Investor Quiz

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Things Every Investor Should Know:

Do you understand how your investments were chosen?

Did choosing your investments involve any of these factors – past performance, commissions, a preferred fund company, a proprietary product, a conflict of interest?

Do you know your portfolio’s range of likely returns?

How much could your portfolio go up in 1, 3, or 5 years?  How much could it go down?  Did your advisor tell you?

What is the risk of your portfolio?

Do you know the risk number of your portfolio, and how to measure it?

Do you have an investment policy statement?

An investment policy statement can give you protection from investment schemes (Ponzi).  Pensions have an investment policy statement, so it is good for you too.

What are the hidden costs of your portfolio?

Do you know the management fees, commissions, trading costs, administration expenses, back end surrender charges, and tax expenses of your portfolio?

Do you have a financial plan?

Do you have different assets for different financial goals?  Do you know how much you need to accumulate to reach your goals?  Do you have it written down – your financial life on a piece of paper?

Do you know how much you can safely withdraw each year from your portfolio?

Do you know how to calculate this number?

Do you know the purpose of being educated about your investments?

Being educated makes you able to judge your investments, be calm in all investment markets, and you don’t fear something you don’t understand.

How can you get educated?

Use financial workshops, books, your financial advisor.  Ask your financial advisor for recommendations on books and workshops, and don’t ever be afraid to ask your financial advisor questions!

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