Investigate before signing anything. It is better allow to time to "think about it", with business card in hand, to identify a future contact.
Ignore the sympathetic appeal to prejudice.
Misinformation from any so-called promoter, plays upon the prejudices and emotions of any sales prospect. The "cry for mercy" is a method of "collecting sympathy" for the fund-raiser. Always confirm that they are registered with the government so, any receipt they issue can be tax deductible.
Beware of prominent name droppers.
Names and endorsement of prominent men and women carry weight in any decision. They are often used without authorization. Look beyond and investigate the merits of the issue or transaction involved.
Shy away from ground floor opportunities.
Participating syndicates, special allotments, founder's shares are just a few of the fakir's lures to rush you into an decision you may regret later.
Avoid so-called insider information.
Inside tips are usually expensive pieces of confused misinformation referred to as "Confidential Info", used as a decision to influence the small investor. A screening of newsletter content is necessary before investing.
Newspaper information sourced by (AP), (CP) or Reuters, has been confirmed and is usually safe to make a decision on. Decisions cost money so, be informed.
Watch out for deceptive comparative figures.
The fabulous returns that could have been realized from an investment of 100 to 500 dollars, in the early stage of the investment of some enterprises, that have now reached outrageous proportions, are used by the promoter to direct attention to their new issue - unrelated. Such figures fire the imagination but they are generally deceptive and fail to mention the financing, management, property, potential profit, etc.
The Fictitious Stock Advance
Promoters advance the price of stock market shares creating buying excitement to give the appearance of increased value. This scheme works better when backed by news on the airways or in print. New buyers help keep the promotion alive by keeping those who already bought satisfied. Thus, induced new buyers jump in before the next rise in value - which only happens after so many stocks and shares have been sold.
Hang up on telemarketers without references.
Misrepresentation over the telephone is easy for the vendor. They can hardly be held for lying. The telephone is indispensable in the transaction of legitimate business. It is also a convenient cloak for the swindler to use. Beware.
Ask for the irresponsible guarantee.
Guarantees mean "squat" unless they are in writing and even then, a lawyer will tell you they are limited to the financial responsibility of the maker of the guarantee. When they guarantee something in the future like, profits will be made, dividends will be paid or even that they will buy back or resell the shares for you when ever you want well, it just sounds to good to be true and questionable.
Question reorganization mergers of near bankrupt companies.
Reorganization means failed corporate success. Stockholders are the target of funding requests. In the hands of people with unquestioned integrity and ability, appeals for funding means throwing good money after bad money into the bottomless pit of debt.
Cross-examine any real estate's false sense of security and need for private information..
Experienced opinion, supported by impartial-gathering facts, form the only basis upon which to buy real estate, especially sight unseen.
Evaluate mining promoters financing propositions.
It takes a very large amount of capital to finance a mining property from exploration through development to production. Bringing its production to a point where it will pay an honest dividend to the stockholders, does require some speculation ( buying low and selling high ) on the part of the investor, based on current events in the industry.
Question risky oil speculation.
All risks are taken with the stockholder's money, while the promoters fiscal agents and salesmen pay themselves handsomely through commissions, organization, salary and stock sale expenses.
Avoid invention delusions.
Thousands of useless patents litter the Patent Office. Prerequisites for any sound investment requires safety of principal ( requiring company assets ), satisfactory income ( records of earnings and dividend payments ) and saleability ( price fluctuation of the stock in trade ). Consultation of a reputable agency is also mandatory as they are employed to buy and sell the investment.
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