SEC Offers 10 Tips For Better Investing

The common-sense ideas are designed to protect investors from scams and fraud.

Reviewed by: Cinthia Murphy
Edited by: Cinthia Murphy

The Securities and Exchange Commission has put together a list of tips designed to help investors with managing their money and avoiding “common scams” in the New Year.

The list, published by the SEC’s Office of Investor Education and Advocacy, detailed 10 ideas along with helpful tools. Here’s a summary:

  • Always check the background of an investment professional.
  • Promises of high returns with little or no risk are classic warning signs of fraud. Every investment carries some degree of risk, and the potential for greater returns often correlates with greater risk.
  • Be careful when using social media as an investment tool. Social media and the internet have become important tools for investors, but also present opportunities for fraudsters to lure investors into a wide range of scams.
  • It can be costly to ignore fees associated with buying, owning and selling an investment product. Expenses vary from product to product, and even small differences in costs can mean large differences in earnings over time.
  • Be alert to affinity fraud. Affinity frauds target members of identifiable groups, such as the elderly, religious or ethnic communities, or the military.
  • Any offer or sale of securities must be either registered with the SEC or exempt from registration. Otherwise, it is illegal.
  • Diversification can help reduce the overall risk of an investment portfolio. By picking the right mix of investments, you may be able to limit your losses and reduce the fluctuations of your investment returns without sacrificing too much in potential gains.
  • Did you know that active trading and some other very common investing behaviors actually can undermine investment performance? According to researchers, other common investing mistakes include focusing on past performance, favoring investments from your own country, region, state or company, as well as holding on to losing investments too long and selling winning investments too soon.
  • If you are investing in are saving toward a goal, or just want to learn about how your money can grow under various hypothetical scenarios, take advantage of our compound interest and savings goal calculators.
  • Unbiased resources are available to help you make informed investing decisions. A great starting point is

For ETF investors, there’s a wealth of educational material right here, on, aimed at answering all sorts of questions surrounding the ETF structure. Check out our ETF Guides here for all things ETF.

Contact Cinthia Murphy at [email protected]


Cinthia Murphy is head of digital experience, advocating for the user in all that does. She previously served as managing editor and writer for, specializing in ETF content and multimedia. Cinthia’s experience includes time at Dow Jones and former BridgeNews, covering commodity futures markets in Chicago and Brazil equities in Sao Paulo. She has a bachelor’s degree in journalism from the University of Missouri-Columbia.