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Promoting Investor Education

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Investor Alerts

Investor Alerts

With the unemployment rate slowly falling, many Americans are facing a healthier job market and trying to get their financial lives back on track. Drawing on the findings of the FINRA Investor Education Foundation’s National Financial Capability Study of more than 25,000 Americans, the FINRA Foundation has developed five tips to help consumers both manage their day-to-day financial challenges and build a brighter financial future in 2014.

If you are considering rolling over money from an employer plan into an IRA—or if you have been in contact with a financial professional to do so—follow these tips to decide whether an IRA rollover is right for you.

In early January 2014, new laws regarding the legalization of marijuana for medical and recreational purposes went into effect in a number of states. We are reissuing this alert to warn investors about the potential for fraud in this arena, and to reiterate the risks of investing in thinly traded companies about which little is known. Any so-called "hot" stock can burn your portfolio.

With investor purchases of securities "on margin" averaging more than $406 billion for the first nine months of 2013 (a 27 percent increase over the same period last year), we are re-issuing this alert because we are concerned that many investors may underestimate the risks of trading on margin and misunderstand the operation and reason for margin calls.

Closed-end funds have become popular products because some offer high distribution rates—as high as 6 percent or more. But be aware that a fund’s distribution rate is not the same thing as its return—even if the numbers might look similar. And before you invest, be sure you understand where the closed-end fund is getting the money to pay distributions. In some cases, part of the distribution comes from the return of principal.

One of the most important consumer tips is know what you are buying. This maxim certainly applies to investing in stocks. There are well over 20,000 companies whose shares trade either on a U.S. exchange or over-the-counter. FINRA is issuing this Alert to caution investors that, with so many companies and trading symbols, there is ample room for confusion—and good reason to carefully research any investment before making a purchase.

Private placement offerings can be a key source of capital for American businesses. But investing in private placements is risky and can tie up your money for a long time. As with other investments, you can also lose some or all of your money.

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