Legal Question in Securities Law in California

Re: investment advice

Before investing any with anyone, whether a stockbroker or an investment adviser, check them out, and check out their firm. For brokers, go to finra.org and click on brokercheck. Put in the broker's name, get their history. Do the same for the firm. For Advisers, ask to see their form ADV and review it, and check it out online at sec.gov, click on information for investors, then click on check out brokers and advisers. Knowing who you are dealing with is a must.

From there, take steps to ensure that you know what is happening, how your broker or adviser is getting paid, and stay involved. For more info. on avoiding scams and ripoffs, you can visit theinvestorslawyer.com.

Re: investment advice

First, I'd be very careful about with whom you discuss or even tell about your $200,000 inheritance. There are many unscrupulous promoters out there offering get-rich-quick or double-your-money-at-no-risk schemes.

The proper advice depends upon your age and other resources, and your needs for life style, health, paying off an existing mortgage, etc. It also depends upon your tax bracket. Higher income folks should consider tax-exempt (government) bonds; for those in lower brackets, probably not. It also depends upon whether you want to leave an estate for your heirs or would be content to draw both principal and interest during your lifetime.

$200,000 conservatively invested can yield around $650-700 a month, pre-tax, without invading principal. If you are over 65, you might consider putting some of the money into an annuity for a little higher yield.

I'd recommend talking to at least two full-service brokers like Merrill Lynch or E. D. Jones, and at least two fee-for-services financial advisors (ones who charge you, rather than collecting commissions from financial products they sell you) and make a choice based on what you judge to be their interest in you and your gut reaction to the quality of the suggestions they give, before investing a dime.

You can always leave the money in a savings account until you learn about conservative investing and/or find a trustworthy advisor.

If you are younger (and thus have a lot of future inflation to face while still needing the income), your advisor will probably recommend a mix of investments that includes growth stocks. That's OK so long as your portfolio is siversified enough so that if one company crashed and burns, your future plans ton't go down in flames along with it.