Every trader is hoping to 1 day find that perfect investment — the one that will produce substantial returns and cause you to rich beyond your wildest dreams. Unfortunately, there are less-than-scrupulous people out there who will play into those fantasies by pitching you scams. If you’re considering a new investment, look for the indicators below.
There is no such thing as a 100% risk-free investment. Even an investment as secure as, say, a bank or investment company savings account or a authorities bond could theoretically fail. And legitimate investment advisors will usually clue you in to any potential risks. So if someone comes to you with a “risk-free” investment, it’s time to begin scanning the fine print. Image source: Getty Images.
- Pregnant women
- For each of [Mr.] and [Ms.] Foleys’ sales of NTEK and NTGL to River North, Liceaga
- Fiscal deficit focus on for next three years pegged at 3 percent
- Customer and provider referrals
It’s an investing truism that the higher an investment’s risk is, the bigger its potential come back. Consider bonds: U.S. federal government bonds offer low profits because they’re also extremely low-risk relatively. Blue-chip corporate bonds are somewhat riskier than government bonds, so they offer a higher return somewhat. Therefore it continues completely to junk bonds, that offer high earnings to pay for their high risk fairly.
Few, if any, legitimate investments are time-sensitive, but scammers love to make this state. It makes the investment appear more desirable, and it generally does not allow you enough time to research the investment and confirm its legitimacy. The more urgently an investment advisor attempts to get you to commit, the greater important it is to do your homework — both on the investment advisor and on the investment itself.
Many normal people make an effort to follow in the footsteps of successful traders and wealthy superstars. Warren Buffett is well-known for his brilliant investment options, so if someone offers to market you shares of the stock that Warren Buffett has purchased, you might be interested naturally. If Warren Buffett really has bought that stock, then it could indeed be considered a good investment — but unless you check up on the seller’s story, for all you know then, they may be which makes it up. And if the storyplot inspections out even, that doesn’t indicate you should make investments. An investment that’s appropriate for a billionaire may not be befitting your collection. Ah, the free investment seminar.
You’re invited to have a free lunch time along with several dozen other excited investors. Together with your food, you will be served up a high-powered sales page disguised as “investment advice.” Unfortunately, investment workshops are a preferred platform of scammers looking for a location to pitch shady investments. Investigations by the U.S. Securities and Exchange Commission (SEC) and the private Financial Industry Regulatory Authority (FINRA) have found that half of these workshops include misleading information, and around 15% feature a part of potential fraud. If you must go to an investment seminar, don’t even think about buying into any investments on the spot.
Go home and do plenty of research first, including asking one or more reputable financial advisors what they think of the investment. There is certainly often little information available for “micro-cap” shares and the firms that issue them, so it’s easy for scammers to make up anything they want about them.
These small companies aren’t required to file financial reports with the SEC, which leaves investors with little background information to confirm a seller’s promises about the stock. And micro-cap stocks are usually among the most volatile of most stock investments, making them extremely dangerous. In certain situations, a micro-cap stock may be a good investment choice for you, but you’ll should do some serious research on the business before you decide. And if an investment consultant pushes a micro-cap stock and provides you with reviews and other background information, check up on that information yourself or get a second opinion from a reputable investment advisor before buying the stock.
Qualified investment advisors proceed through an extended and strict process to get accredited by one or more agencies. However, there is no legal requirement for someone claiming to be a financial advisor to get any kind of certification or license at all. That means that if the financial consultant you’re speaking with is not authorized, he or she could actually haven’t any investment knowledge or experience. Find someone who has proven to involve some qualifications by searching through FINRA’s BrokerCheck. And if they’re not certified, leave.