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Investment schemes involve getting you or your business to part with money on the promise of a questionable financial opportunity.
Common types of investment scams
Investment cold calls
A scammer claiming to be a stock broker or portfolio manager calls you and offers financial or investments advice. They will claim what they are offering is low-risk and will provide you with quick and high returns, or encourage you to invest in overseas companies. The scammer’s offer will sound legitimate and they may have resources to back up their claims. They will be persistent, and may keep calling you back.
The scammer may claim that they do not need an Australian Financial Services licence, or that that they are approved by a real government regulator or affiliated with a genuine company.
The investments offered in these type of cold calls are usually share, mortgage, or real estate high-return schemes, options trading or foreign currency trading. The scammer is operating from overseas, and will not have an Australian Financial Services licence.
Share promotions and hot tips
The scammer encourages you to buy shares in a company that they predict is about to increase in value. You may be contacted by email or the message will be posted in a forum. The message will seem like an inside tip and stress that you need to act quickly. The scammer is trying to boost the price of stock so they can sell shares they have already bought, and make a huge profit. The share value will then go down dramatically.
If you invest you will be left with large losses or shares that are virtually worthless.
Investment seminars are promoted by promising motivational speakers, investment experts, or self-made millionaires who will give you expert advice on investing. They are designed to convince you into following high risk investment strategies such as borrowing large sums of money to buy property, or investments that involve lending money on a no security basis or other risky terms.
Promoters make money by charging you an attendance fee, selling overpriced reports or books, and by selling investments and property without letting you get independent advice. The investments on offer are generally overvalued and you may end up having to pay fees and commissions that the promoters did not tell you about. High pressure sales tactics or false and misleading claims are often used to pressure you into investing, such as guaranteed rent or discounts for buying off the plan.
If you invest there is a high chance you will lose money.
Visit ASIC’s MoneySmart for more information about investment seminar scams.
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Superannuation scams offer to give you early access to your super fund, often through a self-managed super fund or for a fee. The offer may come from a financial adviser, or a scammer posing as one. The scammer may ask you to agree to a story to ensure the early release of your money and then, acting as your financial adviser, they will deceive your superannuation company into paying out your super benefits directly to them. Once they have your money, the scammer may take large ‘fees’ out of the released fund or leave you with nothing at all.
You cannot legally access the preserved part of your super until you are between 55 and 60, depending what year you were born. There are certain exceptions such as severe financial hardship or compassionate grounds – but anyone who otherwise offers early access to your super is acting illegally.
Visit ASIC’s MoneySmart for more information about how super works.
- You receive a call, or repeated calls, from someone offering unsolicited advice on investments. They may try to keep you on the phone for a long time, or try and transfer you to a more senior person. You are told that you need to act quickly and invest or you will miss out.
- You receive an email from a stranger offering advice on the share price of a particular company. It may not be addressed to you personally, and may even give the impression it was sent to you by mistake.
- An advertisement or seminar makes claims such as ‘risk-free investment’, ‘be a millionaire in three years’, or ‘get-rich quick’.
- You are invited to attend a free seminar, but there are high fees to attend any further sessions. The scammer, posing as the promoter, may offer you a loan to cover both the cost of your attendance at the additional seminars and investments.
- You see an advertisement promising a quick and easy way to ‘unlock’ your superannuation early.
- Do not give your details to an unsolicited caller or reply to emails offering financial advice or investment opportunities – just hang up or delete the email.
- Be suspicious of investment opportunities that promise a high return with little or no risk.
- Check if a financial advisor is registered via the ASIC website. Any business or person that offers or advises you about financial products must be an Australian Financial Services (AFS) licence holder.
- Check ASIC’s list of companies you should not deal with. If the company that called you is on the list – do not deal with them.
- Do not let anyone pressure you into making decisions about your money or investments and never commit to any investment at a seminar – always get independent legal or financial advice.
- Do not respond to emails from strangers offering predictions on shares, investment tips, or investment advice.
- If you feel an offer to buy shares might be legitimate, always check the company’s listing on the stock exchange for its current value and recent shares performance. Some offers to buy your shares may be well below market value.
