Education is probably the most important element to investing and may consist of learning from an individual or business you have a long-term relationship with and whom you trust. There are numerous resources available to learn about investing such as educational institutions; books; information sessions offered by financial institutions and government agencies such as FDIC, Consumer Finance Protection Bureau, Small Business Association (SBA); business news shows, newspapers, and magazines; family members, finance professional, co-workers, and friends; the internet and social media.
It is important to understand why the source is providing the investment education – some may provide the information because they want you to invest your money with them; it is the mission of different government agencies to regulate certain investments and protect the investors; some individuals just want to share their investment knowledge and experience; and some financial institutions want to retain customers over a long period of time. Using multiple sources can help you expand your knowledge about investing, identify the type of investments that fit your budget, and help determine your investment options and style.
Education should consist of learning about financial markets, financial products, financial players, and the tax implications of investing. Learning about the financial markets, products, and players will help you understand financial terms such as buyers, sellers, stocks, bonds, derivatives, futures, commodities, real estate (commercial and residential), cost, basis, fees, commissions, margin, securitization, collateral, debt, short term, long term, risk, reward, charts, analysis, capital gains and losses, realized gains and losses, ETF, mutual funds, investment banker, hedge fund, money manager, financial adviser, economic events, and a host of other terms. Education should also consist of learning about the federal and state government agency that have a role in the financial markets. Each state has its own department that are set up to regulate investments and protect investors. The federal government has numerous federal agencies that are set up to regulate investments and protect investors such as the FDIC, SEC, and OCC (Office of the Comptroller of Currency).
To protect and minimize investment losses, you should recognize that there are known and unknown worldwide economic, social, health, political, and other events that will impact your investments. An awareness of these events can provide signals for selling certain investments and opportunities to start new investments. The smaller your investment, the easier it is to see and understand how these different events cause your investment to increase or decrease in value. For larger investments, resource providers are likely to provide information sessions on how these different world events impact their and your prior, present, and future investment decisions.
If you would like to get started invested, please continue reviewing all of the information under our investment tab, prepare a list of questions and/or action items then AAQ or Request a Webinar with AAT$.