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3 Key Due Diligences You Should Make Before Any Investment

Published on: September 12, 2018

How do you make your investment decisions? Prompt, carefully or under pressure? Basically, most people make their investment decisions based on information provided by their investment brokers. In some cases, the brokers pressure clients into making an investment decision, giving them not enough time to think through the investment, and make intelligent decisions. These often lead to bad investment decisions, losses, and conflicts. Goodwin Barrett mis-sold investment claims specialists help victims to redeem their investments.

Investing is the gateway for wealth creation. In England, many people invest in pensions, mutual funds, stock market, fixed deposits, peer-to-peer (P2P) platforms and government securities with the hope of making a high return on investment (ROI). Some of these investments make high returns while others make just a little. For instance, Prosper, a P2P platform offers up to 16% annual interest rate on fixed rate investments.

Some people invest themselves, but others talk to professional investment brokers to help invest their money. At the end of the day, there are wins and losses. If the investment decision was right, the probability of making enough ROI is sure. But if the wrong investment decisions are made, both the principal and interest on earnings would likely be lost.

Anyway, if you felt pressured to invest in any security and you have lost it all, you can consider talking to us, Goodwin Barrett mis-sold investment claims specialists. If you are considering making a new investment, you should consider using the following parameters to make a good investment decision.

1. Understand how the investment works

Warren Buffett, the world’s richest investor said, “The first rule of investing is, ‘Don’t lose money’ and the second rule is, ‘Don’t forget the first rule!” To avoid losing money in any kind of investment—pensions, mutual funds, stocks, business interests or whatever it is— make sure you understand how the investment works. Ask questions and demand infallible, provable and factual answers before parting with your money.

2. Understand the risks & rewards of the investments

The reason why most people invest is to get a better return on their money in the future. But to every investment, there are risks associated. Don’t just get excited about the investment because of the returns. Make sure you ask the investment broker to give you detailed information about the risks associated with the investment. Ensure you understand the risks and rewards: how much you can stand to lose, return rate, and how to recoup your losses.

3. Understand the terms of the investments

The terms of the investment defines the rules and regulations that the investment seller would be using when dealing with the investors. Make sure you read and understand the terms of the investment before signing the agreement. Don’t be rushed, fooled and pressurised by the financial adviser.

Take your time to understand the investment, the risks & reward ratio and then when you are through, ask several questions to gain clarity. It is only when you have done your due diligence and gained clarity should you sign the investment agreement. If you want to know whether you have been mis-sold on an investment, read our guide at http://goodwinbarrett.co.uk/was-i-mis-sold-my-investment





