Tips for Consumers: Risky Investing in 2006
Tips for Consumers
Risky Investing in 2006
With the start of the New Year, many folks in the Baltimore area are resolving to improve their financial security by taking advantage of new investment opportunities. But every day, BBBs hear from consumers who invested in what they thought were solid and sure money-makers. They sometimes abandoned their common sense and fell for enticing promotions that were short on details but full of dollar signs. To steer clear of these risky ventures, the Better Business Bureau urges investors to carefully evaluate investments, their promoters and their sales pitches.
For example, schemers often peddle products using sales pitches that are "tied to the headlines." Recent promotions include
* Oil-and-gas schemes (higher gas prices are on everyone's mind),
* Bird flu stock scams (from companies claiming to have products to fight bird flu),
* "Get rich quick" real estate investment seminars (to take advantage of rising housing prices),
* Advance stock notifications for Mexico-based companies (to serve growing Hispanic populations), and
* Investment pools (to help hurricane and tsunami victims).
Be particularly cautious of any of the following red flags:
* Words like "risk free," "guarantee," "high return," or "limited offer." According to government regulators, no financial investment is "risk free" and a high rate of return means greater risk.
* Offshore scams and investment opportunities in other countries, particularly if they claim to be "tax-free" and "confidential." If you send your money abroad and something goes wrong, it will be particularly difficult to recover your money.
* Promises of "quick" profits or "fast" cash, "ground floor" opportunities, offers to share "inside" information, and pressure to invest immediately because the "market is moving." If they use high pressure to get your money fast, the "great deal" may be trouble!
Before making an investment decision, get the facts in writing. At the very least, obtain and verify if the investment and seller are licensed and registered. Check with the U.S. Securities & Exchange Commission (www.sec.gov) and the securities agency in the state where the promoters are located (www.nasaa.org).
To file a complaint visit: www.baltimore.bbb.org or write: BBB, 1414 Key Highway, #100, Baltimore MD 21230. Their office serves Baltimore and all of Greater Maryland.