Anytime you trade stocks with a firm or reach an agreement with an investment company there are binding agreements that you should fully understand. Your part of the deal will likely involve investing money while the possible returns will be the only part of the agreement that isn’t guaranteed.
Of course, the very nature of investing is volatile so you need to know when it’s a good time to invest your money and when to walk away from a deal.
You can have a legal professional explain what you are agreeing to when you sign an investment agreement and show you what legal issues you may be exposing yourself to. Completing an online paralegal program can also help you read investment contracts on the same level as a legal professional.
Learn Legal Terms
Even if you just want to sign up for an online investment account where you are able to deposit cash from your bank and control your investments, there’s a legal contract that you have to sign first. Trades might come with fees that you need to agree to. Your investment contract will also explain when you can make withdrawals, how you will be compensated, and when you can sell stocks.
Never skim over any type of investment contract you are required to sign before agreeing to invest money. It may take you over an hour to read the fine print, but at least you will know what can happen while investing.
Locate All Loopholes
If there is the possibility that you will be signing a non-standard investment contract, you should have your attorney give you personalized advice. If possible, have a professional with an online master in paralegal studies help to prepare a secondary contract that closes potential loopholes.
Signing an investment contract that only requires you to invest and offers you no recourse is quite dangerous. Even if an investment isn’t guaranteed to be profitable, any investment agreement you make should allow you to get some of your initial investment back.
Should You Make the Deal?
After reading an investment contract, you won’t need to mill over your options. Either the contract makes it easy for you to figure out if going forward is smart, or you need to immediately decline. If you understand legal terms and contract law, you can ask the investment firm you want to work with to make some changes to the contract.
You can arrange a meeting between your attorneys so that everyone has a high level of protection. If the contract is presented as a ‘take it or leave it’ deal, you’ll know that declining participation is smarter than going into an arrangement that makes you financially vulnerable.
When you know how to read an investment contract on a professional level, you will be able to go to the sections that explain the most crucial parts of the deal. In under a minute, you’ll be able to see if everything looks good or if a new contract should be created.
Remember that all contracts are binding, so don’t go into investing without taking legal advice.