Investing
makes it possible for your money to work for you. In a sense,
your money has become your employee, and that makes you the
boss. You'll want to keep a close watch on how your employee,
your money, is doing.
Some people like to look at the stock
quotations every day to see how their investments have
done. That's probably too
often. You may get too caught up in the ups and downs of
the "trading" value of your investment, and sell
when its value goes down temporarily-even though the performance
of the company is still stellar. Remember, you're in for
the long haul.
Some people prefer to see how they're doing once a year.
That's probably not often enough. What's best for you will
most likely be somewhere in between, based on your goals
and your investments.
But it's not enough to simply check an investment's performance.
You should compare that performance against an index of similar
investments over the same period of time. You should also
compare the fees and commissions that you're paying to what
other investment professionals charge.
While you should monitor performance regularly, you should
pay close attention every time you send your money somewhere
else to work.
Every time you buy or sell an investment you will receive
a confirmation slip form your broker. Make sure each trade
was completed according to your instructions. Make sure the
buying or selling price was what your broker quoted. And
make sure the commissions or fees are what your broker said
they would be.
Watch out for "unauthorized" trades
in your account. If you get a confirmation slip for a transaction
that you
didn't approve beforehand, call your broker. It may have
been a mistake. If it happens more than once, or if your
broker refuses to correct it, call the SEC or your state
securities regulator.
Remember, too, that if you rely on
your investment professional for advice, he or she has
an obligation to recommend investments
that match your investment goals and tolerance for risk.
Your investment professional should not be recommending trades
simply to generate commissions. That's called "churning," and
it's illegal.
Lois Center-Shabazz is the founder of MsFinancialSavvy.com
and author of the 3-time award-winning personal finance
book, Let's Get Financial Savvy! ISBN #0971979502.
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