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How important is it to read a company's articles of incorporation and corporate bylaws before buying its securities?

Personal Finance & Money Asked on December 15, 2020

I am advised to read bond prospectuses before buying bonds because "every bond issue is different". The same advice is also given when investing in preferred stocks. When it comes to buying an ETF, I am also advised to read the ETF prospectus "to know exactly what one is buying".

When considering an investment in a company’s securities (stocks, bonds, preferred stock, etc.), should one always read a company’s articles of incorporation and corporate bylaws before making the investment? After all, every company is different, and one must know exactly what one is buying.

One Answer

Yeah its pretty important although it likely won't make a difference in your portfolio's performance. These things often reveal rights and privileges and also landmines, all of which many other investors will not be aware of simply because they didn't read.

Answered by CQM on December 15, 2020

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