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1. Read and keep all files
Once you receive the documents from your broker, mutual fund, or investment adviser, check to make sure your confirmation and account reports are correct as all these documents are important. Double-check all dates and amounts. If anything is wrong, inform your broker or advisor and correct it. Otherwise, you may have problems down the road, such as being placed in assets that are riskier than you can afford.
2. Maintain good communication with your broker or adviser
If you have questions, it can be helpful to take notes during a conversation with a broker or consultant. When you learn how to manage a portfolio, the amount of moving parts associated with trading and investing seems enormous. Detailed notes can help you stay organized and provide a record of your interactions with your broker or advisor when things go wrong.
3. Get all confirmations and account statements sent directly to you
Receiving all the confirmation letters and account statements directly is a great way to monitor your account while making sure your broker/advisor has your contact information. If you can’t take care of your investments, send copies of these documents to someone you trust, such as a lawyer, or accountant. They can check the document for you to help you spot potential red flags, even opportunities you might not have considered yourself. This can prove invaluable as you grow as an investor.
4. Follow up If you do not receive account statement or confirmation
You have access to this information, and without it, it is difficult to manage your portfolio effectively. If you do not receive these documents, this can be a sign of trouble. You may miss an important announcement, or incorrectly calculate your location size based on changes to your account, and you may not be informed. So, be sure to follow up.
5. Ask for any information you receive about the investment
Ask questions if you don’t understand something. The sooner you ask for clarification, the sooner you’ll get the answers you need to properly manage your risk and make the trades you want. If your unauthorized investment appears on your confirmation or account statement, contact your broker or adviser immediately. This will cause serious concern as it may indicate a legitimate breach of your account security.
6. Getting online access to your account
Most portfolio management is done over the Internet. Online access to your account allows you to view your account at any time. You can verify the information you receive from your broker or advisor or in your confirmation or account statements. If you cannot access your account online, you may not be able to refer to the latest information, which can seriously undermine your risk management and ultimately affect your return on investment. You can also request that your confirmation and account report be sent to you by email. In this case, be sure to save the mail.
7. Do not make checks or other payments to your broker, adviser, or other individuals for investments
In most cases, money should only be sent to your brokerage firm, its clearing firm, or other financial institution. Paying checks to anyone or anyone else can be problematic, especially if the checks are deposited into the wrong account.
8. If possible, meet with your broker and visit the firm
Investing is a major financial undertaking and should be treated with the same degree of investigation and caution as any other major purchase you might make. Therefore, it is unwise to invest only with anyone. Visit the company to make sure it is operating legally, and use the opportunity to get to know your broker. This will help to establish a level of personal understanding that can only be achieved through face-to-face meetings.
9. Conduct independent research on your investments
Ideally, you should independently verify the information by carefully reading the prospectus, research reports, offered materials, annual reports, etc. Another good source of research information is the exchange website for product trading, especially the contract specification page. Being familiar with the details of your investments can help you better understand the product, help you gauge risk, and build your overall investment or trading plan.
10. Periodically review your portfolio management strategy
Make sure the securities in your account still meet your investment goals. If not, research which types of investments are best suited to your specific situation, based on your portfolio management plan. Also, make sure you understand and are familiar with the risks, costs, and liquidity of your investments. If you don’t, be sure to notify your broker/consultant and discuss additional opportunities. You have the right to know that your documents and company records must accurately reflect important information about you, such as your age, income, net asset value, financial status, long-term goals, and investment goals, so it is important to ensure that all information is correct and free of errors. Also, keep all the documents that your agent/consultant provides to you, and always remember to store them in a safe place.
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