- Never commit to any investment at a seminar – always take time to consider the opportunity and seek independent financial advice.
- If you are under 55, watch out for offers promoting easy access to your preserved superannuation benefits. If you illegally access your super early, you may face penalties under taxation law.
Have you been scammed?
If you think you have provided your account details to a scammer, contact your bank or financial institution immediately.
We encourage you to report scams to the ACCC via the report a scam page. This helps us to warn people about current scams, monitor trends and disrupt scams where possible. Please include details of the scam contact you received, for example, email or screenshot.
Scams that relate to financial services can also be reported to ASIC.
Spread the word to your friends and family to protect them.
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Mar 24, 2020 It is clear that, once upon a time, finance types had a little more fun with their jobs. How else to explain how “dead cat bounce” came to be a widely accepted piece of financial jargon? The odd term refers to a temporary rally in the price of a stock that’s losing value. Learn what constitutes a dead cat bounce, why it happens and how you, as an investor, can benefit from this phenomenon. Worried about your investments? Find a financial advisor today. Read More.
Jan 14, 2020 A chartered financial analyst (CFA) is a financial advisor who has earned the title of CFA through extra accreditation, including a rigorous three-part test, from the CFA Institute . A Chartered Alternative Investment Analyst (CAIA) specializes in alternative investments such as hedge funds and private equity. This professional must undergo 400 hours of study and pass two rigorous exams to earn the CAIA designation from the Chartered Alternative Investment Analyst Association. We’ll explain what a CFA and a CAIA do, what it takes to earn those designations and the difference between the CFA designation and the CAIA designation. If you are looking for a financial advisor who can help you with your investments, check out Read More.
Nov 04, 2020 There is no lack of investment opportunities in today’s financial sector, but every investor’s situation is different, and many welcome new options. If you’re seeking alternatives beyond mutual funds and stocks, you might consider UCITS funds. UCITS stands for the Undertakings for the Collective Investment in Transferable Securities, which is a regulatory framework that governs the sale and management of mutual funds in the European Union. UCITS funds are enormously popular in Europe, but investors outside the EU can access them as well. Here’s what you need to know about how these funds work. Read More.
Dec 03, 2020 Investing has its risks. But there are strategies to determine an investment’s expected return, based on that risk. It’s called the Capital Asset Pricing Model (CAPM). Investors can use CAPM to determine whether an investment is worth the risk. Learn how to calculate it and use it in your investing. Read More.
Dec 02, 2020 When tracking your investment portfolio, you might compare its against a stock market index such as the Dow Jones Industrial Average. Ideally, you want investments to beat the Dow. The Dogs of the Dow investing strategy attempts to identify value stocks. What’s its history, does it work, and how can investors take advantage? Read More.
Dec 02, 2020 Investing in the stock market inevitably brings risk, and diversifying a portfolio doesn’t eliminate it. There’s always systematic risk. In other words, there’s always inevitable risk that affects a market segment or the market as a whole. Systematic risk affects the entire market, not just a single stock or industry. Here’s what investors need to know. Read More.
Dec 02, 2020 If you’re stock market regular, you’ve likely heard of day trading: The buying and selling of securities within the same trading day. But maybe you’d like a slightly longer lead time for such transactions. Enter swing trading, which is basically day trading over a somewhat longer period. Here are some basic swing trading strategies. Read More.
Jan 15, 2020 Assessing the value of a company or security can take a few different forms. You can measure all stocks or securities equally, or use market capitalization. Another choice: a price-weighted index, in which each member company’s stock in an index is weighted proportionally to its current share price. Read More.
Dec 02, 2020 While you might have a good grasp on the ins and outs of the stock market, it’s impossible to predict its future. That doesn’t stop some people from cheating the system for their own benefit, though. Read on to learn all about market manipulation, including how to spot it and avoid becoming a victim. Read More.
Jan 14, 2020 Since buying and selling stock is a key component of investing, it’s important for investors to understand trading terminology — especially the term “bid-ask spread.” If you have no idea what that means or how it affects your investment mix and overall portfolio, read on. Read More.
