5 Things to assess before making an investment

Before committing capital, the SEC highlights a few essential principles every investor should evaluate:

✅ Your financial goals and time horizon.
Short-term needs require stable, liquid investments; long-term goals can tolerate more volatility.

✅ Your risk tolerance.
Understand how much risk you can truly handle, both financially and emotionally.

✅ The importance of diversification.
Spreading investments across different asset classes helps reduce overall risk.

✅ Costs, fees, and potential tax implications.
The SEC stresses that fees significantly impact long-term returns; always consider net performance.

✅ Red flags and product transparency.
Make sure you fully understand how an investment works, how it generates returns, and what risks are involved.

Source: U.S. Securities and Exchange Commission (SEC) — Investor.gov