Minneapolis, MN — All Star Financial announces the addition of Samuel Sexton, as a Senior…
Have you ever been asked to invest in something that sounded too good to be true? Did you ask yourself, or even tell yourself “this seems too good to be true”, but still found yourself curious, maybe even willing to invest because of the excitement generated by the promise of “big returns”, an “exclusive offer”, or some other attention-grabbing claim?
Being in the investment industry, we often receive calls from our clients asking us to review investments that they have heard about, or are even interested in. Not all of these investment “opportunities” come with big claims, and sometimes, they are not easy to research because there is a lack of information about the investment. But even if information is provided, how do you know it’s accurate or even truthful?
Recently, we had a client who was interested in investing with a locally run hedge fund. Thankfully, our client reached out to us before investing and asked us for our opinion as to whether this was a good or bad investment to make. Bruce Bonner, our Chartered Financial Analyst® (CFA), researched the hedge fund, but ultimately did not feel comfortable with the investment information provided. Consequently, Bruce recommended that our client avoid it. The client took our advice. Just last week, we learned that the owner of that same hedge fund is being investigated by the SEC for cheating investors out of over $1 million dollars. Similarly, a few years ago, another client of ours was interested in potentially putting money into a private investment with a very well-known and respected individual in the industry named Bernard Madoff. We ultimately advised the client to avoid making the investment, and they listened. Later, Bernard “Bernie” Madoff went on to be convicted of fraud for running a multi-billion dollar Ponzi scheme that is considered to be the largest financial fraud in U.S. history.
Not every investment opportunity is a ponzi-scheme run by cheaters or criminals. In fact, there are plenty of legitimate investments out there to be made. But here at All Star Financial, we just remind you, “when in doubt, check it out.” If you, a friend, or even a family member has a question about an investment that you are considering putting a large sum of money in, feel free to give us a call to get our opinion. You may just thank us in the end!