Making Enlightened Financial Investments In Difficult Times

In times like these where the stock market is floundering and points rise and fall like an eccentric EKG, it pays to avoid getting bogged down in emotion and remember a few sound principles in investing.

Even though your fellow investors will swear you must have an "inside track", keeping a level head and a solid foundation are crucial to success in any market. Here are a few tips you can use to make rewarding and enlightened investments in trying times.

• Read That Prospectus - Lots of people just toss these aside, but your prospectus can give you insights and comparisons between your types of funds as well as risk level, fees, past performance and how well the assets are being managed.

• Check Out Their Background - You can find out the disciplinary history of any brokerage or sales representative by calling the NASD BrokerCheck at 1-800-289-9999 or visiting their site at www.nasdbrokercheck.com . You'll find out if any actions have been taken by securities regulators or criminal authorities against the brokerage firm.

As an added tip, ask if the brokerage is a member of the SIPC or Securities Investor Protection Corporation, which helps protect consumers in the event that the firm becomes insolvent. If the market value of your securities goes down because the market suffers, those losses are not insured, though.

• How Are They Paid? Find out how the salesperson is paid. Some representatives are paid based on the amount of money you invest or how many transactions you conduct on your account.

Oftentimes bonuses are paid for selling the firm's own products. Ask for a copy of the brokerage's commission schedule and find out what fees or charges you are required to pay when you open, maintain or close your account.

• Diversify - Don't put massive chunks of your portfolio into a single type of investment or family of shares. This way when the market fluctuates, you won't be as severely affected by its movements.

• Avoid Fads - You don't want a repeat of the dot-com bust from the late 1990's. The same applies to investing in other current fads like variable annuities, gold or whatever the industry of the day is. Go with what you know and don't hesitate to ask a professional for advice if you're uncertain about investing by yourself.

Above all, some of the best decisions you can make are based in the cold, hard facts that every investment industry and company has to make available to shareholders and clients.

By keeping informed of news, trends and reports, you can learn how your investments are doing, when to buy and when to sell. Read the fine print carefully and don't be afraid to change direction, risk and goals as your needs change throughout the years.

Remember, you're in control at all times, and keeping a down-to-earth, realistic outlook will help keep your financial boat steady while others are tipping or sinking.

The More You Know,

Judy O'