10 Tips To Protect Yourself
By: Source: AARP Bulletin Today Date Posted: 2003-06-30 11:34:20
- Make sure your computer and modem are fast enough to handle online transactions smoothly and your browser supports the most secure encryption technology (the 128-bit version).
- Shop around for reputable online brokers. Get recommendations from seasoned investors and visit brokers' sites. Check with organizations such as the National Association of Securities Dealers, Inc. and Gómez, Inc. for firm ratings. [See "Check These Resources."]
- Give only the information required when signing up for an account. Be wary of checking boxes offering third-party things like e-mail updates. Look for the security lock or key in the corner of your screen to be sure your information is protected. Change your account name and password every couple of months and never write them in an obvious place.
- Make sure you understand the firm's price structure, and examine the fine print. Are there hidden costs?
- Learn the lingo of online trading BEFORE you start trading. Investing sites should offer glossaries and tutorials.
- Educate yourself on the tax implications of frequent trading. Capital gains taxes can take a big bite.
- Don't believe ANY rumors or tips you hear in a chat room or message board. Do your own stock research.
- Start small, with simple buy and sell trades, leaving riskier moves like margin buying, short selling and options contracts for later, or never.
- Double-check the symbol of the company you want to trade. If you want to buy Symantec, for example, be careful to enter SYMC, not SMTC.
- Check to be sure your trade went through.
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