FINRA Issues Investor Warning About Chasing Returns in Non-Traditional Investments

FINRA recently issued an investor alert warning investors about selling traditional, lower-risk investments in order to invest in higher-risk, highly complex investments such as high-yield bonds, floating-rate loan funds, and structured retail products. With yields at near historic lows, investors may be lured toward riskier investments in the hopes of achieving higher returns.

FINRA is warning investors to use caution before undertaking such an investment strategy and has provided a list of questions for investors to consider before exchanging their traditional investments for a chance of higher yields. FINRA suggests investors ask themselves:

• Does the higher return from the investment come with increased risk?
• Do you understand how the investment operates?
• What are the costs and fees associated with the new investment?
• Is the product callable?
• Could the new investment be fraudulent?

You can read FINRA's full article, list of questions, and find additional information here.