have suffered investment losses or have otherwise been harmed by investment advice that was not in your best interest, contact a securities arbitration attorney.

Iorio Altamirano LLP is a securities arbitration law firm based in New York City. We are experienced securities arbitration attorneys, and we represent investors nationwide who have suffered investment losses due to wrongful conduct by financial advisors and brokerage firms. We offer a bold approach and aggressively pursue the recovery of investment losses on behalf of our clients. We are investor advocates.

Initiating a securities arbitration can be daunting for any investor, regardless of sophistication and net worth. Investors may also be deterred from filing a securities arbitration claim because of unfamiliarity with the forum or costs involved in pursuing a claim. Iorio Altamirano LLP is here to help.

If you believe that you may have been a victim of securities fraud or other wrongful conduct by your financial advisor or brokerage firm, contact our experienced securities arbitration attorneys for a free case evaluation.

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