If it sounds too good to be true then it probably is. This may well be the oldest adage in the book ...
If it sounds too good to be true then it probably is. This may well be the oldest adage in the book but, as we report this month, millions of international investors are still being ripped off by fraudulent money-making schemes.
The latest scam is perhaps one of the most ingenious. Messages are left on home answering machines featuring a young woman who appears to mistakenly believe she has dialled a friend and confides inside information from her broker boyfriend.
In reality, however, it is simply a con perpetrated by "pump and dump" merchants who are creating a buying frenzy around small, thinly traded stocks. Their aim is to raise the stock price to sky-high levels and then sweep for their profits, leaving blissfully unaware investors nursing huge losses and bruised egos.
This scam may have swept the US over the past couple of weeks - over 1,000 complaints from 32 different states were registered in just one week by the Securities and Exchange Commission - but it could have just as easily been anywhere in the world.
Back in the 1980s, such scams were being perpetrated by a small army of financial crooks who were on the telephone 18-hours-a-day persuading, cajoling people into gambling away their life savings. Today the internet and email can take the strain.
But while it is easy to have little sympathy with the plight of innocent investors who have fallen for the patter of the sweet-talking rogue brokers after being blinded by their desire to make an overnight profit, what about those who pay for advice?
Read through the marketing literature of just about any fund and the beautifully flowery language that's used can be enough to persuade the naive investor that they are on to a sure-fire winner with bumper returns practically guaranteed.
There's nothing wrong in that. The aim is, after all, to encourage people to buy into the product. However, many of these funds are simply an embodiment of the latest polished trends which will disappear as quickly as they arrived.
And while the fund management houses are certainly not trying to scam investors, the end result is the same - their savings could be lost.
The dotcom boom of the late 1990s is a prime example. The millions of pounds lost when that particular bubble burst so spectacularly has deterred thousands of investors from going anywhere near the stock market ever since. You'll be hard pressed, however, to find an adviser who doesn't claim now that they saw the collapse coming.
The sheer number of investment products which are now on the market make it imperative that intermediaries are dispensing proper advice to their clients.
It is their responsibility to wade through the small print of whatever product has taken their client's fancy - whether it is the latest in the seemingly endless line of hedge funds making their debut or an obscure emerging markets portfolio.
In many cases, the advisers are the last line of defence protecting investors from themselves and the US scam is a timely reminder of that fact.
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