Watch out if someone promises a lot for a little.One thing most investment schemes have in common is the promise of
high returns for little to no risk. In the world of investing, higher yields don't
exist without added risk. Remember: If it sounds too good to be true,
that's because it is.
Be wary of investments that seem to show overly consistent, positive returns.It is possible to make money in today's markets, but any investment
that seems unaffected by the shifting economy is likely a fraud.
Only invest in what you thoroughly understand.Con artists and fraudsters love to use complicated, intricate products
to hide their schemes. If you can't explain what you're investing
in, how the investment plans to make money, and what the risks are, you
probably don't understand the opportunity well enough to recognize
whether or not it's suitable for you.
If you have questions and can't get answers, walk away.Difficulty obtaining answers or information (such as an offering statement
or prospectus) is a red flag. If someone won't answer your questions
or provides you with vague answers, walk away. Better to miss an opportunity
than to be defrauded out of your hard-earned money.
account statements on a regular basis.The majority of con artists use fraudulent or falsified account statements
to cover up their investment schemes. Review your statements each month
for inaccurate, unusual, or
unauthorized trades and activity. If possible, you should also check your paper statement
against the online statement issued by your custodian/bank to ensure the
balances and trades match.