Buyers Equity Guide (Pty) Ltd Investment Tips

The Financial Services Board (FSB) - the regulatory board for the pre listed share market has laid down some guidelines for first time investors. Buyers Equity Guide (Pty) Ltd is able to list several of them plus some of their own that they've learnt along the way. Here are your investment tips and a few important questions that you should be asking before investing your money:

1. If you are considering investing with a company, check if the company is registered with the Financial Services Board. Check the Financial Service Provider's (FSP) number on the website of the board by going to www.fsb.co.za, click on to FAIS and then scroll down to "Search for Financial Service Providers". Type in the number of the FSP or the name of the company to see if they are authorized. If they are not authorized, don't do business with them as you have less recourse than with an authorized FSP.
2. If you are unhappy with the treatment received by the company that you have done business with, you can complain to the Ombudsman of the FSB, Mr Charles Pillay - he is obligated to address the problem.
3. Every single company whether authorized or not has to set up a trust account for the taking of deposits from investors. They are forbidden from taking deposits into their personal name or any other account. Never pay cash to the "consultant" that you are dealing with - use neither hard cash nor a cash cheque.
4. Every investor is entitled to obtain a share certificate for every single purchase that he/she makes. The companies act states that this has to be carried out within 6 weeks, so if you have not received a share certificate for your investment demand a share certificate or report the company to the FSB.
5. An investor must only invest money that he/she can afford to lose. This is commonly called "venture capital" or "private equity" and the investor must keep in mind that the risks involved are a lot higher than putting your money in the bank. The bank is a sure safe place to keep your money but on the other hand, the returns are nowhere near as high as they are in the share industry.
6. Check the "business plan" of the company that you are looking at investing into. Check the "ratio analysis" of the company.
7. Check the credentials of the company that is raising the capital.
8. Ask the company what percentage(%) of commission they are enjoying from your investment.
9. Ask for referrals or testimonials from other investors.
10. Do a background check on the company that is raising the capital.
11. Do a background check on the company that you are planning to invest in. Have they ever been in business before? If yes, what went wrong?
12. Is there opposition to the project that you are looking to invest in?
13. Is the venture capital/private equity company taking director shares in the company?

For more information contact Buyers Equity Guide (Pty) Ltd by calling +27 (0)11 262-2612.