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.
Airbnb cleaning service Arlington Heights ..When we go to the circus we see a trapeze... Read More
One of the basic laws of physics is that a... Read More
One of the basic laws of physics states that a... Read More
Well, not really. What I mean is I don't mind... Read More
Let's first define insanity. It is doing the same thing... Read More
Why? Because I am going to shatter your conventional wisdom... Read More
Before you embark upon a journey of trading stocks or... Read More
If you haven't heard of the technical indicator with the... Read More
The Surgeon General of the United States says that smoking... Read More
Have you been listening to the talking heads on CNBC-TV?... Read More
Have you ever thought of investing? Do you have a... Read More
The thinking process of the brain relating to the... Read More
One of the great truisms of Wall Street is "Don't... Read More
Sometime in the third quarter of 1997, someone told me... Read More
You remember (they show it on TV every year) the... Read More
Let's go into the details of why non-indexed mutual funds... Read More
The spring-loaded rat catcher is the ultimate low-tech device invented... Read More
The Macedonian Stock Exchange (MSE) is not operating successfully. True,... Read More
Money management starts with protecting your capital, realizing profits and... Read More
The stock market has been going up for more than... Read More
On the 40 year journey through the turmoil of a... Read More
Stock trading can be a very profitable activity. You can... Read More
As I said in Part I everyone in the insane... Read More
When it comes to mutual funds, there is a lot... Read More
You may have wondered why your mutual funds have been... Read More
reliable maid service Winnetka .."There is nothing more frightful than ignorance in action!" Johann... Read More
Are you paying any attention to your retirement savings? Do... Read More
1. Do not spread your money too thin.My friend has... Read More
You read and hear a lot about hedge funds. Unfortunately,... Read More
Fundamental analysis.Fundamentals analysis says the best way to predict the... Read More
The stock market has been in an up trend for... Read More
If you have been dealing with mutual funds for any... Read More
Caught in a whirlpool and being sucked under. No life... Read More
Professional stock options traders use the term lean to refer... Read More
Every Wall Street analyst, financial planner and broker will tell... Read More
Index Fund Trading can be one of the most profitable...or... Read More
Whenever I see mutual fund comparisons in the trade publications... Read More
There is a current movie entitled "Eternal Sunshine of the... Read More
Has your broker been calling you recently with the "great... Read More
The Shadow knows. Remember him? It seems a shadow has... Read More
You have a lock on your house. You have a... Read More
Unfortunately, most of you who are reading my column are... Read More
Never lose money in the stock market again. Yeah, I... Read More
What a great statement!I just heard someone use it in... Read More
As I have said many times before in this column... Read More
Why? Because I am going to shatter your conventional wisdom... Read More
Are you attracted to the idea of being in control... Read More
There are major differences between trading stocks and trading futures.... Read More
The stock market has been going up for more than... Read More
Hedge current portfolio positions and gain access to capital resources... Read More
Stocks & Mutual Fund |