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Investing online for dummies 5th edition - Sindell K.

Sindell K. Investing online for dummies 5th edition - Wiley publishing , 2005. - 409 p.
ISBN-10: 0-7645-8456-1
Download (direct link): investingonlinefordu2005.pdf
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What regulatory agency is the investment subject to? Tell the broker that you want to check the investmentís good standing with its regulatory agency before going forward. The possibility of having to talk to a representative of a regulatory agency is a real turn-off to a swindler.
How long has your company been in business, and what is your track record? Can I meet another representative of your firm? If the broker or the investment doesnít seem to have a past, the deal may be a scam. Many swindlers have been running scams for years and arenít anxious to talk about it.
When and where can I meet you to further discuss this investment? As
you might imagine, dishonest brokers often wonít take the time to meet with you, and they donít want you in their places of business. Legitimate registered brokers are happy to sit down and discuss your financial goals.
Where will my money be? What type of accounting can I expect?
Often, funds for certain investments are required to stay in separate accounts at all times. Find out which accounting firm does the firmís auditing and what type of external audits the firm is subject to. (Make certain that the well-known accounting firm is actually the auditor.)
How much of my money will go to management fees, commissions, and similar expenses? Legitimate investments often have restrictions on the amount of management fees the firm can charge. Getting what the firm charges in writing is important. Compare the firmís fees with charges for similar investments.
How can I get my money if I want to liquidate my investment? You
might discover that your potential investment canít be sold or that selling your investment involves substantial costs. If youíre unable to get a solid answer in writing, the investment might be a scam.
If a dispute arises, how will it be resolved? No one wants to go to court and sue. The investment should be subject to a regulatory agencyís guidelines so that disputes are resolved inexpensively through arbitration, mediation, or a reparation procedure.
Is your broker dishonest or just incompetent? The state of Massachusetts provides a list of investment watchdog agencies at www.sec.state.ma.us/ sct/sctlink/linkidx.htm. You can also find the names, telephone numbers, and, when possible, the Web link to each stateís securities commission.
352 Part IV: The Part of Tens
Where to Complain Online
The Internet provides many ways to complain about online investor fraud. Here are four good resources:
Better Business Bureau (www.bbb.org) has an online complaint form and promises to follow up within two weeks of your complaint.
Federal Trade Commission (www.ftc.gov) provides an easy-to-use complaint form. Click File A Complaint Online at the home page.
Securities and Exchange Commission (www.sec.gov) has an excellent online complaint process.
National Fraud Information Center (www.fraud.org) forwards your complaint to the appropriate organizations and includes it in the centerís Internet fraud statistics (which might not help you get your money back but might be helpful to other online investors).
Chapter 19
Ten Important Selling Points
In This Chapter
^ Getting a grip on selling principles ^ Setting profit goals and maintaining them ^ Facing your disappointments ^ Moving out mediocre performers ^ Keeping an eye on the right economic indicators ^ Watching what the insiders are doing
WL nowing which stocks to sell and when to sell them is the hallmark of a W ?savvy investor. Selling decisions are difficult because no single solution fits all investors. In this chapter, I present some general rules and insights. You discover that individual investors routinely sell winners too early and ride losers too long. From the time that you purchase a stock, you want to start considering the right time to sell and reap your rewards.
If youíre pondering a sale, donít focus on only the sales price. Take the time to ask several questions and to research the Internet for answers about the securityís future. Use this chapter to develop your personal selling system checklist. Compare your selling candidates with your personal selling system checklist. If your investment choice is a loser, face up to your disappointment and take your losses. If your investment is a winner, you can laugh all the way from cyberspace to the bank.
Determining Your Personal Selling Rules
When you purchase a security, you anticipate a certain rate of return. To examine your investment selectionís performance, calculate what you have gained by holding the security:
11^ For bonds, measure the current yield by taking the annual interest payment and dividing it by the current price of the bond. (For details, see Chapter 13.)
354 Part IV: The Part of Tens
For stocks and mutual funds, calculate the investmentís total return (ending value less beginning value plus income divided by beginning value). See Chapter 3 for more information.
Visit the several credit-quality Web sites to check the quality rating of all bonds. Read the appropriate annual reports and fund statements for your stocks and mutual funds. Remember that no scientific formulas exist to guide you in your selling decisions. Knowing some wide-ranging rules and the kinds of questions to ask, however, can help you become a more successful investor. I describe some general examples of selling rules that beginning investors might find valuable. Veteran investors can have the same selling rules or quite different ones. Regardless of which category you fall into, both new and experienced investors need to choose a personal system and stick to it.
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