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QUESTION:
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Avoiding Investment Scams | You've been saving for retirement - good job.
Just bear in mind that there are a lot of people who are looking to take your money with bogus investment schemes.
Some tips for avoiding trouble:
* If it sounds too good to be true - it probably is. There is always risk in an investment, and legitimate advisors or sales people will let you know that. Understand your risks before you invest.
* The bigger the promise of high returns - the more you should watch out. Typically the bigger the potential return the bigger the risk.
* Do your due diligence - research the offer, the firm making it, talk to other investors or advisors that you know and trust. Get the details in writing.
* Take your time - don't rush into any decision. If people are pressuring you - it's a red flag.
* Understand your what you are investing in. There are a lot of products out there and you should know the difference between products like stocks and bonds, margin accounts and cash accounts, options and futures, mutual funds and certificates of deposit before you invest.
* Listen to people you know and trust, not strangers. Don’t act on information from strangers. Some people who share a friendly tip about a "great investment" may be a con artist trying to lure you into an investment scam.
* Be wary of investments in unusual solutions or commodities. Scam artists often promise that the value of investments in coins, precious metals or stones, art, oil & gas and other commodities will go up quickly. Any investment can go up or down and quickly.
* Be on the lookout for tax havens or offshore investments - many times these are promoted as a way to avoid taxes. These may not provide a tax shelter and may also invite the attention of the IRS.
* Other resources for information to help you make investment decisions include: your state securities regulator, the federal Securities and Exchange Commission, 800-732-0330, www.sec.gov; the North American Securities Administrators Association, 202-737-0900, www.nasaa.org; and the National Futures Association (commodities), 800-621-3570, www.nfa.futures.org. |  | asked by SF Low Risk, 5/20/2006 |
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Categories:
Pre Retirement, Financial Advisors, Retired, Debt Consolidation, Retirement Investing, Late Stage Retirement, Financial Planning for Retirement
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