One of the first steps in choosing an investment is to check whether an entity is registered or licensed by the Cayman Islands Monetary Authority (CIMA). If an entity is registered or licensed by CIMA, that means it has met its basic regulatory obligations. To verify if an entity is registered or licensed by CIMA, see Investment Funds statistics or Securities statistics.
CIMA also maintains a list of mutual funds that have been removed from the register. The list of these terminated entities is only up until the date shown and can be viewed here .
Please note that an entitiy being registered or licensed should not be taken as an endorsement by CIMA that you will not lose your investment.
Investments come with costs such as fees, penalties, and commissions. These charges should be taken into consideration before you decide whether an investment is right for you.
Excessive costs can affect investment returns, therefore you should know costs upfront in order to set expectations.
Common types of fees include:
Investing requires balancing rewards and risk. Whether you are investing hundreds or thousands of dollars, a smart investor understands that to gain potential rewards to investing, he or she must be prepared for potential risks. You are responsible for deciding how much risk you want to take and therefore for mitigating against such investment risk.
You can manage investment risk by diversifying your investment portfolio. Instead of putting all your money in one type of investment, spread your money across different types of investments. Diversification is not a guarantee that you will not lose money on your investment, but it does enable you to reduce your risk of losses while possibly increasing your return potential across a portfolio of investments.
At some point you may be introduced to a “guaranteed” investment. Be careful, investment fraud can lead to you losing some or all of your money. Speak to your investment advisor, an industry professional, or seek legal advice before making an unsolicited investment, as these individuals will have experience and knowledge of the various types of investments and may also be aware of which types tend to be scams.
See our recent advisory for examples of ‘quick-and-easy’ money-making ventures that persons should be wary of, including a list of common red flags of illegal cash investment opportunities and possible questions to ask persons if or when approached.
Investing based on your future goals and financial needs is an important consideration for any investor. Being financially prepared for life events such as paying for an education, buying or building a house, caring for an elderly parent, having children, losing your job, approaching retirement, etc. can assist in reducing the stress of such events.
A smart investor does not invest only for the short term. He or she must understand that investing is part of their financial planning for the future. Having a good understanding about the power of compound interest (i.e. reinvesting any interest earned) to increase your earnings, and the benefits of a diversified investment portfolio (i.e. spreading your investment risk across different types of investment products), increases your chances of being prepared for any planned and unplanned events in the future.
Not everything that shines is gold. When it comes to investing, having a positive mindset is essential but thinking that all investments will be a success will probably leave you in bankruptcy.
Remember to always do your research and do not solely rely on feel-good stories or celebrity endorsement when choosing an investment.
To avoid financial mistakes, here are more ‘DON’Ts’ to consider:
DON’T be a follower – “I will tell you how to become rich. Close the doors. Be fearful when others are greedy. Be greedy when others are fearful.”- Warren Buffett
If we start with actual days, no one was expecting 2020 to be as challenging as it has been. A pandemic that stopped the entire world, was an entirely new learning experience for many of us. While lessons may vary, one thing remains true - it reminded us to always be prepared for life’s unexpected challenges. Here is how you can avoid financial hardship during uncertain times:
There is no way to predict when you will face a crisis in life, but you can arm yourself with the right tools to better protect you and your loved ones.
You cannot judge a book by his cover, and fraud can be deceiving. That is why it is very important to spot the warning signs of illegal investment opportunities, some of which may include but not limited to:
Diligence is your antidote to the manipulative and deceitful sales practices used to commit investment fraud. Trust your instinct. Intuition does not lie. For more helpful tips, see our recent advisory.
Suspicious of fraud? Any suspicious or fraudulent activity should be reported immediately to the Financial Crime Investigation Unit. This specialized unit is dedicated to investigating criminal offences related to money laundering, the financing of terrorism and fraud. Suspicious activity for financial crimes can be both hard and easy to spot.
Consider these examples of potential signs:
Suspicious shops, websites, social media accounts, and email addresses claiming to sell medical supplies currently in high demand, such as surgical masks (i.e Interpol case)
Phishing schemes that prey on virus-related fears
Anyone who believes they may be a target or victim of a financial scam is encouraged to contact the Royal Cayman Islands Police Service’s Financial Crimes Unit on RCIPS.FCU@rcips.ky or +1 345 949-8797.
Looking for the right investment can be challenging and you may want to quickly jump into an investment once you think you’ve found the right one. However, if you are considering an investment, it is vital that you fully understand the investment agreement before agreeing to invest. An investment agreement states the rights and responsibilities of the parties in an investment, as well as sets forth the parameters of the investment. If you do not fully understand the terms and conditions of the agreement, you may enter an agreement that is not mutually beneficial or you may be defrauded.
When reviewing an investment agreement, consider recommendations from experienced investors instead of “hot tips” from untrustworthy sources. If needed, do extensive research to understand the terms of the investment agreement to avoid losing money on an investment.