INVESTMENT INFORMATION
Whenever you are thinking of making a new investment, you should first do some research about the company and the investment. A good place to start is the investment prospectus. The prospectus is a document describing an investment offered for sale. It usually contains a short statement of the objective of the company or mutual fund. It also contains a financial statement showing assets and liability, performance over a number of years, and any fees the investor must pay. Remember though that past performance is not a guarantee of future success.

Most companies will send copies of their annual and quarterly reports free of charge to prospective investors. The annual report contains a description of the company's business, its financial statements and other updated and condensed financial and nonfinancial information

It is important that you read this information so you know exactly what you are investing your money in. Remember asking to see a prospectus does not commit you to making the investment.

UNDERSTANDING PRICE QUOTATIONS
Investors can follow the changing prices of investment by reading prices quotation in daily newspapers or on TV. An investor needs to know not only the current price of the investment but also a history of the investment's prices. Stock prices are quoted in fractions of eighths for amounts less than a dollar. Bonds are also quoted in eighths but are sold in $1000 units quoted as 100s. Mutual funds quote a net asset value per share. The NAV is the market value of all the securities owned by the fund, less liabilities, divided by the number of shares.

Take time to familiarize yourself with the financial pages of the newspaper. This will allow you to keep track of your investment without relying on a broker.

INVESTMENT RATINGS
In addition to the short term yield information provided in price quotations, investors should compare risks and long-term returns. Independent advisory services publish ratings which allow these comparisons. For example Moody's publishes ratings of the financial condition of corporations and municipalities using bonds. Magazines which offer financial advice include Kiplinger's Personal Finance Magazine, Worth, SmartMoney and Money.

MARKET INDICATORS
Knowing how to read the stock tables will help you follow the progress of a stock you own or are thinking about buying. But what about the market as a whole? Market indicators will tell you in general terms how strong the markets are.

To get the bigger picture you may want to turn to a stock index, an indicator of market trends calculated by averaging several stocks. The two most widely used indicators are the Dow Jones Industrial Average and the New York Stock Exchange Composite Index. The Dow Jones Industrial Average is compute daily by averaging the day's prices in 30 key companies. The Dow is recorded in points that do not convert into dollars. The NYSE Composite Index is an average of the price changes of all the common stocks listed and traded on the New York Stock Exchange. Other major market indicators include the Standard and Poor's, NASDAQ, and Amex Indexes.

HOW TO INVEST
Once you know where you want to put your money, the next step is to decide how you will purchase your investment.

Many people like to invest with others who have similar goals through investment clubs. Investment clubs are also a good way to learn about investing. A specific amount of money is invested each month from the pool of funds from each member.

If you are investing on your own, you can sometimes purchase stock directly from a company, but usually you will need to go through a market professional. The selection of financial professional deserves careful thought. Selecting an appropriate advisor is important because the advice the person gives will affect your future financial well being. While many functions could be accomplished without the help of a financial advisor, many people lack confidence in managing their money and want advisors to hold their hands.

The most common way to buy securities is though a full-service or discount brokerage firm.
Some brokerage firms have satellite offices in banks, office buildings, and retail stores. Securities brokers are licensed in the state where their clients reside and are registered with the National Association of Securities Dealers. Futures brokers are licensed by and registered with National Futures Association.

FINANCIAL PLANNERS
Another type of financial advisor is the financial planner. Financial planning requires knowledge of budgeting, recordkeeping, saving and investment, insurance, taxes and retirement planning. Since nearly anyone can call themselves a financial planner, it is important to choose a planner who is qualified through training and experience, and who puts the investor's's financial well-being ahead of their own personal gain. Unless investors have discretionary income of $20,000 or more, they probably do not need the services of a financial planner, however some people find it worth the money (from $100 to $300 an hour) when they have a major financial decision to make.

SELECTING A BROKER
Before making a securities investment, you must decide which brokerage firm -also referred to as a broker/dealer -and sales representative -also referred to as a stockbroker, account executive, or registered representative -to use. Before making these decisions you should:

• THINK through your financial objectives and prepare a personal financial profile.
• TALK with potential salespeople at several firms. If possible, meet them face to face at their offices. Ask each sales representative about his or her investment experience, professional background, and education.
• FIND OUT about the disciplinary history of any brokerage firm and sales representative by calling 1-800-289-9999, a toll-free hot line operated by the National Association of Securities Dealers, Inc. (NASD). The NASD will provide information on disciplinary actions taken by securities regulators and criminal authorities. The New York Attorney General's Office and other state securities regulators also can tell you if a sales representative is licensed to do business in your state.
• UNDERSTAND how the sales representative is paid; ask for a copy of the firm's commission schedule. Firms generally pay sales staff based on the amount of money invested by a customer and the number of transactions done in a customer's account. More compensation may be paid to a sales representative for selling a firm's own investment products. Ask what "fees" or "charges" you will be required to pay when opening, maintaining, and closing an account.
• DETERMINE whether you need the services of a full service or a discount brokerage firm. A full service firm typically provides execution services, recommendations, investment advice, and research support. A discount broker generally provides execution services and does not make recommendations regarding which securities you should buy or sell. The charges you pay may differ depending upon what services are provided by the firm.
• ASK if the brokerage firm is a member of the Securities Investor Protection Corporation (SIPC). SIPC provides limited customer protection if a brokerage firm becomes insolvent. Ask if the firm has other insurance that provides coverage beyond the SIPC limits. SIPC DOES NOT insure against losses attributable to a decline in the market value of your securities.

Remember, part of making the right investment decision is finding the brokerage firm and the sales representative that best meet your personal financial needs. Do not rush. Do the necessary background investigation on both the firm and the sales representative. Resist salespeople who urge you to immediately open an account with them. Before making any investment think about how it fits with your financial goals and consider whether the claims for the investment are realistic.