Do you have the habits of a smart investor? Test yourself now

How smart of an investor are you?

When it comes to investing and other financial behaviors, we may like to think we’re better prepared and better informed than most people. But the reality is that learning to save and invest effectively — vital financial capabilities needed to build wealth over time — are skills that need to be developed.

To promote the importance of investor education, the International Organization of Securities Commissions (IOSCO), an association of 34 securities and futures regulatory agencies from around the world, hosted its second World Investor Week from October 1–7, 2018.

Participating IOSCO securities regulators, along with other IOSCO members and supporting organizations across the globe, will provide a variety of activities, including launching investor-focused communications and services; promoting contests to increase awareness of investor education initiatives; organizing workshops and conferences; and conducting local and national awareness campaigns in their own jurisdictions.

Financial professionals who work with retail clients and financial educators who work with students should take advantage of this opportunity to highlight the nine characteristics of a “smart investor” based upon key elements of investing knowledge and decision-making.

According to IOSCO, a smart investor is marked by the following characteristics. Review the list now: How many of the following statements describe your own investing behavior?

· Verifies that an investment professional is licensed;

· Conducts research on a product before investing;

· Assesses the impact of fees when choosing an investment;

· Understands that risk exists in all investments;

· Avoids “get rich quick” and “can’t lose” schemes;

· Recognizes the power of compound interest;

· Recognizes the importance of diversification;

· Plans for and invests according to his/her future needs and goals; and

· Recognizes the benefit of long-term, regular and diversified investment.

Whether you’re just getting started or if you’ve already built up a substantial portfolio on your way to reaching your financial goals, boosting your investing knowledge will help you to make better financial decisions.

And should you choose to work with a professional financial advisor to craft and implement your investing strategy, an understanding of the principles of smart investing will empower you to ask better questions, build a more constructive working relationship and get better results for your portfolio.

As more people join the investing ranks in an effort to save and build wealth for their futures, it’s vital that they develop a base of knowledge to help them understand both the risks and opportunities of a well-crafted investment strategy. World Investor Week 2018 is a good time to start working on building that knowledge.

To learn more about how you can take part, check out IOSCO on Facebook and Twitter, or visit the World Investor Week website.