Let the Buyer Beware: Spotting Scam Investment Sites
Investing seems like a great idea. After all, it’s one of the best ways to make it in this world and to build real assets that can provide for you for the long term. The trouble is, you need to find reliable information. How do you know that the website you just visited has reliable information as opposed to simply blowing smoke?
Here’s the bottom line. If you want to know for sure whether a site is reliable, there are only two sure ways to do it: either ask someone you trust for help or go ahead and do your own due diligence. Check who is behind the website and whether they have actual experience and or degrees.
Try to determine if they are there to provide legitimate information or just trying to sell you something. This doesn’t mean that someone selling something is necessarily unreliable; however, it does mean that you need to determine if they are willing to sell you something, anything, no matter what, or if they are trying to provide you with honest information in the hope of selling you something worthwhile.
The Wolf of Wall Street
Take for example the famous scene in the Wolf of Wall Street where Jordan Belfort is trying to sell some penny stocks to an unsuspecting person on the phone. He talks fast and sounds very persuasive while pushing what are essentially extremely volatile stocks that are unlikely to produce results in the long term.
This means that it’s not enough to merely take someone’s word for it or even to look at a website and try to decide if it looks “professionally made.” Obviously an amateur scam artist will have a poorly designed website, but there are plenty of people who create sophisticated looking sites which can mimic what the big guys look like.
How To Tell
One way to decide if a site is legitimate as opposed to simply trying to blow smoke is to check their back catalog of content. Do they have a variety of materials designed to help you to understand the market? Are they upfront about what they do and how much it will cost you? Many scam sites try to hide their fees and or information about exactly what services they provide because they are determined to hoodwink you with fast talkers.
Safe Haven Stocks
When all else fails, it’s often best to consider looking to so-called safe-haven stocks. While there are no guarantees whatsoever in the stock market, it can be a safer bet to purchase so-called “blue chip” stocks from major companies which are unlikely to end up declaring bankruptcy, taking your money with them.
For example, while there are no guarantees that a company like Amazon.com will, in fact, continue to thrive, it is generally a safe bet that you can expect that such businesses will be able to weather most storms. Thus, it can be useful to keep at least some of your money with a registered investment house in relatively “safe stocks.”
You can then focus on riskier investments with money that you can afford to lose, based on knowledge gained from reliable websites. This allows you to hedge against possible losses while at the same time maximizing potential gains.
Another excellent resource can be government oversite. While the government is obviously not aware of every possible scam site out there on the web, many do get reported to the FTC. These kinds of scams can be easy to spot once you know what to look for. Simply checking with the FTC before you actually put down any money can save you a significant amount of heartache later on.
Ultimately, the old Roman term, caveat emptor (let the buyer beware), applies here. It is up to you to make the effort to learn more about any company you plan to do business with so that you can avoid any possible hint of a scam. Take the time to learn about a company. Don’t feel pressured to make any immediate investments and you will do just fine.