30th May 2024

Better business. Better community

Business Industry and Financial

How To Avoid Different Investment Scams

 

Before you invest, you must be wary of the risks. It is so easy to fall into a Ponzi scheme or another type of scam where it can lead you to losing your money. Investing sounds great but when you read into it, it can be a very dark place, resulting in you losing your investment.

 

The problem many people have when investing is they trust people that claim to be “experts” in the market. The thing is, when somebody reaches out to you like that, it can be believable. Nevertheless, there are a few precautions to make sure you don’t fall for these types of investment scams.

Ask Them and Yourself Questions

Before you start investing with a stranger from the internet, you need to ask questions. You shouldn’t believe them straight away. They are hoping you don’t raise questions at the start and believe every word they say because a lot of people do believe them. Conduct thorough research on the individual who has reached out to you and question the investment. Ask them questions that would potentially scare off the scammer. The longer you procrastinate the investment, the more likely they will back off if they know you are not stupid.

Research Everything Before You Make Your Initial Investment

Understanding the company you are about to invest in is very important. At the end of the day, you will be giving them a lot of money and therefore, you need to check if everything is legit. Search for its financial statements to see if it has been a company for a number of years, see if there is potential with the company and make sure the person who has reached out to you is from that company.

Research The Point Of Contact

No matter how much the investment is, you need to ensure the salesperson is legit. Make sure they are real and they work for who they claim to work for. There is no harm in contacting the company yourself to ensure they are legit. Make sure they are in the company house so that the company work is also real.

 

Another thing to check is that the salesperson is licensed to sell those types of investments. Furthermore, you can make sure they are legit by checking SEC and FINRA’s online databases for free. There is no such thing as being too cautious when it comes to giving people money so make sure you investigate the individual as well.

 

Always Be Cautious Of People Reaching Out To You First

If somebody has reached out to you for this investment, you need to ask yourself why. Yes, salespeople do exist but, these can also be scams. If they are suggesting overseas investments, you probably want to stay clear of them as well. It could also be a pump and dump scheme for a forex trading scheme.

Summary

There are many questions you must ask yourself before you start to invest with someone that has reached out to you. Furthermore, you should always ensure that they are a regulated broker who has the licensing for this.

 

If you ever found yourself being a victim of an investment scam, you must contact an investment fraud lawyer. They might be able to retrieve your losses, especially if you have invested with a regulated broker.