SEC Promotes Investor Awareness During National Financial Capability Month

The Securities and Exchange Commission’s Office of Investor Education and Advocacy (OIEA) is embracing National Financial Capability Month as an opportunity to encourage all investors, especially first-timers or those relatively new to investing, to take the time to visit Investor.gov and utilize an array of resources to help them get acclimated.

“It’s great to see new investors participating in our capital markets, and it’s important to make sure they’re armed with the tools they need to make wise investment decisions,” said SEC Acting Chair Allison Herren Lee. “Identifying financial goals and creating a plan for the long term will help investors build a strong financial future.”

Among some of the SEC’s latest resources to teach the importance of financial literacy and provide tips on how to avoid becoming a victim of investment fraud:

• An investor alert explaining the detrimental effects of investing in the latest “hot stock” based on social media.
• How to look out for Coronavirus-related investment scams attempting to lure investors with phony claims about a company’s products or services to help stop the outbreak, and how to be wary of unscrupulous promoters encouraging investors to make COVID-related withdrawals from their retirement accounts not for current emergency needs but to buy riskier investments. It’s also important to understand that social isolation during the COVID-19 pandemic or otherwise can contribute to the financial exploitation of older investors.
• An investor alert cautioning not to make investment decisions related to SPACs based solely on celebrity involvement.
• A look at various frauds targeting Main Street investors and how to spot the red flags.
• First-time investor? Here’s how to get started.

“Understanding how to mitigate risks and invest wisely to meet financial goals is important every day of the year, but this month brings the importance of saving and investing into increased focus,” said Lori Schock, Director of the SEC’s Office of Investor Education and Advocacy.  “Our office continues its outreach efforts and wants to help investors in every way possible as they navigate our markets and understand how to protect their money and make informed decisions to secure their financial futures.”

Investors also can find such additional resources as an investor bulletin to understand the ins and outs of investing in mutual funds and ETFs that focus on environmental, social, and governance principles (ESG funds) as well as a guide to reading companies’ annual reports and a webpage dedicated to helping investors understand how to use a client relationship summary when choosing a financial professional.

Among the free financial planning tools available to investors:

• A Compound Interest Calculator to determine how much your money can grow or how much you need to save to reach a specific amount over time.
• A Required Minimum Distribution Calculator to determine how much you are required by IRS regulations to withdraw from your retirement fund at various ages.
• A portal to other financial calculators available through other regulators including a mutual fund analyzer, retirement estimator, and 529 expense analyzer.

According to the White House proclamation on National Financial Capability Month, “Financial education that builds financial capability helps families receive assistance, build resilience, and benefit from a stronger and more equitable economy. April is recognized as National Financial Capability Month to highlight the value of high-quality financial education to improving Americans’ financial capability.”

The SEC is a member of the Financial Literacy and Education Commission that sets strategic direction for policy, education, practice, research, and coordination so that all Americans make informed financial decisions.