Labor & Employment Law

Four Simple Things all Investors can do to protect against stock fraud

By Dobin & Jenks

As we speak to Clients and give Seminars we are constantly asked "How can an investor preotect themselves against Stock Fraud?" Here are a few points that anyone can remember. Please feel free to share them with loved ones that are consistent investors. Enjoy...

1. Read your mail. Account statements are confirmations are sent for a reason. If the value of your account dropped or grew more than expected, read the prior month?s statement and try to figure it out. Ask your broker for help. If the broker won?t help, get a new broker

2. Diversify your investments. No matter how much your broker says ?This is great? don?t put all your money in one place. No competent money manager does this. A private investor shouldn?t either.

3. Be proactive in dealing with your investment professional. A broker is supposed to make recommendations that are appropriate for your situation. If you?re uncomfortable and want to stay with that firm, talk to the branch manager. If you want to leave the firm, do it.

4. Remember that an investment that sounds too good to be true, isn?t true. All of the Ponzi schemes that fell apart over the last year were all succeeding because people thought they were in on a ?secret? program that was always doing better than the market. It turns out there was no valid investment program. Experienced investors thought they had found the magic bullet. They should have known better. They forgot this basic principle.

Full post as published by The Law Planet Blog on June 08, 2009 (boomark / email).