Investment is always based on research and trust, but this does not make investors immune to investment frauds. Of course, you must be ready to take risks for you to invest. However, you should ensure that the risk is reasonable. Seniors all over the world are often the easy targets of investment fraudsters. Learning about these risks is one major step towards avoiding them. Imagine someone tricking you out of your hard-earned savings when you are already retired and you need a constant flow of income more than ever. Some of the signs you should watch out for are discussed below.
- No risk investments
If you come across an investment that is marketed by an individual or a company to have no risks but only high return, then you should be very careful. This is usually a clear sign of investment fraud because there is no investment with no risks. All investments have risks. So, anyone telling you otherwise is definitely wrong. In fact, there is a very strong relationship between investment returns and investment risks. Normally, an investment associated with high risks normally has high returns.
- A pushy salesperson
One common thing with all scammers is that they usually try to push you to make a fast or immediate investment decision. They usually want you to make these decisions before you realize you are being defrauded. No reputable and registered investment professional or company will push potential investors to make immediate investment decisions. A reputable investment broker will not tell you that you should act now. In case anyone tries to push you to make an immediate decision on a stock purchase or sale, then you should avoid them with their investments like plague. Such kind of pressure is never appropriate.
Guarantees of returns or profits are another clear signs of investment frauds. All investments have risks and there is no way someone can guarantee you that an investment will earn you high returns in a short while irrespective of the turbulences in the economic sector. Anyone who guarantees you that investment is going to perform in a certain way is obviously a con. Every type of investment must carry a certain degree of risk.
- Unregistered products
Most investment scams often involve unlicensed companies or individuals selling unregistered products or securities. Do your due diligence and find out whether the individual who is trying to sell you securities is licensed. If not, then he is a fraudster.