Precautions
Before investing or trading online, investors are advised to research the online brokers they plan to employ, assuring that those firms are licensed within their state or provincial jurisdiction. Informed investors are less likely to fall victim to unlawful securities schemes, such as the so-called "Boiler Room" scam. The US Federal Government provides practical tips to avoid investment scams via their OnGuard Online website. The website cautions investors to be wary of internet newsletters, investing blogs, or bulletin boards. Stock manipulators often float false information and "hot tips" on these sites, as part of an effort to affect the price of shares in a particular security. Investors are also advised to turn to unbiased sources when researching investments. The U.S. Securities and Exchange Commission (via their EDGAR database) is one example.
Investors must fully understand the potential risks of investing without the help of a trained Stockbroker or Investment Advisor. These professionals are experienced both in trade and education, and forgoing their advice could be costly. Inexperienced investors are easy prey for stock manipulators and pump and dump schemes often associated with penny stocks. For this reason, many online brokers offer a number of investment tools to educate and inform new investors.
Read more about this topic: Investing Online
Famous quotes containing the word precautions:
“The aim of every political constitution is, or ought to be, first to obtain for rulers men who possess most wisdom to discern, and most virtue to pursue, the common good of the society; and in the next place, to take the most effectual precautions for keeping them virtuous whilst they continue to hold their public trust.”
—James Madison (1751–1836)
“We must take precautions against being prematurely honed sharp—since at the same time we are being prematurely honed thin.”
—Friedrich Nietzsche (1844–1900)
“A multitude of little superfluous precautions engender here a population of deputies and sub-officials, each of whom acquits himself with an air of importance and a rigorous precision, which seemed to say, though everything is done with much silence, “Make way, I am one of the members of the grand machine of state.””
—Marquis De Custine (1790–1857)