Discussion of Online Investing
Online Investments: Protect Yourself
Online Investments
When it comes to online investments, keep a watchful eye. The Web has many legitimate online investment opportunities, but it also plays host to some unscrupulous players. Unfortunately for potential investors, sometimes it's tough to tell the difference. Some fraudulent online investment promoters fool visitors through web sites that make their "investment company" look like a solid, top-rated Wall Street investment firm.
Other fly-by-night companies can feature slick-looking web sites that use graphics, audio, and even video clips. Still others pique your curiosity dramatic e-mail blasts offering a "ground floor opportunity," guarantees of big profits in a short time, claims that minimize or mask the risk involved, and lots of pressure to act now because the "market is moving."
Online investments that are fraudulent aren't new ideas at all, just the same old scam applied to a new medium. Other things to remember when searching out online investments is that: bulletin boards are can be dangerous because you don't know the identity of who is posting; newsletters are often written by paid promoters so be skeptical; spam isn't even worth the second it takes to hit delete; and if you encounter a scam, contact the SEC.
If you want to invest wisely in online investments and steer clear of frauds, you must get the facts. Never make an investment based solely on what you read in an online newsletter or bulletin board posting, especially if the investment involves a small, thinly-traded company that isn't well known. And don't even think about investing on your own in small companies that don't file regular reports with the SEC, unless you are willing to investigate each company thoroughly and to check the truth of every statement about the company.
For instance, you'll need to: get financial statements from the company and be able to analyze them; verify the claims about new product developments or lucrative contracts; call every supplier or customer of the company and ask if they really do business with the company; and check out the people running the company and find out if they've ever made money for investors before.
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