Due diligence

Due diligence is the process of carefully researching and checking before making a decision to commit to something. It’s about exercising reasonable caution and care by a person who is buying or selling. It's about understanding what could go wrong, and deciding whether an investment fits your goals, time horizon and risk tolerance.

For share market investors, due diligence can include looking at what a company does, how it makes money, whether it’s profitable, who runs it, how much debt it has, and whether the share price seems reasonable. It can also involve reading company announcements, financial statements, and official documents like offer documents or prospectuses.