There are more than 21.3 million Veterans in the United States – that’s 21.3 million potential targets for fraud. Unfortunately, fraudsters like to try to gain the trust of a group of people with common backgrounds and interests. That’s why as a Veteran, they may zero in on you or your family and try to draw you into their fraudulent investment schemes. The fraudster may even be a Veteran or at least pretend to be.
Investment fraud comes in many shapes and sizes and fraudsters use various tactics to scam potential investors. Often, the fraudster pretends to be your friend, encourages you to get in on the “ground floor” of a new investment opportunity, promises huge returns and pressures you into buying right away. These are all red flags that should set off alarms. You can see examples of these kinds of fraud and how to avoid them by checking out the Securities and Exchange Commission’s (SEC) new public service videos. Bottom line – if it sounds too good to be true, it probably is!
Whether you’re a first time investor or a seasoned pro, the SEC has valuable information on ways to stay clear of con artists and their investment scams, and how to invest wisely and consider the costs and fees associated with investing. Learn more at Saving and Investing: A Roadmap to Your Financial Security Through Saving and Investing and take advantage of all of the free investor education tools and resources at Investor.gov, including our military page.
The very first thing you need to do is make sure you have done a background check on your investment professional. It’s easy to do. Just go to the SEC’s Investor.gov website to check on your financial professional before you invest.
Being informed about the fees and expenses of investing is also an important part of being a wise investor. These fees may seem small, but over time they can have a major impact on your investment portfolio. Be sure to ask your financial professional questions so that you understand what you will be charged, when and why. These questions can range from what fees are charged for transactions and advisory services to how the financial professional is compensated. And just like shopping for the best price on a car, shop around before you invest and consider how much you are paying for investing services.
Remember, all investments involve some degree of risk. By picking a mix of investments you may be able to limit your losses and reduce the ups and downs of your returns without sacrificing much in potential gains.
And most importantly, don’t be a victim of investment fraud. Your best defense is self-defense—through education, research and common sense.
Thank you for your service.
The Securities and Exchange Commission, as a matter of policy, disclaims responsibility for any private publication or statement by any of its employees. The views expressed herein are those of the author and do not necessarily reflect the views of the Commission or of the author’s colleagues upon the staff of the Commission.
About the author: Lori Schock is the director of the Securities and Exchange Commission’s Office of Investor Education and Advocacy.