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22ND NOV 2008
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Students and graduates that wish to seek financial advice as their personal debt has become too much to deal with should be aware of the advice to avoid.
Every investor knows that there is no shortage of financial advice around. From your well intentioned but ill informed uncle to the guy in the barber chair, it seems that everyone is eager to give you their latest stock tip. When you add the internet to the mix, the level of financial advice can be overwhelming.
Of course not all financial advice is worth following, and the wrong financial advice can end up costing you a bundle. It is important not only to know which financial advice to follow, but which financial advice to stay away from as well.
Read your email carefully
One of the sources of financial advice that can be safely ignored are unsolicited emails. Spam emails are a prime source of investment scams, including the well known “pump and dump” strategy. Spammers will send out a ton of emails touting the “next hot stock” or some such scam, knowing that a small percentage of people will respond and buy the stock. Since the stocks touted are often thinly traded penny stocks, even a small volume is enough to significantly raise the price. Once the price has been driven up, the spammer sells the stock and the price plummets, leaving those who bought in holding the bag.
Watch those chat rooms
Chat rooms are another prime source for pump and dump scammers, and the system works much the same. Chat rooms are also full of well meaning but often uninformed investment advice. Be especially careful about chat room participants who claim to have inside information. It is difficult to tell who is who in a chat room, and it is impossible to verify their identity. Any information you gather in a chat room should be independently verified before you act.
Finding great investment advice can be a challenge, but there is solid advice out there. The best way to sort out the good advice from the bad is to become an informed and experienced investor. Once you know what to look for in an investment, you will leave the scammers out in the cold.
www.1stcall.com
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Provided by The Student Zone (United Kingdom) |
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