Paul Sullivan, in his Wealth Matters column this week, uses the fourth anniversary of the collapse of a string of investor frauds (including the biggest, the one involving Bernard L. Madoff) to offer some advice on avoiding similar frauds.
Other than the obvious advice — steer clear of funds whose returns seem to be too good to be true — the first step would be to determine if your adviser is honest. Paul mentions two Web sites, AdviceIQ and BrightScope, as sources of information about advisers. But perhaps the simplest piece of advice, from someone who has studied organizational behavior, is to ask yourself whether the investment is a bad idea. The time taken to answer the question may be enough to keep you from rushing into making a poor decision.
Assuming that you have made bad investment decisions, what have you learned from your mistakes? Please share your experiences below.
Article source: http://bucks.blogs.nytimes.com/2012/12/07/advice-for-avoiding-bad-investment-decisions/?partner=rss&emc=rss
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