In an article published on NevadaAppeal.com, Deborah Jaquith, Director of Communications, AARP Nevada State Office, offered five tips to help investors avoid investment fraud:
- Watch for warning signs. These often include promises of overly high returns, risk-free investments, or "special offers." (For more "red flags," read our article on common investment fraud tactics.)
- Review investment products and accompanying documentation carefully. Our attorneys have written repeatedly on how important it is that investors thoroughly understand a product before they invest in it. Make sure you understand what you're investing in, how the product expects to make a profit, and what the risks are. And, remember, missing documentation is often a warning sign of fraud. Every investment opportunity should come with a prospectus or offering circular of some kind. When in doubt, check the product's registration with your state's securities regulator.
- Do your own research. You should always investigate a broker, brokerage firm, investment adviser, or other financial professional before investing. For information on how to conduct due diligence online, click here.
- Check your own comfort level. Don't discount your intuition. How do you feel about the investment product and the person selling it? If you get a twinge of doubt, pay attention. Conduct additional research or walk away. Safe is usually better than sorry.
- Help others. Sometimes the best way to learn is to get involved and teach others how to avoid investment fraud.