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Rules For Successful Investing

  • What is the liquidity of the investment? How easy is it to get your money back when you want to sell or cash in your investment?
  • Understand the entry, ongoing and exit fees of an investment. Compare them to similar investments. Fees can have a large impact on your long-term returns.
  • What is the size of the investment? The size of managed funds, for example, can vary greatly.
  • Are you comfortable with the organisations you're investing in and through?
  • If you have any suspicions that the investment scheme may be an investment scam, check out the latest bad offerings at the Financial Markets Authority and The Ministry of Consumer Affairs' Scam Alerts.
  • Before handing your money over to any adviser, ensure you've been told, and are comfortable with, their money-handling procedures. If possible, make cheques payable to the investment, for example, a fund manager, rather than the adviser.
  • Understand the tax implications of your investment instrument. Just as tax benefits and liabilities differ for each investment opportunity, so will tax status. And, just like fees, taxation can have a major impact on your long-term returns.
  • Read all the available documentation on the investment. While the investment statement must be given to you, you may have to request other documentation.
  • If you don't completely understand what the investment is about, or you're uncomfortable with it for any reason, avoid it completely; there are hundreds of alternative investment options.