Should You Seek Legal Consultation Before Investing in Stocks?

We are amidst political and economic changes caused by the pandemic, the war in Ukraine, and the US dollar’s sudden appreciation. And so, now more than ever, investors need to seek the advice of experts, primarily those in the legal field.

Today, we will be discussing why, during crucial times, getting legal consultation before investing in stocks ensures that you’re making rational decisions in your investments and not based on the fear caused by the current state of the economy. We will also discuss how certified legal transcriptions are used by investment and securities lawyers, guaranteeing that the data lawyers present is credible. 

Let’s get started!

We’re Going through a Bear Market. What Should Investors Know

Investopedia reported that a bear market is when the securities price falls by 20% or more over a certain period, while widespread investors have pessimistic sentiments about the situation.

Many speculate that despite stocks rallying, we’re entering a bear market and going through its fourth stage. And although the bear market is still relatively young, the outcome is always the same: many investors panic as 40% or more of their portfolio goes down during the final stage. During these times, it is best to diversify your index and investments.

Why Opinions from a Financial Legal Expert Matter

You can seek financial and legal advice from two types of attorneys: Securities Lawyers and Investment Lawyers.

Now, what are securities lawyers? These are lawyers whose practice focuses on assisting clients in buying and selling securities by giving insights into its legal and regulatory side.     

Meanwhile, a financial investment lawyer focuses on legal services in various investment-related niches, like ETFs, stocks, retirement plans, commodities, real estate, mutual funds, cryptocurrency, and tax.

One of the biggest mistakes an investor can make is to have an investment that wasn’t well-researched and thought out. As mentioned, letting your emotions overrule your investment decisions increases the likelihood of you making the wrong decision. Due to this, you should create a strategy with a legal expert on your next course of action by separating moments of thinking rationally from the emotional aspect when planning.

How Legal Transcriptions Facilitate Identifying the Right Stocks

Lawyers work from 40 to 80 hours a week. The majority of their time is spent on administrative tasks, office administration, sending bills, licensing, continuing their education, etc. Because of this, some law firms have distributed their duties, like legal transcriptions, to certified transcriptionists to free up more time. 

Financial Investment and Securities Lawyers are also working alongside with legal transcribers to eliminate tedious tasks and ensure the standard of its quality. The lawyers then use these legal transcriptions to review data and have them as a reference when they provide legal advice to their clients on their finances.

Confidentiality and accuracy are crucial when outsourcing legal transcription. It’s something that Kate Banaag, the project manager of legal transcription company LexTranscribe, knows very well. As someone who oversees the accuracy and quality of transcriptions, she also ensures that the documents for law firms and government institutions across the US comply with applicable laws and are kept in strict confidentiality and security.

“Besides the convenience, many stock traders prefer to have investor meetings transcribed to make it more accessible. It’s also easier to present the transcription to another financial expert for a second opinion,” Banaag explained. 

She also stated that with the transcriptions, you have a physical copy that can be the basis for creating an investment strategy during this bear market. When there’s a lot of economic instability caused by external forces, it’s vital that you keep a clear head of the situation by grounding it with facts and advice from experts. 

Set the Record Straight Before Investing

Going back to what we mentioned earlier, your best possible course of action right now during a bear market is to create a long-term strategy and diversify your investments and holdings. One way you can make the most out of your stocks is by investing in value stocks, which have been shown to outperform growth stocks.

Even though growth stocks in Europe have exceeded value stocks, value stocks in the US have surpassed growth equities in seven out of nine months. This is due to “rising interest rates and bond yields,” which has made financing in intensive growth projects more expensive. During economic downturns, value stocks outperform due to having “a stronger cash flow profile.” 

With your lawyer, you can discuss the various stocks you can invest in long-term while looking into other forms of investment that would make money and lessen the risk of losing it. During this downturn, many stocks will be for sale. As a long-term investment, you can take advantage of this and buy stocks from valuable companies with stocks that are at a reasonable price based on their performance and how they bounced back after economic downturns. 

Conclusion

Investing always comes with risk, no matter how small. But that doesn’t mean we have to let external factors run their course on our portfolios and investments. Now more than ever, we need advice and guidance from experts like lawyers to take back some control by planning and implementing risk management in our strategy.