Jan 14, 2020 High frequency trading (HFT) is controversial. Some investors say it lets people capitalize off of opportunities that may vanish quite quickly. Others say high frequency trading distorts the markets. Supporters of high frequency trades have rhetoric in their corner, but opponents have data. Here’s what they’re all talking about. Read More.
Oct 31, 2020 Systemic risk is the risk that a company-level event could destabilize an entire industry. Think back to the financial crisis of 2008, when many companies deemed “too big to fail” did exactly that. To safeguard your investments for the next market adjustment, it helps to understand the factors that contribute to a downturn. Read on to learn more about systemic risk and how it can impact your future financial security. Read More.
Oct 29, 2020 As one of the most highly regarded compliance certifications, the Certified Regulatory and Compliance Professional (CRCP) designation helps professionals increase their skills as well as knowledge of industry regulations. Read on to discover the importance of the CRCP and how it influences the companies you may do business with. Read More.
Oct 28, 2020 Restricted stock has become a common offering among employers in the last twenty years. There are two main types: restricted stock awards (RSA) and restricted stock units (RSU). Both can be lucrative parts of a compensation package, but they have important differences that can affect your long-term financial interests. Read More.
Jan 14, 2020 An annuity is an insurance contract you can use to create an income stream. You can purchase an annuity to draw payments against in retirement as a supplement to tax-advantaged or taxable savings accounts. But what if you want to sell your annuity and get immediate cash? Here’s why selling your annuity is something you might consider. Read More.
Oct 25, 2020 Marketing professionals within the finance industry may escape licensing exams like the Series 7. However, the Certified Financial Marketing Professional (CFMP) designation from the American Banking Association (ABA) requires some testing of its own. A CFMP demonstrates expertise in bank marketing, and here’s how you get it and maintain it. Read More.
Oct 24, 2020 Leverage is a common financial concept you may often hear in reference to maximizing investor returns. Commonly used by investors and companies alike, leverage is a technique that utilizes debt instead of equity to buy an asset. The expectation is that the profit from the endeavor will exceed the risk and cost of taking on additional debt. However, applying leverage to your investment strategy comes with pros and cons. If you have further questions, meet with a financial advisor in your area. Read More.
Jan 15, 2020 Neighborly is an investment company that allows investors to invest in communities seeking funding for internet infrastructure. More specifically, it focuses on bringing fiber broadband access to disadvantaged communities in the U.S. by way of direct investments in its qualified opportunity fund (QOF). As of now, investments in this QOF are only open to accredited investors, though this may change down the road. If you have questions about investing in these and other unique asset classes, try consulting with a financial advisor. Read More.
Oct 22, 2020 If you’ve ever watched a financial news program or visited a website that covers the stock market, you might notice an endlessly cycling parade of numbers, symbols and abbreviations. These collectively make up a stock ticker, which provides snapshots of activity in the stock market. Knowing how to read and understand a stock ticker is crucial to following the movements of the market. Read More.
Oct 21, 2020 An endowment is comprised of money donated to a non-profit organization. This sum of money is typically placed in an endowment fund, which is then invested. The return from those investments are used to fund the organization’s operations or grow the endowment principal. Read More.
Oct 17, 2020 Some companies regularly pay their shareholders part of their profits in the form of dividends. These bonus earnings function as both a reward for investors and a way of generating confidence in a company’s stock. Investing in dividend-yielding equities for a little extra income and an upfront return on your investment might seem like a no-brainer. However, you should examine what types of stocks pay dividends and how these payments are taxed. Read More.
Oct 16, 2020 Investing can be a powerful way to grow your savings over time, but the downside is that you generally have to pay taxes on your investment gains. The more you pay in taxes, the less of your returns you get to keep. With the right strategy, however, it’s possible to minimize the amount of taxes you pay on your investments. Certain investments are not subject to taxation, and investments placed in certain tax advantaged retirement accounts will likewise be shielded from some taxes. As you build your portfolio, consider including these seven options for minimizing taxes. Read More.
