Six tips to scam-proof your investment approach

Below are six tips to scam-proof your investment approach and what to look out for when considering a new investment:

1. An investment that requires you to recruit new investors in order to realise the return on your investment is a pyramid scheme. Be wary of tiered investments that classify investors or have multiple levels (e.g. bronze, silver, gold, platinum and diamond).
2.  If you don’t understand how an investment product generates its returns and there are no clear underlying assets you should be cautious.
3. . Fraudsters want to create a sense of urgency to limit the amount of time you spend researching and thinking about the potential investment. Anything sold as a “once-in-a-lifetime opportunity” should be avoided
4.  Consider financial service providers with decent track records. Most scams will promise great returns, without a solid track record to back them up.
5.  If the investment is not registered with a mainstream financial body, like the Financial Sector Conduct Authority, it is not regulated. You should also contact financial bodies to verify the registration of any financial entity that is relatively new or not well established.
6.  The adage still applies: If it seems too good to be true, then it probably is. Trust your gut – it will help you avoid permanent capital loss. Always consider expert advice.
   
   Many investors, whether starting their journey or heading into retirement, fall prey to scammers because they do not have a solid financial plan. A good, independent financial adviser will explore your unique set of circumstances and implement a long-term investment strategy to help you reach your financial goals.
   
   Read the full article: https://www.allangray.co.za/latest-insights/personal-investing/the-dangers-of-social-media-financial-advice/ 

June 08 2021 By allangray.co.za