BEING AN ALERT INVESTOR

Who Gets Victimized?

Almost anyone who invests is a potential fraud target, though you can reduce your vulnerability if you know what to guard against. One of the most basic cautions is not to be greedy. If you’re trying to get rich quick, there’s probably someone out there who’d be happy to sell you a scheme that sounds like the answer to your dreams. Making a killing on a “hot” investment is NOT key to a successful investment strategy.

If you’re extremely anxious about your financial situation, you may be more vulnerable to deception as well. That’s one reason that so many scammers go after retired people or those who’ve faced serious economic problems. While you don’t want to be suspicious of everyone, it probably pays to be especially careful of someone you don’t know, who claims an affiliation with you—through a military unit in which you served, a religious congregation of which you’re a part, the school you attended or any other relationship that you value.

Even if you’re just starting to invest, you may not be more vulnerable than people who consider themselves experienced. The key in either case is to learn as much as you can about how traditional investments work, ask lots of questions, do lots of research, don’t buy if you don’t understand the product or you don’t trust the person or firm selling it to you and always be on the alert for a possible fraud or scam.

Source: FINRAfoundation.org