Summarize the following:
Many bad investments involve unregistered securities. These include stocks, bonds, hedge funds and more. Do your research. In the U.S., you can check with the Securities and Exchange Commission (SEC) to see if something is a registered investment. The contact information is as follows: North American Securities Administrators Association or (202) 737-0900. You can also check the website at: https://www.sec.gov/. Ask the promoters of an investment if they are licensed to sell that type of investment. Contact a state commission office, a state's Secretary of State, a Corporations Commission or Securities Commission. A business should be registered with one of these entities. Stay away from investments with no documentation. That is a sign that it may be unregistered. If a person is pressuring you into investing as soon as possible, beware. It is not common practice for legitimate brokers or other people who help investors to be aggressive in their sales practices. People who push too hard may have a hidden agenda. Remember to be cautious when considering any investment. Once you give someone your money, you may not get it back. Make sure the salesperson and the company or firm he represents have never had any problems with criminal activity. Make sure both have a clean record. You don't want to be involved with people or companies that don't have a good reputation. They have not done business "by the books" in the past, they probably won't when it comes to handling your money. Remember that people operate under aliases. It is important to find out someone's true identity. Do not trust the claim that a number of seemingly reputable people have already invested money. This is a tactic used to get you to feel that you can invest safely because others have already done so. People who use this tactic will also tell you that these people are making money off of their investments. Here, an offer of a favor like selling to you at a lower price is made in exchange for you to buy now. You need to ask yourself why someone would be that desperate to get you to invest. Using this tactic is a sign that the sales person is only interested in getting you to invest and does not want you to walk out the door without doing it. When you are made to believe that "there aren't enough" spots for investment to go around, red flags should go up. The urgency created by this tactic is meant to get you to invest quickly. Remember, unscrupulous salespeople will use any tactic to get your money. When you hear that there just isn't enough investment opportunities for everyone, that is a sure sign that someone is trying to defraud you. This person will make statements like, "As the CEO of XYZ, I can assure you the investment is sound." This tactic is called "the source credibility tactic." The idea is to create a sense of credibility so that you will trust them. Remember that it isn't wrong to let people know that you are high up in an organization. Many legitimate people do this for the credibility it gives them. Be cautious if the person seems to be overly relying on these claims or pushing you to invest. Research the person to see if their claims are genuine.
Check to see if a product is registered. Avoid pushy salespeople. Check for a criminal record. Take note when the investments of others are mentioned. Pay attention to offers to do something to get you to invest. Do not fall for the urgency tactic. Be suspicious of someone claiming to be of significant importance.