What Is Investment Protection and Why Do You Need It? (2024)

31 Aug 2018
No matter what the asset is, there is always a chance you could lose everything. It doesn’t matter if it’s a home, a stock, or even gold. You need investment protection. Click here to learn more about what that entails.

What you own is an extension of yourself. Your house, your personal belongings, your financial aspects – all of these things hold a great value to you, and you…

So what’s happens if you lose it all?

If you’re like most people, that’s not something you’d even want to think about, much less have happened to you. So why do you walk around without any protection on your valuables?

You need to add investment protection to your items to make sure your most important items are taken care of.

Read on to learn what investment protection is and why you should have it placed on your valuables.

What is Investment Protection?

Before we can learn how to protect investment, we first need to clearly define what investment is.

The explicit definition of investment is the act of investing money into something for profit or other material gains.

In other words, an investment is something you can put money into that gains value over time and can be sold later on to make even more money.

If what you’re working with fits the bill, then you’re going to want to protect your investment. So what is investment protection, exactly?

Quite simply, it’s the act of protecting one’s means of investment wealth from matters that could damage or eliminate it.

These matters can include anything from foreign threats to theft tosystematic failure.

This definition is pretty broad, and because of that, you can really use it to cover anything that can be considered an investment.

Okay…But Why Do I Need It?

Perhaps the real question here is, why would you not want it?

Being able to protect your investment is a big deal and a huge relief for those involved. By adding protection, you also gain access to a ton of sweet deals that could be useful in the future.

First off, there’s the freedom of investment. This means that you’re given the right to freely invest in whatever you want. However, you want, without being micromanaged by the government (of course, you have to keep it legal).

Secondly, you are entitled to “fair and equitable treatment” across nations. This is good if you’re working with aforeign investmentthat needs blanket coverage and clearance throughout all countries.

Finally, there’s the fact that you get compensation in case of damage to the investment. If your investment is damaged or ruined in any manner, you are guaranteed compensation for the investment itself.

Case and point: it’s about time you started giving your investment the protection it deserves.

The Right People for Your Investment Needs

Now that you know how vital investment protection is, it’s time to get it from the people you can trust.

Here at Solera, we’re serious about protecting your investment and making sure our customers are satisfied.

We offer an extensive list of investment and advice measures, includinginvestment management, traditional and alternative investments, financial planning, and much more.

Do you have any questions you wish to ask? If so, don’t hesitate toreach out to us; we’ll be sure to get back to you and address any concerns you may have.

We look forward to hearing from you.

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What Is Investment Protection and Why Do You Need It? (1)

Daryl Seaton
What Is Investment Protection and Why Do You Need It? (2024)

FAQs

Why is investor protection needed? ›

An investor protection fund may compensate investors for losses in the event of the bankruptcy of an investment dealer or a mutual fund dealer.

What does it mean to protect your investment? ›

The cardinal rule of investing is: Protect and preserve your principal. Investors can preserve their capital by diversifying holdings over different asset classes and choosing assets that are non-correlating. Put options and stop-loss orders can stem the bleeding when the prices of your investments start to drop.

What is investment and why do we need to invest? ›

The Bottom Line. An investment is a plan to put money to work today to obtain a greater amount of money in the future. It is also the primary way people save for major purchases or retirement. With stocks, bonds, real estate, or commodities, individuals can create a diversified portfolio.

Why do we need investment policy? ›

The purpose of an investment policy statement is to detail how an investment portfolio will be built, managed, and assessed. Its goal is to align both the investor and the investment manager regarding all aspects of the investment process.

What is the meaning of protective investment? ›

Protective Investing is a portfolio management philosophy that thinks beyond a simple mix of stocks and bonds to minimize risk and maximize return potential. With Structured Notes, annuities, and buffered ETFs, we complement your existing portfolio with investments seeking to dampen volatility.

What is investor protection fund in simple words? ›

NSE has established an Investor Protection Fund with the objective of compensating investors in the event of defaulters' assets not being sufficient to meet the admitted claims of investors, promoting investor education, awareness and research.

What is a protected investment? ›

Investment protection is a broad economic term referring to any form of guarantee or insurance that investments made will not be lost, which may be through fraud or otherwise.

Why do you need to protect your money? ›

It will give you peace of mind knowing where your money is at all times. Just like you wouldn't leave your backpack unattended outside, you shouldn't leave your money where it could be stolen or lost. Protecting your financial information online is just as important as keeping your money in a bank.

How do we protect investors? ›

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  1. Meeting the standards. Dealers, advisers and investment fund managers must demonstrate fitness for registration at the time they apply for registration, and they must continue to do so throughout the period that they are registered. ...
  2. Setting the bar. ...
  3. Checking in. ...
  4. Fair markets. ...
  5. Taking action. ...
  6. 4 signs of investment fraud.
Oct 4, 2023

Why is investment important in life? ›

Investing is an effective way to put your money to work and potentially build wealth. Smart investing may allow your money to outpace inflation and increase in value. The greater growth potential of investing is primarily due to the power of compounding and the risk-return tradeoff.

What is investment in simple words? ›

What do you mean by Investment? Investment definition is an asset acquired or invested in to build wealth and save money from the hard earned income or appreciation. Investment meaning is primarily to obtain an additional source of income or gain profit from the investment over a specific period of time.

What is a good investment and why? ›

A good investment is one that is well-suited to an investor's financial goal, has an acceptable risk level and increases an investor's net . A good investment is one that fits your financial goals, risk tolerance, and makes money.

Why are investment plans important? ›

Investment planning is an important process because it can help you get the maximum value from your hard-earned savings. A well-structured investment plan can help: Generate income. Reduce tax liability.

Why is it important to save and invest? ›

Saving and investing are both important to consider in your future planning. Through saving money, your money is kept safe, and easy to access should you need it. By investing early over time, your money grows in value, benefiting from the magic of compounding.

Why is investment decision the most important? ›

In organizations, investment decisions are crucial for growth and profitability—impact cash flows—have a long-term impact as many of these decisions are irreversible. Even with limited funds, individuals can obtain impressive returns if the investment is well-planned.

Why would an investor use a protective put? ›

There are typically two different reasons why an investor might choose the protective put strategy; To limit risk when first acquiring shares of stock. This is also known as a “married put.” To protect a previously-purchased stock when the short-term forecast is bearish but the long-term forecast is bullish.

Why do shareholders need protection? ›

A shareholder protection arrangement resolves these problems. Funds would be available when they were needed, on the death and/or critical illness of a shareholder. The sudden loss of a key shareholder can disrupt a company, but shareholder protection will minimise this interruption to the business.

What is the importance of consumer and investor protection? ›

The policies, laws and rules protect and help both businesses and consumers by regulating a competitive financial market. Firms need a dynamic and effective environment in order to thrive and expand. Consumer protection laws facilitate that by preventing the occurrence of unfair competition.

What is the primary purpose of SIPC is to protect investors from? ›

SIPC protects against the loss of cash and securities – such as stocks and bonds – held by a customer at a financially-troubled SIPC-member brokerage firm. The limit of SIPC protection is $500,000, which includes a $250,000 limit for cash.

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