Shares/Stock How to protect yourself when buying stock

[Holicent]

When you buy stock, other people's money is on the line. That means you need to take extra precautions to ensure that your investment is treated with respect, and that you are fairly compensated for your investment. Here are some tips on how to protect yourself when buying stock:

1. Do not make any decisions about a company without first reading the annual report and learning about the company's financials.

2. Do not make any decisions about a company without having done your due diligence—that means reading through all of the 10-Ks (annual reports) and 15-F filings (dividend information), as well as any other documents that will be filed with the SEC (Securities and Exchange Commission).

3. Do not make any decisions about a company unless you have spoken with someone at that company who can answer your questions honestly and in detail—and if possible, ask more than one person.

4. Be wary of companies that seem too good to be true—if a stock looks too cheap or too expensive, it probably is.

 

[Jasz]

When you buy stock, there are a few things you should do to protect yourself from fraud and theft. First, find out what the company is called. This will help you find their website and other information, including their address and phone number so you can contact them if necessary.

Next, read through the company's financial reports and annual reports on a regular basis. If something doesn't look right, call your broker or ask them if they can check in with the company's accountant and make sure everything is on track before buying more stock. This will also give you an idea of how much money has been made and lost by the company over time to help you decide whether or not it's something worth investing in further.

Finally, have your broker check out any suspicious sales or purchases by companies that seem unusually large or small compared to their size in terms of assets owned overall or income received per share sold during that time period.