1. All investments are speculative and will fluctuate in value. It should not be assumed that the value of investments will always rise. Past performance will not necessarily be repeated and is no guarantee of future success.
2. You should carefully consider in the light of your financial resources whether investing in stocks and shares is suitable for you.
3. Changes in currency exchange rates may affect the value of your overseas investments (foreign securities).
4. Penny Shares. You run an extra risk of losing money when you buy shares in certain smaller companies including “penny shares”. There is a big difference between the buying price and the selling price of these shares. If you have to sell them immediately, you may get back much less than you paid for them. You may have difficulty in selling these shares. The price may change quickly and it may go down as well as up and it may be more difficult to buy and sell shares in the penny share category. You should therefore not invest amounts you cannot afford to lose.
5. Non-readily Realisable Investments. You may have difficulty in selling such investments at a reasonable price. In some circumstances it may be difficult to sell them at any price. It can be difficult to assess what would be a proper market price for these investments. You should not invest in these unless you have thought carefully about whether you can afford it and whether it is right for you.
6. Geared Investments. All companies are likely to use gearing as part of their investment strategy and may choose to borrow money (gearing) to make investments. The effect of gearing on investment trusts and investment companies may cause the share price to become more volatile than the asset value of their underlying investments and may result in the share price of your investment being subject to sudden and large falls. Dependent on the level of gearing, it may mean that you could get nothing back.
7. AIM. The Alternative Investment Market (AIM) is a market designed primarily for emerging or smaller companies. The rules of this market are less demanding than those of the official List of the London Stock Exchange and therefore carry a greater risk than a company with a full listing.
8. ISDX Markets. ISDX Markets is authorised as a Prescribed Market under the FSMA 2000. It may be difficult to obtain reliable information about the current trading position of companies on ISDX Markets and if there is only one market-maker quoting prices, there may be occasion where you may have difficulty in buying or selling shares at a reasonable price or at all. Similarly the difference between the buying and selling prices can be wide and prices being quoted on ISDX Markets may only be indicative prices and not firm two-way prices. Additionally, there may have been little or no trading in the stock since its issue. Consequently, there is a higher level of risk attached to companies trading on ISDX Markets and if you have to sell shares in these companies immediately, you may get back much less than you paid for them.