Stranger Than Fiction
- “Tree Swallows Bicycle”
- “Gun-Toting Parrot Foils Burglary Attempt”
- “Store Robber Wears Beer Box Over Head”
- “Beer-Loving Goat Is The Town Mayor”
- “Trapped Mouse Burns Down House”
- “Man Shoots Slow Flushing Toilet“
According to the Mammoth Book of Weird But True, all of the foregoing headlines are TRUE.
When it comes to investing, con artists make statements that on the surface sound good (and definitely seem more believable than the newspaper headlines), that intend to separate an investor from their money. The most successful investment scams are built on trust and often times sound believable. For example, can you find which of the following statements are true:
- “This investment offers a high return with no risk whatsoever”
- “Your return is absolutely, positively guaranteed. This is no way you can lose money on this investment”
- “You need to invest right now. If you wait until tomorrow, the opportunity will be gone”
- “Congratulations! You are one of a select few who will be allowed to make this investment”
- “I have information from a reliable source that the price of this stock is going to triple in 30 days”
All of the statements are FALSE.
According to the North American Securities Administrators Association, there is no such thing as an investment that offers a high return with no risk. This type of sales pitch is often aimed at people who are non-risk takers, particularly those individuals who are on a fixed income or those who are near retirement and are worried about have a large enough nest egg.
Also, if the investment deal is legitimate, it will be there tomorrow. This type of sales pitch is used to create a false sense of urgency, whether it’s a limited amount of the investment product or a scarcity of time to invest.
If someone is calling you on the phone to try and sell you the “best investment this side of the moon,” they have probably called 200 to 300 other people that same day to pitch their offer. If an investment is so profitable, why do the promoters need to call you out of the blue?
Bottom-line – If you hear someone make one of the foregoing statements, take your checkbook and run!
Fred Joseph can be reached at fred.joseph @ state.co.us or at 303-894-2320.