Red Flags to Look Out for Before Investing
The holidays tend to bring out the best of us, but also attract the worst crowd: scammers. From supply chain shortages to investment scams, the holidays bring out criminals with discrete ways to try to steal your hard-earned money and savings. We want you to have a safe and merry holiday season all year long and that means knowing when to spot a scam and avoid a loss. Here are 4 key things to ask yourself when approached by an investment group:
Are they promising unrealistic returns on investment?
If it’s too good to be true, it’s most likely a scam. Most scammers will overpromise high returns in a very short amount of time. It may be tempting if you are under difficult times, but you will end up losing more than you started with. Don’t fall for the get rich quick scheme. Good things take time and there is never a guarantee on investments.
Are they asking to pay for investments upfront?
This is a big red flag. Once you hear “To get started, please send $xxxx to this account”, block and run! You should never pay by credit card, gift card, or wire money abroad or to a personal account.
Are they Pressuring you?
A pushy salesperson is never a good sign. If someone is pressuring you to invest, chances are there’s something going wrong and they’re looking for someone’s money to help them fix it. Needless to say, a situation like this is unlikely to yield a positive return.
As an investor, it’s important to always remember that you have the upper hand and to not settle or be pushed into anything that’s less than perfect. Carefully evaluate the merits of the investment to ensure it aligns with your investment objectives and risk tolerance.
Is there a Paper Trail?
Before signing a contract, you should ask for financial statements or other types of documentation that better defines their business, its progress, and its projected growth. If there’s no paper trail or documentation, it’s likely that the business is either highly unorganized or a scam—without documentation, they’re less likely to be caught. Investing is an important and risky decision, so don’t be afraid to ask questions and do your own research. Is the investment registered or exempt from registration? Check the SEC’s EDGAR database or follow up with your state or provincial securities regulator.
Conclusion
Before making any financial decisions, ask questions, do your homework and visit the Investor.gov to learn about top investor threats, the Red Flags of Fraud, and how to contact your state or provincial regulator. If you pay attention to these 4 warning signs, you should be able to handpick businesses that will reward you handsomely rather than the ones that will take your money and run.
At Goldstalk, we hold ourselves to the highest standard of integrity and do our due diligence to inform others. We value our investors and believe in building trust between both parties is key to success. Goldstalk was formed specifically to invest in and source high-quality cannabis opportunities for ourselves and investors. To learn more and get started on your next investment, visit this page to get in touch. Call our offices at (310) 400-5599 for information about how to successfully invest in the marijuana industry.