TheStockAdvisor Advice

Good Sources for Good Information for Good Investing

Before you invest, you should always do your homework and rely upon reputable sources for information. Good sources for any investment information are brokers or investment advisers who you have worked with or are knowledgeable of. They can help find SEC filings and get other written information about the company and its business, finances, and management. Be sure to carefully read the prospectus and the company's latest financial reports.

Another good source is promotional material provided by investment newsletters, research reports, or radio and television shows. When properly done, the investors get the benefit of the research done by the promoter. Reputable promoters only place their recommendation on companies they believe in, as their value to the investor is only as good as the companies they promote. The federal securities laws require promoters to disclose who paid them, the amount, and the type of payment.

You can also do you own research by:

  • Going directly to the company you are interested in - Ask the company if it is registered with the SEC and files reports. If the company is small and unknown to most people, you should also call your state securities regulator to get information about the company, its management, and the brokers or promoters who've encouraged you to invest in the company.
  • Use the EDGAR database - EDGAR allows you to find out whether a company files with SEC and get any reports you are interested in. For companies that do not file on EDGAR, check with the SEC's Public Reference Room to see whether the company has filed an offering circular under Reg A.
  • Contact your state securities regulator - They are a good source of information on a company and the people behind it. Look in the government section of your phone book or contact the North American Securities Administrators Association to get the name and phone number. Even though the company does not have to register its securities with the SEC, it may have to register them with your state. Your regulator will tell you whether the company has been legally cleared to sell securities in your state. Too many investors could easily have avoided heavy and painful financial losses if they only called their state securities regulator before they bought stock.

    Other government regulators, such as banking regulators are also good places to look for information. Visit Federal Reserve System's National Information Center of Banking Information site at www.ffiec.gov/NIC, the Office of the Comptroller of the Currency at www.occ.treas.gov, or the Federal Deposit Insurance Corporation at www.fdic.gov.
  • The Secretary of State - Contact the Secretary of sState where the company is incorporated to find out whether the company is a corporation in good standing. You may also be able to obtain copies of the company's incorporation papers and any annual reports it files with the state.
  • Commercial databases - You can also access commercial databases for more information about the company's history, management, products or services, revenues, and credit ratings. There are a number of commercial resources you may consult, including: Bloomberg, Dun & Bradstreet, Hoover's Profiles, Lexis-Nexis, and Standard & Poor's Corporate Profiles.
  • Of course, the old fashioned way also works - You can always visit your local public library or the nearest law or business school library. You'll find many reference materials containing information about companies. Ask your librarian about additional resources.

Finally, if you have been asked to invest in a company and you are unable to find out anything on them, you may have come face to face with a scam. That is the time to report them to the SEC.


Disclaimer
- The information contained in the documents in this website should not be construed as an offer to sell, or a solicitation to buy, any securities referred to herein. The information is considered reliable, but not guaranteed as to accuracy or completeness. TheStockAdvisor specifically disclaims any liability in connection with the documents and/or information contained within this website.  See complete Disclaimer, SEC Compliance and Privacy Policy.

 
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