When people fall victim to a scam and lose their investments, 20/20 hindsight often has the rest of us scratching our heads and wondering, "How the heck did they fall for that?"
We all have our circles, and when one person in that circle trusts someone, it becomes easier for the rest of us to trust that person. We assume that someone we know did the due diligence and now we don't have to.
Let's hope that after being inundated with news about Bernie Madoff's alleged $50 billion Ponzi scheme -- perhaps the scam of the our lifetimes -- we're a little less smug about who falls for a scam and who doesn't.
1. Keep your eyes wide open
Each person who hands money to an adviser or a firm to invest must do so with his eyes wide open. Check out the adviser's credentials, get references and use a search engine or news service to see if anything's been reported or blogged about the adviser. Make sure the adviser understands your goals and financial needs. And know how your money will be invested, and get it in writing. For more click the link.
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