South Florida Arbitration & Litigation Lawyer Blog
For ages, gold has been a safe investment for the uninitiated or market-wary. The stability of gold and other precious metals make them an accessible investment with little influence from volatile markets.
The accessibility of precious metals, however, makes them an easy vessel for would-be scammers and fraudulent brokers to take advantage of unseasoned investors. In many cases, alertness and skepticism can mean the difference between making a solid investment and making a stolen investment.
If a prospective broker attempts to entice you into buying gold, silver, platinum or palladium with any of the following tactics, consider your next moves carefully.
“You can trust me.”
Reputable brokers work for reputable companies, and a company’s reputation should be easy enough to check. A shady dealer may try to convince you that their professional background or association with a specific firm, industry or organization warrants your unfailing trust alone. If a dealer offers only special credentials without other justification, their reasons for taking your investment likely are not altruistic.
“I guarantee good returns.”
The market is a living being, which means that it fluctuates almost constantly. No dealer can guarantee double or triple your initial deposit without a crystal ball.
In the same line of thinking, a broker cannot make comparisons to returns on your current investments unless you provide them with that information. Keep an eye out for “too good to be true” situations that offer returns above and beyond your present investments.
“If it worked for them, it will work for you.”
Peer pressure continues to exist outside of after-school programs. By pointing to the established success of others, a dealer may try to convince you that your investment with them will be foolproof. However, without the crystal ball, they are offering you an empty promise with no way of knowing how the market will react.
“I’ll scratch your back if you scratch mine.”
On occasion, you will encounter a dealer who offers to tie your success together in order to set your mind at ease. Reducing dealer fees may be a ploy to get you on the hook to do them a favor.
“It’s only available for a limited time/in limited quantities.”
False windows and supply create false senses of urgency. That false sense of urgency can cause you to buy before you have time to research the dealer and the investment properly. Investments, no matter how small, should be considered carefully and thoughtfully. If you miss out on this particular investment, another will present itself in time.
If you suspect that your precious metals investment has gone awry because of a fraudulent dealer, discuss your concerns with an experienced commodities and precious metals attorney.