Information from the Washington State Department of Financial Institutions

Getting Started with Investing

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Determine Your Investment Goals

Before you invest, determine what your investment goals are. Are you saving for retirement, a business, or college? Or just looking to boost your wealth? The investments you choose should be determined by your goals.

Determine Your Investment Risk

Risk and return go hand-in-hand. Higher risk usually means greater risk. Lower returns usually means greater safety. When choosing an investment determine if its risk matches your risk tolerance. With the exception of bank insured products, there will always be a degree of risk involved in investing.

Here are some of the common risks of investing:

  • Compatibility Risk: The investment may not suit your needs or goals.
  • Inflation Risk: The investment may not keep pace with inflation, eroding its value.
  • Market Risk: The risk of changes in the market reducing the value of your investment or returns.

Develop An Investment Plan

To reach your investment goals you will need a plan. Decide whether you are going to develop a plan yourself or consider working with an investment professional or a financial planner.

Remember To Diversify

It's a good idea to diversify your investments. Spreading your money among different kinds of investments can lessen risk. The idea is to avoid a situation where big declines in the value of just one or two investments wrecks your portfolio.

Ask The Right Questions Before You Invest

Before investing, ask tough questions, both of yourself and those who are soliciting your investments.

Know Your Rights

As an investor you have the right to ask for information about the investment as well as the person selling the investment.

Work with Licensed Professionals and Registered Products

Investment professionals need to be licensed with the Washington Department of Financial Institutions (DFI). In addition, most investment products sold need to be registered with DFI.

To check the licensing status and to find out if there are any complaints against an investment professional or investment product, contact the Washington State Department of Financial Institutions at 1.877.RING DFI (746-4334). If you live outside of Washington state, contact your state securities regulator.