How to Avoid the Biggest Investing Schemes and Rip-Offs! - Cabot Wealth Network

How to Avoid the Biggest Investing Schemes and Rip-Offs!

Protect your money and investments by avoiding schemes and rip-offs—when you read the May 2022 issue of our magazine, just released!

May 2022 CMC Magazine Cover-CMC_042022

Since the market bottom on March 6, 2009—when the Dow Jones Industrial Average sunk to 6,469.95—investors have lined their pockets with lots of coin. Sure, COVID sent the markets reeling—down to 19,173.98 on the Dow in March 2020—but since then, boy, have we recovered! Despite recent volatility—due to rising interest rates and inflation, as well as the war in Ukraine—the Dow is getting close to breaking records again, closing at 35,116.35, as I write this.


And while I love a bull market, I’m really excited that retail investors—that’s you and me—are coming back to investing in force. From 2010-2020, BNY Mellon reports that retail investors owned just 10-15% of the overall stock market cap. That rose to 20% in 2020, then fell, and now, is close to 25%. As you can surmise, the other three quarters of the market is held by institutional investors—mutual funds, hedge funds, ETFs, pension funds, insurance companies and banks.

But what’s even more amazing to me is that with 3,435 investment firms, 617,549 registered representatives, and around 395 million shares traded daily in the United States, the Securities and Exchange Commission (SEC) only filed 697 new enforcement actions in 2021—up 7% from the year before. But as you can see in the chart of the Top 10 complaints below, there were a whole lot more complaints received than actions filed.

Top 10 Complaints to the SEC in 2021


Read the feature article in this month’s magazine now to learn all about the biggest investing scams and how to avoid them.

Here is a summary of 12 scams you should avoid, all covered in this article:

  1. Churning: This can happen with individual stocks, funds, or ETFs, and a bad broker is the source—get some good advice about avoiding this money-sucking trap.
  2. Unsuitable Investments: Irreputable advisors can get you caught up in investments that don’t’ fit your financial objectives. How to spot and avoid this scam.
  3. Hidden Referral Fees: While heavily regulated by the SEC, referral fees can dip into your own money—you should learn how to select an investment professional with your needs top-of-mind, not one willing to pay a hefty fee to someone who referred you.
  4. Hidden Expense Fees: Learn how to uncover these types of hidden fees that can ultimately reduce any gains that your investments have made.
  5. Promoting or Hyping Invest Firm Underwriting Clients: Despite laws separating investment bankers from research analysts, investors like you should be vigilant about digesting analyst reports—watch out for hidden motives!
  6. Pump and Dump: False, misleading, and greatly exaggerated statements are at the root of “pump and dump” schemes—find out how to avoid these types of schemes when you read this article now.
  7. Selling Dividends: Mostly just a fast-commission scheme for unsavory brokers, find out how this works—and how to avoid it!
  8. Withholding Recommendation to Invest at Breakpoint: Beware unscrupulous brokers who make recommendations to boost their fees—here’s how to avoid this scheme.
  9. Ponzi Schemes: Who hasn’t heard the term “Ponzi Scheme?” Find out exactly how it works—and how you can steer clear of these “too good to be true” scams.
  10. Forex Scams: These scams involve trading foreign currencies with promises of high returns or once-in-a-lifetime gains, mostly using social media ads and fake websites to lure investors. Get details on the 6 most common Forex scams—and how to avoid them!
  11. Precious Metals Scams: With slick sales pitches, offer guarantees, and high sales commissions, scammers in this area sometimes escape detection because metal dealers around the world are not often as regulated as they are in the U.S. Get advice about how to avoid these scammers—in this article now!
  12. Cryptocurrency Scams: Any new investment type can be a breeding ground for rip-offs and scammers. Here’s how to spot the scams—and tips on avoiding them.

You should follow our 3 main tips for avoiding all fraudsters—and ask 6 specific questions of your broker, to ensure you being well served. Get all this advice in this article now.

Read this article now to learn all about avoiding investing schemes that are out to grab your money—and get everything else in this issue of our magazine, including:

This latest issue of our Magazine is ready for you to access now, to find out how to avoid getting ripped off by investment schemes … and much more.

Start reading all of the articles in this issue of our Magazine today!


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