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Educational Consumer Tips

Invest Wisely

Author: Better Business Bureau

Invest Wisely - Investment Opportunities Milwaukee, Wis. -With the start of the New Year, many people will resolve to improve their financial security by taking advantage of investment opportunities. To steer clear of risky ventures, the Better Business Bureau is urging would-be investors to carefully evaluate the investment product or program, its promoters and its sales pitch. "Every day, the Wisconsin BBB hears from consumers who invested in what they thought were solid and sure money-makers. They abandoned their common sense and succumbed to enticing promotions that were short on details but long on promises of high yield returns," said Randall Hoth, president and CEO of the Wisconsin Better Business Bureau. According to Hoth, investment schemers frequently try to peddle products using sales pitches that are "tied to the headlines." Recent suspect promotions include oil-and-gas schemes (higher gas prices are on everyone's mind), bird flu stock scams (from companies claiming to have products to fight bird flu), "get rich quick" real estate investment seminars (to take advantage of soaring housing prices), advance stock notifications for Mexico-based companies (to serve growing Hispanic populations), and investment pools (to help hurricane and tsunami victims). To avoid falling victim to fraud, the BBB advised investors to be particularly cautious of any of the following red flags: * Words like "risk free," "guarantee," "high return," or "limited offer." According to government regulators, no financial investment is "risk free" and a high rate of return means greater risk. * Offshore scams and investment opportunities in other countries, particularly if they claim to be "tax-free" and "confidential." If you send your money abroad and something goes wrong, it will be particularly difficult to locate your money. * Promises of "quick" profits or "fast" cash, "ground floor" opportunities, offers to share "inside" information, and pressure to invest immediately because the "market is moving." * Spam emails that lure you with subject lines, such as "Hot Stock Tips". Before making an investment decision, get the facts in writing, Hoth said. "At the very least, you should obtain and verify the following information: * If the investment and seller are licensed and registered. Check with the U.S. Securities & Exchange Commission ( and the Wisconsin Department of Financial Institutions (WDFI) - Division of Securities at * If there is a record of complaints about the promoter or the investment company at the BBB, the SEC or WDFI. * The costs to buy, hold and sell the investment. * The risk that you could lose the money you invest. * The rate of return to expect on your money and when. * The company's headquarter location, how long it has been in business, and its product or service. * What the promoter is being paid to tout the investment opportunity. In addition, the BBB advised investors to always request and carefully read through financial information about the investment, such as a prospectus, annual report, offering circular and financial statements. "Compare the written information to what you were told or read online. Watch out if you are told there is no such information available," Hoth said. For more information, contact the Wisconsin BBB at 414-847-6000 (metro Milwaukee), 1-800-273-1002 (elsewhere in Wisconsin) or The Better Business Bureau serving Wisconsin is a nonprofit organization that brings decades of experience in fostering ethical business practices; providing dispute resolution alternatives; offering consumer and business education; and promoting customer service excellence. Our Reliability Reports provide the general public with critical information about companies both locally and nationally.