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May 21st, 2014

Questions you should ask about your Investments


What you need to know as an investor

I have read about the benefits of investing but what questions should I ask before I part with my hard-earned cash?

It doesn’t matter if you are a beginner or have been investing for many years, it’s never too early or too late to start asking questions.  Arbitrary investing may not be wise because you need to be armed with the proper information to guide your investment decisions. That’s the best advice we can give you about how to invest wisely.

The first step to successful investing is figuring out your goals and risk tolerance – either on your own or with the help of a financial professional.  If you get the facts and follow through with an intelligent plan, you should be able to gain financial security over the years and enjoy the benefits of managing your money.

We encourage you to thoroughly evaluate the background of any institution with whom you intend to do business—before you hand over your hard-earned cash. Is management experienced? Has management been successful in the past? What is their investment strategy? What type of securities does the investment hold?

With this in mind and investment goals intact, it is important to know how your investments are going to make money – whether it is interest, dividends or capital gains so that you understand how it operates and can monitor its performance. More significantly, please note that there are inherent risks associated with all investments. What is your personal risk tolerance?   In determining which types of investments may be appropriate, an important consideration is your time horizon. Shortened time horizons generally reduce a person’s tolerance for risk, necessitating a shift toward more conservative investments.

What are your goals? Are you looking for safety, income or growth from this investment? Or both growth and income?  Knowing this will determine your asset allocation of your portfolio and set the tone for your objectives which can be long-term or short term.

You may also want to consider whether the investment product is registered with the SEC (Securities and Exchange Commission).  The SEC is meant to provide protection to investors from unfair, improper or fraudulent practices, foster fair and efficient securities markets and educate investors, so any product offered to investors it would be in your best interest to check the SEC register.

Seeking financial advice is advisable and it is recommended that you do so from professional investment managers with a good track record and a history of performance. At the Unit Trust Corporation, we uphold the pillars of safety, strength and stability as crucial to our investment philosophy, operating under the governance of the Trinidad and Tobago Securities Exchange Commission and the 1981 Trinidad and Tobago Unit Trust Corporation Act.

A good financial professional will welcome your questions, no matter how basic. Financial professionals know that an educated client is an asset, not a liability. They would rather answer your questions before you invest and quell your anxiety about the risks and rewards of investing, than only being concerned about what your salary looks like.

Tips for investors:

  • Do your homework

Obtain and analyze as much information as possible before making your investment decisions. This will alert you of any problems a company may have, or what to expect from your investment. Before you make any investing decision, sit down and take an honest look at your entire financial situation.

  • Seek professional advice

A good professional will be willing and able to attend to your needs and thoroughly explain every aspect of the investment to you.
 It’s almost impossible to ask a stupid question about how you are investing your money. Don’t feel intimidated. Remember, it’s your money at stake.