A repeatable due-diligence checklist

Before investing, be able to answer seven things in ordinary language: What is it? How does it generate return? What can cause a permanent or temporary loss? What does it cost in explicit and less-visible terms? How and when can you sell? What legal, tax, and custody arrangements apply? How does it change your whole portfolio and fit your written goal? A gap in any answer is a reason to pause.

For a public company, start with SEC filings and the company's audited reports. For a fund, read the prospectus, shareholder report, holdings, and index methodology. For a bond, verify issuer, offering documents, credit, call features, maturity, and dealer pricing. For advice, verify the professional and disclosures. Product marketing is not a substitute for primary documentation.

Write down the core claim and the strongest counterargument. Label facts, estimates, and opinions separately. Record the date of a data point and the source; numbers change. Test what happens if revenue slows, rates rise, liquidity vanishes, the issuer defaults, a platform fails, or you need to sell earlier than planned.

The burden of proof should rise with complexity, illiquidity, leverage, concentration, and sales pressure. You do not have to own every popular asset. A plain, understandable investment that fits a goal can be more useful than a sophisticated product you cannot monitor or explain.

• I can explain the asset and source of expected return.
• I verified the legal entity, documents, costs, and custody independently.
• I understand the maximum plausible loss and when I can exit.
• This does not duplicate an existing concentrated exposure or threaten near-term needs.
• The position size and decision fit my written plan—and I can wait before acting.