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Preventing Investment Fraud

If you are new to the investing world, there are people out there who will try and scam you. This is true with every aspect of life, and the world of investing is no exception. If there is money to be made or stolen you can rest assure there are crooks out there trying to find a way to steal yours.


There is no safer place than to keep your money in a savings account at the local bank. As long as the bank is FDIC insured your money will be protected by the government. A limit of $250,000 does apply to these types of accounts. So if you have over that amount you should not place all of it in the same account. A savings account is a type of investment because your money is earning interest as it sits there. The bank will use it to make loans and give you a specified percentage rate in return for letting them use it. At the moment rates are not that favorable and many are considering other investment options.


Placing your money with a stock broker is another alternative. There are many online brokers that will allow you to direct your funds into a variety of different asset classes. When looking at a broker make sure that they too offer insurance from SIPC. Brokers who will not insure your accounts can potentially be scams that will take your money and run. Using a broker based in your own country is also advised. If the broker asks for money to be transferred to an overseas account, red flags should go off in your head. There are many reputable brokers here in the U.S. that are available to the retail investor. Going online and researching the various brokers that are available is a good idea. Many will have both full service financial advisors, to help you out, or let you choose the stocks you would like to buy yourself. Your investment experience and knowledge will help you make the decision as to how much help you require form your stock broker.


Like stock brokers, currency brokers will offer you as an investor the opportunity to invest in the currency markets. There are many online foreign currency scams on the internet, mostly revolving around computer programs that will make you money. Please do not trust these money making systems, as they will not make you the money as promised. The same basic principles hold true when trying to find a good currency broker. Do your research online and read the many forex broker reviews that are available. These reviews will help you to see the pros and cons that other investors had with the brokers that are available to the retail investor. Make sure your broker, either stock or currency, has representative available for you to speak with by telephone. Making sure that there office has a building headquarters is one way of making sure that the broker is legitimate. As mentioned before many of the scams revolve around brokers that work from third world countries and offer no brokerage service at all.


Giving your money away to someone who claims to be an investment advisor can also lead you to lose money. Besides the various brokers that are available to the retail investor there are other types of investments, such as hedge funds. Hedge fund can promise to offer greater returns, however they do not always do this in reality. These funds are the riskiest types of investments when it comes to fraud. Make sure you know of other investors who have money with the fund before you invest any of your own. The fund manager can be gone the next day with your cash never to be seen again, it has happened before and will most likely happen again. If you take your time and do the appropriate research there should be no issue on how reputable your local bank, broker or fund manager is. If as an investor you do not feel confident or comfortable giving your money to a particular institution then do not do it. Ask as many questions as you need answered for them to earn your business

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Trading Solutions That Can Help

The three indicies lost just over 1% each on Tuesday. The DOW slipped 96.50 points to close at 9241.45, the S&P 500 shed 12.75 dropping below 1000, and the NASDAQ finished the day at 1969.73 after losing 22.51 points. There were some great gains in some stocks even with the down day.
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The financial sector was the worst of the bunch today. I’m glad that I’ve pulled out of that sector a couple of days ago. I’ll wait for a healthy pull-back and jump in again.
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When I sit on the sidelines waiting to jump back in, I sometimes use the time to try some investing programs I’ve come across.
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One that I recently checked out is the free analysis trading software package from Trading Solutions. It can learn patterns from historical data and allows you to create trading systems that suggest when to buy and sell. The software works with stocks, futures, currencies (FOREX) and many other financial instruments.
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Download Trading Solutions and try it for free. Let me know what you think. As I continue playing around with it, I’ll report back on how I like it.


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