Stock investment advice is easy to find. Do you get cold called by brokers with the latest investment tip? I have, as have countless others around the globe. And many of us have lost a lot of money to these people. So, how can you avoid some of these pitfalls?
In general, if you get cold called by anyone, the best stock investment advice that I can give you is to leave them alone, no matter how appealing, or how plausible the sell is. Many of the people and firms who operate in high pressure sales environments, operate outside the law. And these people usually start with a cold call.
If You Are Cold Called, Steer Clear - Rule 1.
Remember that the tactics used can be very cunning.
It is not unusual for disreputable firms to start gently. They will warm you up with a 2 minute call, which invariably will get you excited at the prospect of making some money, on the basis of a deal "which hasn't come off yet", but they will call you if it does.
And it will.
And so will they!
They often quote shares which are listed, usually on the nasdaq, and it is within my experience for this to occur whilst the price of stocks rises as predicted. Believe me when I say that I was caught, and the the stock prices were being manipulated (this was the subject ultimately of an SEC investigation).
Double Check All Information You Are Given - Rule 2
Another favourite ploy of the crooks is if they know you have previously bought shares which are worthless, they will come up with some cock and bull story about a takeover or a similar machination, and offer ridiculous amounts of money for worthless shares. All YOU have to do is pay a fee to release the funds.
And guess what.
You will lose more money!
If It Sounds Too Good To Be True - It Probably Is! - Rule 3
If you are contacted by anyone you don't know, contact your local regulatory authority, and check them out. If the broker is not known to them, stay clear.
Ask Your Regulatory Authority - Rule 4
Ask at the outset if the stocks being peddles are restricted. Most of the cases I have come across where victims have been defrauded, have involved the infamous regulation S stocks. If the stocks in question are regulation s, and you might have to push the point, then don't get involved.
Ask If The Stock Is Regulation S - If They Are - Run - Rule 5
For many of us, this advice will come too late, and we have already been caught. If so how do we know we have been caught, and can we complain?
There are certainly some questions that one can ask oneself which, can help make your mind up if you might have been caught. Ask your self the following, and see if the scenario applied to you:-
1. I didn't understand, and it was never explained to me, that the shares I was buying could not be sold for at least one year and possibly longer.
2. I didn't understand, and it was never explained to me, that the shares I was buying were not traded on a proper stock exchange and might never be traded so might never be sold.
3. I didn't know, and wasn't told, the extreme risks associated with Regulation S stocks, up to and including a swift loss of up to 100 per cent of my capital.
4. My personal finances and my investment needs make me unsuitable as a buyer of Regulation S stocks (e.g., because I have a modest income and cannot afford to take risks, I am elderly and cannot afford to wait in the hope shares will be quoted in the future, I am retired and cannot replace lost capital).
5. I would never have agreed, had I known, to an investment where the company whose shares I was buying was actually making a very large payment to the broker. This would have destroyed any feeling that the broker was making a recommendation for my benefit and not in return for payment.
6. Sales calls from the broker were very enthusiastic and almost promised big, fast profits; this was misleading.
7. The broker never recommended 'normal' shares to me, but only Regulation S stocks, as if these were the only shares suitable for my needs.
8. Every Regulation S stock I was sold (or almost every one) collapsed and became worthless or near worthless. The law of averages suggests this is not just bad luck but bad skill on the part of the broker who recommended every one of them so enthusiastically, and made a profit on each sale.
Some of you reading this might think that this is flight of fancy stuff. Well, I can assure you that it's not. This is the real world, and real people get hurt.
Robin Banks has been a victim of investment stock fraud, so is well placed to give advice to others on how to avoid it.
no-contract cleaning service Mundelein ..Have you bought any mutual funds this year or late... Read More
Are you one of those many people who dread reading... Read More
Duck! No I don't mean a quack, quack. I meant... Read More
I have a 2-car garage. There are nice shelves on... Read More
This is the continuing story of our two imaginary traders,... Read More
The greatest stock market myth is the idea that investing... Read More
How many times has this happened to you? You're at... Read More
How do you make money without picking tops and bottoms?I... Read More
Very few people, even professionals, have heard of the Dalbar... Read More
The stock market has been in an up trend for... Read More
A 'stock option' is a contract between two parties giving... Read More
The demand for world oil is increasing while world reserves... Read More
Stocks breakout from properly formed bases everyday but many investors... Read More
Yesterday I received my monthly issue of MONEY magazine. This... Read More
Let's first define insanity. It is doing the same thing... Read More
What is leverage?Here is a definition of leverage from an... Read More
Are you paying any attention to your retirement savings? Do... Read More
When is a dividend not a dividend?The latest thing "conservative"... Read More
This is the continuing story of our two imaginary traders,... Read More
On November 17 I bought 7 different mutual funds and... Read More
The debate rages all over Eastern and Central Europe, in... Read More
The ABC's of Stock Trading SuccessStock trading success...why is it... Read More
When is a dividend not a dividend?The latest thing "conservative"... Read More
"There is nothing more frightful than ignorance in action!" Johann... Read More
Spread trading is a technique that can be used to... Read More
maid service near Glenview ..I go to the Money Show every year to visit... Read More
Ever notice how behavior in one area of life can... Read More
Question: How does it get better when it gets worse?Last... Read More
Several times each month I am solicited by various market... Read More
What does it take to be a stock trader? It... Read More
Investing in long-term financial vehicles give you the most gains... Read More
You probably have been told that options are risky. Even... Read More
Never lose money in the stock market again. Yeah, I... Read More
What are you thinking when it comes to your no... Read More
It's about time someone spoke the truth concerning outsourcing. The... Read More
Recently I was invited to appear on a live CNNfn... Read More
Everyone who follows the financial news has heard of mutual... Read More
Are hedge funds a suitable investment for you? Hedge funds... Read More
TOO OFTEN, INVESTORS SIMPLY CHOOSE TO follow the crowd. This... Read More
The basis of diminishing return discussions surround such simple notions;... Read More
Stock trading can be a very profitable activity. You can... Read More
Has your broker been calling you recently with the "great... Read More
One of the basic laws of physics states that a... Read More
If you want one.And I don't recommend any broker with... Read More
Recently I watched my favorite football team lose a vital... Read More
Picking a beaten-down stock requires a different kind of selection... Read More
Just 30 years ago the stock market was a shadow... Read More
I'll bet with almost anyone that has stocks or mutual... Read More
An insane person cannot evaluate an insane evaluation system.As you... Read More
Ever have one of those sample boxes of candy? Each... Read More
Stocks & Mutual Fund |