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Investors-Be Alert, Invest Wisely

Last year, as the sock market was recovering from the financial collapse, the stock market was rocked by one of the largest investment scams of all time. Bernard Madoff, a former chairman of NASDAQ, was convicted of stealing billions from investors through his New York based investment firm. Both the retail public and supposedly sophisticated institutional investors were caught up in the losses, which totaled as much as $50 billion over two decades. Closer to home, the Twin Cities area learned of a multi-billion dollar Ponzi scheme that was run by Tom Petters and his operations, with similar disastrous results.

Ponzi scheme is a fraudulent investment operation that pays returns to separate investors from their own money or money paid by subsequent investors, rather than from any actual profit earned.

Both nationally and locally, several other investment fraud and schemes have been exposed over the last year, usually enticing investors with the potential of higher returns, unusually consistent “guaranteed” returns, or through “sophisticated” trading techniques that cloud the transparency of investor’s dollars. As stock markets recover, investment fraud seems to multiply and these schemes start to appear around every corner. So be alert out there, invest wisely and with a healthy dose of caution. The SEC has recently launched, an investor-focused web site to help you invest wisely and avoid fraud.

We monitor market valuations and our fund managers closely, paying close attention to their investment process, their performance track record, and we make changes when managers do not meet our expectations. All of our client assets are under custody at either Fidelity Investments or Charles Schwab, the two largest discount brokerages in the world. Slow and steady often wins the race, especially in building wealth. So when you hear that ad about the “greatest investment of all time” or the next hot stock tip, proceed with caution.

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