Jan 14, 2020 If you have a diverse investment portfolio you’ve probably bought publicly traded stocks on the open market. But some investors operate in an alternate, well-funded investment universe. In the world of private equity, well-funded investment firms make big investments in private companies, often with the goal of taking over those companies and making them more profitable. Read More.
Jan 07, 2020 The Consumer Price Index (CPI) is an economic term you’ve probably heard before but may not know much about. Broadly speaking, the CPI measures the price of consumer goods and how they’re trending. It’s a tool for measuring how the economy as a whole is faring when it comes to inflation or deflation. When planning how you spend or save your money, the CPI can influence your decisions. Here’s how. Read More.
Oct 07, 2020 Net worth is often used as a measurement of individual, or household, wealth. This value can give you a holistic perspective of your financial situation. In fact, the average American net worth is $68,828, according to the U.S. Census Bureau’s 2020 study on wealth and asset ownership. But how is this figure calculated? And how do you calculate your own net worth? Below, we take a closer look at the factors that distinguish your net worth from your fellow Americans. Read More.
Oct 02, 2020 Investing in stocks, mutual funds and other securities inevitably comes with risk. One of the ways investors can better understand these risks is by reading the prospectus of a security. A prospectus is a legal document that describes a security to potential investors. Required by the SEC, a prospectus contains facts about the company or fund issuing the security, including details on its finances, management, history and other information that could help investors make an informed decision. The prospectus is a key tool in an investor’s toolbox, making it easier to understand whether or not you’re investing in a way that aligns with your goals and risk tolerance. Read More.
Sep 30, 2020 A subadvisor is an investment management firm that typically partners with a mutual fund investment advisor to help with the day-to-day management of the fund. They often provide specialized expertise in a specific type of investment strategy. This could include building an appropriate asset allocation, choosing securities or rebalancing the fund’s portfolio. If you want some help managing your investment portfolio, check out financial advisors in your area. Read More.
Jan 14, 2020 Buying on margin is a technique often reserved for intermediate and advanced investors through which someone borrows money from their broker in order to invest it. In the best-case scenario, buying stock on margin can increase your earnings significantly. On the other hand, you can be left in a world of hurt if the price of your investment drops. The world of margin investing is one of higher stakes, so it’s crucial to understand the concepts and associated risks before diving in. Read More.
Jan 15, 2020 Bonds are a type of debt security used by government entities and corporations to raise money. Every bond come with a face value, which is sometimes called a par value. This number indicates what the bond will be worth at maturity, and it’s also used to calculate the bond’s interest payments. It’s one of the key numbers you need to know about a bond in order to understand its value as an investment. If you have specific questions about investing in bonds, consider consulting with a financial advisor. Read More.
Sep 27, 2020 Market capitalization, often abbreviated as market cap, is a measure of a public company’s overall value as set by the market. Market cap can be used to compare companies. It is also a tool to help diversify a portfolio of investments and manage risk and return. The market cap of a given company is generally easy to find, though you can also calculate it yourself. Read More.
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|Rank||County||Business Growth||GDP Growth ($ in millions)||New Building Permits (per 1,000 homes)||Federal Funding (per capita)|
Methodology There are several ways individuals, governments and businesses can invest money in a county or region. Our study aims to capture the places across the country that are receiving the most incoming investments in business, real estate, government and the local economy as a whole. To do this we looked at four factors: business establishment growth, GDP growth, new building permits and federal funding.
We looked at the change in the number of businesses established in each location over a 3-year period. This shows whether or not people are starting new business ventures in the county.
The second factor we looked at was the GDP growth. We used real growth (inflation adjusted) in the local economy.
We also looked at investment and development in the local residential real estate market. To measure this real estate growth, we calculated the number of new building permits per 1,000 homes.
The final factor we considered was federal funding received by each county. We found federal funding in the form of contracts awarded to businesses in each county, which we divided by the population. This gave us a per capita look at the flow of investment from the federal to the local level.
We scored every county in our study on these four factors. We then combined those scores to create a final ranking of cities. With that ranking, we created an index where the county with the most incoming investments was assigned a value of 100 and the county with the least investment activity received a zero.
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