7 Questions You Need to Ask Yourself Before Investing

(from www.forbes.com 10/20/14)

White-collar crime can and does pay — and it pays because of you. To prevent you from becoming a victim, we’ve pulled together seven questions to ask:

1. Is the broker or adviser using high-pressure sales tactics and telling you that you must invest right now?

2. Is the broker or adviser pressuring you just as you are dealing with a dramatic life change, like the death of a loved one, particularly a spouse who handled the household’s money? (People are very vulnerable after the death of loved ones.)

3. Is the broker or adviser telling you the investment has a no-risk, guaranteed return of 10%, 15% or higher?

4. Can you find information about the broker or adviser and his firm at public websites such as www.FINRA.org, www.cfp.net or www.sec.gov? (If you can’t, you should probably stay away.)

5. Does the broker or adviser say the investments or strategies are too complex to explain or that they’re top secret?

6. Is your investment adviser too perfect? Like Madoff, is he or she generating returns that closely resemble each other year in and year out regardless of the market’s fluctuations?

7. Did the investment “opportunity” come through email? Increasingly con artists use that method of communication to target victims, the SEC warns. If you receive an unsolicited email from someone you don’t know with a “can’t-miss” investment, your best move is to pass up the “opportunity.”