A new year has opened, and what better way to start it than investing your money in the right place, thus securing your future. But, take heed – there are a lot of scammers out there, lulling victims into dumping their money into the wrong hands. How do you protect yourself? Here are 7 tricks you can do to avoid investment scams.
Do a background check
The first thing you do in every business venture is to conduct a background check on your future business partner. In the same way, if you are going to invest your money in a company, it’s best to make sure that the company is real, reliable and resilient – the three R’s of a great business company.
Don’t judge a book by its cover
In other words, don’t let that flashy smile and expensive-looking suit disarm you. First impressions do last, but don’t let this be your only impression. Scammers are natural charmers and have been trained to make you say “yes”. Break the charm and listen carefully, which is, incidentally, the next trick.
Listen carefully to what the salesperson is saying
If the salesperson uses too much jargon on you, he/she is usually covered up for something. A good salesperson can use simple and concise words to drive the point and convince you. Mutual understanding is also a great foundation on any investment. Listen carefully and ask questions; a great investor is one who understands what happens to his money.
Watch out for perfectly consistent returns
One of the things that revealed the truth behind the Mad off scam was the consistent reported performance while the market was erratic. Investments should never guarantee you perfect and quick returns because it all depends on the market activity. What the company should promise you is the assurance of security of your money, no matter what happens.
Ignore deals sent through emails and text messaging
Special deals and packages are making their way in your spam folder and filling up your phone’s inbox. Just ignore these deals. Any respectable company would never invest on something as arbitrary, “random” and informal means such as text messaging and email, unless you’ve already had business with that company.
Always check for documentation
It’s not enough to listen to the salesperson as he/she talks. Ask for documentation, even after the deal is done. Transparency is the key to any great business relationship. If someone tries to sell you a security with no papers to back it up, then he/she might be selling unregistered securities. Also check if the stocks being sold have stock symbols.
Stay away from the pushy salesperson
You’ve already said that you’ll think about it, but this salesperson is still nagging you about the “last two slots” his company has. Aside from being exceedingly annoying, these people might be pushing too far to hook you into their little scam, so watch out. A great salesperson is never too pushy; he knows when to back down and when to strike.
You can never be too sure of anything nowadays, with frauds and scammers lurking at every corner. The best way to avoid scams is to do your own research – do background checks, and ask help from credible agencies like FINRA to know which companies are the most reliable ones. After all, your future is at stake here, so there’s nothing wrong with being overly prepared and extra careful.