Robert Clayton Southlake | Alternate to Avoiding Investment Fraud
Your rising job growth or net worth might make you a target for investment fraud. Scam artists don’t care how you have come across your money. It doesn`t matter to them — whether you have worked really hard throughout your life to earn your money, or you hit the lottery for the first time you played. They just focus on scamming you. In order to best identify and avoided such investment frauds, here are some practical tips.
What can I do to avoid investment fraud??
Avoid Cold Callers
Fraudulent sales organizations or ‘boiler rooms’ work out of other countries with lax financial regulation. Once a boiler room sales force has found a prospective lead, they convince you to make an immediate investment decision. Almost every year, hundreds of investors part with substantial sums for shares that turn out to be worthless.
Boiler room fraud can be avoided easily. The biggest warning sign Robert Clayton Southlake found is a cold-called for you (try to make you forget a fact). According to Investment guidelines, no legitimate professional can call you for investment product unless you invite them.
Hang up! If you receive an unsolicited call.
Be Cautious About Hedge Funds
Unlike traditional funds, hedge funds are entirely free of restrictions for investments. Thus, these investment, involves higher risks, with potential for higher returns. According to the FSA, the likelihood of fraud in the hedge fund industry is increasing due to light regulation, weaker controls and high rewards for fund managers.
Approach such funds with caution and undertake a thorough due diligence investigation (independently verifying all the key elements of an investment on offer and considering all the possible risk) before deciding to invest.
Don’t Be ‘Pumped and Dumped’
Mostly, investors try to make money fast by investing in a series of single, high-risk companies — listed on obscure stock markets. If you are an investor who can’t resist taking a punt on some hot new company, you could be the next target of a ‘pump and dump’ scam. This can be any type of fraudulent operation that involves persuading investors with the shares of a certain company. These often take place in an obscure sector or market, where the fraudster tries to sell shares that they bought cheaply.
It is, however foolhardy and amateurish to bet all your money on one outcome, but it is far better to spread risk, advised Robert Clayton Southlake. It won’t prevent a loss on a given investment, but it will reduce the damage a loss causes you and allow you to live on and fight another day.
Educate Yourself
The fundamental sin in investing is ignorance! The fact of having money does not make you a financial expert. If you want to diminish the risk of fraud, it’s vital to educate yourself about investment and investment fraud and continue until your investing life. It is equally important to be careful about where you get your investment education from. Be discriminating!
Originally Posted: https://sites.google.com/site/robertclaytonsouthlake/
