Victim Proof

The best defense against investment fraud is to teach yourself to become victim proof. Investment con artists do not break into homes. T

hey do not pull a gun on their victims and demand their money. Instead, they get people to give them their money...voluntarily! Most investors are at risk of victimization simply because they lack information about investment choices and are unaware of how to evaluated investment opportunities. The following four key steps will help you protect your money:

*Stop and think before acting. Never invest merely on the basis of a sales pitch. Get written information and evaluate it. Remember that the person on the other end of the phone is a salesperson even if he or she is a stockbroker, investment adviser, or has an impressive title. The first priority of people who sell investments is to make money for themselves and their employers, it is not to ensure the investor's financial future. That does not mean that all people who promote investments are dishonest, it just means that their goals may not be the same as the investor's.

*Study the deal--and get input. Read the material about the investment to determine how it is supposed to make money. Seek the counsel of someone such as trusted broker, accountant, banker or an experienced investor who is more knowledgeable. Never provide pesonal of financial information like bank accounts or credit card numbers to investment telemarketers even if they pressure for it. If the caller is legitimate, the deal will still be available after thoroughly checking it out.

*Stick to what is clearly understood. Consumers need to stick with investments they understand, particularly when it comes to the potential risks or rewards. They shouldn't get caught in the trap of trusting a salesperson who claims to understand it all and promises to take care of them. It's important to not sign papers before reading an understanding them- a lawyer or another investment professional should answer any questions concerning the agreement before signing.

*Apply critical-thinking skills. You should ask yourself: Does what I am being promised really make sense? Although there are government and industry regulatory offices that actively oversee the investment marketplace, the best forms of protection are good critical-thinking skills and a sound decision-making model to determine the legitimacy of any investment oportunity. Ask common sense questions about the nature of the investment: Where exactly is the money going? How much will the salesperson get in fees or commissions?; What is the track record of the investment? Don't sit still for mumbo-jumbo or double-talk. When it comes to financial assets, the only dumb questions are the ones not asked.

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