Beware Of Investment Schemes By Being Objective And Skeptical

by Hank

Even if an investment seems to be reliable, it is important to ask some specific questions before investing any of your money. If you find it hard to answer some of the questions easily, then you are probably considering an investment that is not worth any more of your time. Remember, if it is too good to be true, then it probably is. Just following this simple strategy would have saved Bernie Madoff’s Ponzi Scheme victims billions of dollars. Use the following checklist as a gauge whenever you are considering any type of investment.

Here Are Questions About Your Investments You Should Ask

How is my money going to be spent? If you are investing your money in a legitimate investment, you should have an accounting as to how each dollar is being spent. Ask for written documentation as to the amount being expended for such things as marketing, promotions and commissions. If you have a lot of costs, then you will see much less in the way of a return on your investment. Remember, if you are dealing with a reliable company, you will know exactly how your money is being spent. There will not and should not be any apprehension in this area.

Has the company I want to invest in registered its securities? Do not leap into investing in a company that is not in the practice of filing annual reports or prospectuses with securities regulators. It is not reliable. Will I be missing out on a good opportunity if I do not invest my money today? If you are asking yourself this question, you are probably dealing with someone who will be the only one missing out if they do not take your money.

What is the portfolio history of the investment? Make sure that the investment you are considering has some type of history. Do not measure its worth by basing your decision on the track records of similar companies. The company should have the kind of reputation that proves it will be a good entity in which to place your money. Will my Financial Advisor or Accountant Approve of this kind of investment? Play it safe and make sure the investment you are considering can also be approved by a qualified financial advisor as well.

Does the sales representative who is selling the investment have a professional designation or license to sell securities? Do not rely on anyone’s word about an investment opportunity until you make sure they have professional credentials or are licensed to sell securities. In addition to the above checklist of questions, be aware that you may not obtain all your answers about a particular investment through the BBB or references. Scam artists solicit and pay individuals to act as references.

In addition, someone promoting a fraudulent opportunity may not have been involved in the scheme long enough to reap any types of complaints. Note the type of disclosures you are provided when it comes to risk as well. Make sure that the person selling the investment tells you, in exact terms, your liability. He should not gloss over this point if he is legitimate.

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