5 Things To Know Not To Trap In An Investment Scam

Today we see how big the number of different investment projects in the Internet is. And all of them try to persuade investors to put their funds into very their opportunity. Nevertheless, who actually knows about what projects in order not to be left without a single dollar or even to gain something significant?

My answer will be as old as hills the people who are already successful in the field of the investment and who are ready to share their secrets with novices in this hard stuff. Actually, this factor is going to determine whether you will be successful or not! In this article I tried to collect some important tips from them that will help you to avoid trapping in different scams.

Tip: Never jump on the bandwagon before investigating the investment opportunity with a microscope. Whoever is promoting the scheme might be a victim without realizing it.

Tip: Scrutinize each investment opportunity before getting involved. A person who promotes a project, maybe a victim of a fraud itself not knowing about it.

Managers and Custodians

Accounts are segregated from all other investor funds and institutional funds. The portfolio manager only has the authority to execute trades, and can’t withdraw or transfer money.

There is kind of prescription from professionals in order to protect oneself from a scam and it consists of having a 3rd party preserving the cash by the outcome of the bet which is to be paid. It may be also called – the custodian’s hold of assets, which shouldn’t be treated as a portfolio manager, that is able only to follow the trades and can’t withdraw money. And accounts are made of institutional and investor funds.

Tip: Fraud is more likely to occur when the manager and custodian is the same person, as Bernard Madoff was. An investment manager who wants complete control of a client’s money is hiding something.
Exotic Investments

Tip: The scam investment usually occurs when the custodian and the manager is the only and the same individual like Madoff. A manager who wants to take over the client’s money is probably keeping something from others.

Frauders like to promote known strategies as gas and oil production or anything connected with the last technologies, because it can be all shown in an intricate way, but the basis isn’t understood well by the investors who forget about their money for a while.

Tip: Investment isn’t so hard as it seems to be, get involved into trust, stocks, mutual funds, which are also may be called as transparent assets.

In most cases you have to just ask simple questions and never be confused to invest your money. For example, is your money able to be withdrawn in an instance or by notice beforehand? What about exit fees? You have to able to ask all kind of necessary questions. It was stated that Bernard Madoff would never answer questions about his deeds. It’s now visible why.

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