With any investment, whether recommended in person, by mail, telephone, or on the Internet, you should always slow down, ask questions, and get written information. Take notes so you have a record of what you were told in case you have a dispute later. Here are some questions to ask: 

  • Is the investment registered with the SEC and the state where I live? 
  • Is the person recommending this investment licensed with my state securities agency? Is there a record of any complaints about this person or the firm he or she works for? 
  • How does this investment match my investment objectives? 
  • Will the sales representative send me the latest reports that have been filed on this company? 
  • What are the costs to buy, hold, and sell this investment? How easily can I sell? 
  • Who is managing the investment? What experience do they have? Have they made money for investors before? 
  • What is the risk that I could lose the money I invest? 
  • What return can I expect on my money? When? 
  • How long has the company been in business? Is it making money, and if so, how? What is their product or service? What other companies are in this business? 
  • How can I get more information about this investment, such as audited financial statements, annual and quarterly reports, a prospectus?