The state Department of Financial Institutions is reminding investors not to allow recent negative economic news and stock market volatility to lead them into high-risk speculative investments. Perpetrators of many fraudulent schemes use gloomy economic headlines to lure unsuspecting investors.
“Investment scam perpetrators stay current on economic news in order to seem more legitimate and believable to their victims,” DFI Director Scott Jarvis said in a consumer alert. “These predators will use investor fears to promote illegitimate schemes with promises of high return with little to no risk that, in reality, often leave investors holding nothing but empty wallets and drained bank books.”
Investors, especially those nearing or in retirement, should be skeptical of any recommendation to liquidate a well-structured, diversified portfolio to fund the purchase of an alternative investment product.