We recently were approached by a supposed investment firm. A quick review of its website raised many questions.
It seems obvious to us that the whole outfit might be a scam. But we have studied the economy and markets for a lifetime. So we thought it might be useful to lay out for you the main clues that set us off.
The most notable thing is the use of jargon that sounds authoritative but is incomprehensible. We mean this kind of nonsense: “We create global allocation by opportunistically investing worldwide as an important element in the diversification of our portfolio.” “Generate and protect investor wealth through the long term differentiated returns offered by our unique investment management strategies.” Yeah, right.
The second clue is the lack of disclosures relating to FINRA or the SEC, the primary U.S. regulators of investment providers. These folks are neither registered to sell securities nor as investment advisors.
The third clue is the promise of high returns, which evidently are guaranteed. 12-20% annual returns sound pretty good, right? And different investment return options, guaranteed in writing? Be still, my beating heart!
The fourth clue is the promise that investments are liquid at all times.
We promise volatility, and make no guarantees. This is because we know that stability and investment returns are mutually exclusive—you must choose. Anything that is truly guaranteed carries a remarkably low yield, in our opinion. And anything that purports to offer the opportunity for high returns cannot be guaranteed.
The interesting thing is, that web site and those promises are up there for a reason—they work. People desire stability and high returns, and the knowledge they can get all their money back at any time.
Clients, if you ever have questions about something that seems too good to be true, PLEASE email us or call. You worked too hard for the money to let a scammer get it.
The opinions voiced in this material are for general information only and are not intended to provide specific advice or recommendations for any individual.