Saturday, December 29, 2012

Detecting Ponzi Schemes


Sometimes it’s not easy to protect against Ponzi frauds, despite what the media tells you, after they are revealed. The SEC often fails to discover them in time.

But there are basics you can follow to reduce odds of falling into traps that entice scams.

A basic way to avoid investment frauds: Stick to plain investing vehicles from low-cost, investment funds. They are the ones with the lowest-cost management fees, who have been in business for years.

Avoid those who appear to pay off far better than the low-cost investment funds. And hotshots who get publicity from ignorant or complicit “friends” or from media public relations. (See the Earl J. Weinreb NewsHole® comments and @BusinessNewshole tweets.)

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