Most investors think of due diligence as something you finish. You read the documents, check the market, look at the returns and the fees, and then you invest. Done.

In The Operator Question, Tanya Muro has a different name for that step. She calls it screening.

Screening is step one

Screening is useful. It weeds out the obvious bad deals. But it only tells you what a deal looked like on the day you signed.

Real due diligence, meaning checking an investment carefully, keeps going for as long as your money is in the deal. That might be five years. It might be ten.

According to Tanya, many people who lose money did do their homework. They researched the deal, invested, and then stopped paying attention.

What to keep watching

You don’t need a spreadsheet for this. You need to read what the company already sends you, and notice when it changes.

Read every update. Not just the payout amount. The whole report.
Watch for numbers that go missing. If a figure that was in last quarter’s report isn’t in this one, ask about it. In Patricia’s story, the missing table was the building’s occupancy, and it had fallen from 91% to 74%.
Watch for answers that get slower or vaguer. A company that used to reply the same day and now takes a week is telling you something.
Ask early. Questions asked at the first sign of trouble come while you still have options.

If you already have money in a deal and want to know whether to worry, Tanya suggests starting with Chapter 6 of the book, which is about reading investor updates for the language that replaces information.

Do you still read your updates?

This post is based on a one-minute video on Tanya Muro’s YouTube channel. For education only, not financial advice.