AVOIDING INVESTMENT SCAMS PART 1 – COMMON SIGNS OF A SCAM INVESTMENT
Looking out for these common signs of an investment scam will help you to avoid losses and aid you in conserving your money for legitimate investment opportunities of which there are a multitude available to the retail investor.
Huge Gains are Being Promised with Low or Zero Risk
If promises are being made to you of huge gains with either low or zero risk then this is a common warning sign to be aware of. In the real world, when an investment has a potential very high upside it typically carries more risk than other investments than carry less risk along with less potential profits. The two really do not go hand in hand.
Scrutiny of the History of the Investment Shows Only Profits Never Losses
Even the top investment professionals in the world lose money on some of their trades even if their overall performance is in the black. Any firm claiming to have never lost money in any of their trades is clearly not being upfront about their trading history. This in itself is another warning sign that should be noticed.
Use of Overwhelming Sounding Terminology
Investment scammers try to sound intelligent and high profile on the phone when they call you to try to solicit your business. This is partly done by using a lot of complicated sounding terminology to make the investment broker sound smart and to give you the impression they have the skills to look after your money and do a good job with it. In the real world, your investment professional should not be trying to baffle you with terms you dont understand but in fact will make sure that you understand all of the dynamics of the investment in a simple way so that you can make an informed decision.
Suggestion That You Must Invest Now
Pressure to invest now and the impression that tomorrow will be too late is a common sign of an investment scam. Illegitimate investment firms realize that they are more likely to get your money if you make a snap decision and as such are trained to go for the sale on the first call and not allow the victim time to think about it. If the investment is real, then not only will the broker allow you time to think about it, but will be willing to send you some information about the product for you to read about before making a final decision.
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