If there is a prospectus, obtain it and read it. This is where the bad as well as the good about the investment has to be discussed. If an investment involves a company whose stock is publicly traded, get a copy of its latest annual report. It can also be worthwhile to visit your public library to find out what may have been written about the investment in recent business or financial periodicals. No investment is right for everyone.
Every investment involves some risk.
You have the right to find out what these risks are prior to making an investment. A business venture may fail. An oil well may turn out to be a dry hole. Others may be less obvious. Many people do not fully understand, for example, that even a U.S. Treasury Bond may fluctuate in market value prior to maturity.