Saving and Investing for Students

• 
Describe your typical client. Can you provide me with ref-
erences, the names of people who have invested with you 
for a long time?
• 
How do you get paid? By commission? Based on a per-
centage of assets you manage? Another method? Do you 
get paid more for selling your own firm’s products?
• 
How much will it cost me in total to do business with you?
Your investment professional should understand your invest-
ment goals, whether you’re saving to buy a car, or to pay for 
your education.
Your investment professional should also understand your 
tolerance for risk. That is, how much money can you afford 
to lose if the value of one of your investments declines? An 
investment professional has a duty to make sure that he or 

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SAVING AND INVESTING
she only recommends investments that are suitable for you. 
That is, that the investment makes sense for you based on your 
other securities holdings, your financial situation, your means, 
and any other information that your investment professional 
thinks is important. The best investment professional is one 
who fully understands your objectives and matches investment 
recommendations to your goals. You’ll want someone you can 
understand, because your investment professional should teach 
you about investing and the investment products. 
How Should I Monitor My Investments?
Investing makes it possible for your money to work for you. 
In a sense, your money has become your employee, and that 
makes you the boss. You’ll want to keep a close watch on how 
your employee, your money, is doing. 
Some people like to look at the stock quotations every day 
to see how their investments have done. That’s probably too 
often. You may get too caught up in the ups and downs of the 
“trading” value of your investment, and sell when its value 
goes down temporarily—even though the performance of the 
company is still stellar. Remember, you’re in for the long haul. 
Some people prefer to see how they’re doing once a year. 
That’s probably not often enough. What’s best for you will 
most likely be somewhere in between, based on your goals and 
your investments. 
But it’s not enough to simply check an investment’s perfor-
mance. You should compare that performance against an index 
of similar investments over the same period of time to see if you 
are getting the proper returns for the amount of risk that you 
are assuming. You should also compare the fees and commissions 
that you’re paying to what other investment professionals charge.
While you should monitor performance regularly, you should 
pay close attention every time you send your money somewhere 
else to work. 

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