Nothing can be further from the truth. The Corporations Act requires that the prospectus must contain all the information you and your professional adviser need to make an informed investment decision about the company. In particular, it must disclose any risks associated with investing in the company and what its future prospects are. Although we recommend you always seek the advice of a professional investment adviser about whether to invest in a particular company float, the final decision to invest will always be yours. You should take the time to understand what the prospectus is telling you about the company and what it is not telling you.
Many companies are speculative .
Some will say in the prospectus that they propose to undertake high risk ventures which they anticipate will generate high returns but which could also fail. ASIC requires that if the directors regard the investment as speculative, they must disclose this in a warning on the prospectus. Other types of companies will stress that they can provide reasonable safety for your principal and an adequate return. The decision you will ultimately need to make is whether the company suits your investment profile. Often, you can only determine this by talking to your investment adviser.