Be Wary of Investment Fraud in the New Year

Posted by: Sally S. | Dec 31,2007

In 2005, Americans lost more than $180 million due to online fraud. Before you invest in anything, do your research. What you need to know about investment fraud:

One of the biggest misconceptions I hear from people is that they believe that their investment portfolio is insured. That’s not true. Almost no investments are insured. So if you’re working with a broker who tells you that you’re covered by insurance, ask to see the insurance policy. If you’re told that your investments are covered by your homeowner’s insurance, check with your insurance agent. I can almost guarantee you won’t find insurance that will cover your entire investment portfolio.

Your insurance agent may not be the best place to look for investments. They get commissions like everyone else and though most insurance agents are scrupulously honest, some may recommend policies that won’t help you save money at the rate you want to save.

Before you invest in something sketchy, like a friend’s great idea for a money-maker, check with the SEC to make sure the person selling the product is properly licensed and that the investment or security is registered. A friend of mine got obsessed with a pyramid scheme a while back and kept trying to get me to invest. I didn’t, and she eventually lost everything she’d invested in the scheme.

Learn more about saving for the future by investing your money.

 

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