If An Investment Sounds Too Good To Be True, It Is

When will people learn if something sounds too good to be true, it probably is?  A Santa Ana insurance agent and Irvine securities lawyer allegedly took investors for more than $40 million.  Multitudes of small investors claim they

“…were promised returns of up to 40% through a sophisticated investment strategy usually reserved for hedge funds and other Wall Street big boys. But of all the money that James R. Halstead and Jeanne M. Rowzee solicited for Private Investment in Public Equities, or PIPEs, they placed exactly zero in the esoteric transactions, investors allege.”

Fifty-nine year old John Rogers Sr, an Arizona commercial real estate agent, claims to have lost over $1 million just a few years before he planned to retire.  It’s not likely to happen now.

How do you keep from being  a victim of this sort of fraud?  It’s easy.  Never invest in ANYTHING you don’t completely understand.  Do not take anybody’s word the investment is a “sure thing”, no matter how impressive their credentials and no matter how well you think you know them.  Be wary of the phrase “just trust me”.  Usually, that’s the phrase you’ll hear right before somebody tries to screw you out of your money.  Large investment returns don’t come without large risks.  Never.  Under any circumstances.  Period.  No exceptions.  No, not even that one.  If anybody claims they can get you a return above what CDs at the bank are paying without any risk, run away as fast as you can.  They are lying.  They are trying to take your money.

There are no exotic, risk-free strategies available only to Wall Street pros.  They don’t exist.  Never buy an investment from somebody who called you randomly on the phone.  If their investment is so great, why do they have to spend all their time cold-calling strangers?  The answer:  it’s a scam.  Remember, if an investment sounds too good to be true, it is.  Use your common sense or you risk ending up like John Rogers Sr.