Rev. Daniel Ogbarmey Tetteh, Director-General of the Securities and Exchange Commission (SEC), has warned the general public and investors to run from get rich quick schemes that promise high returns. He thus, beseeched them to run away from such activities.
According to the Director-General of the Securities and Exchange Commission, the repercussions of investing in such get rich quick schemes or Ponzi schemes and investments which promise high returns with low risks are enormous.
“Anytime anybody tells you that this return is high, sure banker, low risk; it’s likely to be a scam. Just know that it is likely to be a scam.”
Rev. Daniel Ogbarmey Tetteh
Rev. Daniel Ogbarmey surmised that high returns on investment comes with very high risks. He stated that the risks that comes along with such schemes may result to the loss of huge sums of money. He thus, stressed on the need to understand the trade-offs between risks and returns before making financial decisions, noting that they are very crucial for any investment undertakings.
“What is the best investment? Which one gives me the highest returns? Anytime there’s high return, it also means that there is high risk. Anytime anybody proposes an investment solution, and they say that the risk is low but the return is high, please look for the exit door and run as fast as you can.
“Unfortunately, what many people do is a mistake. They just ask, what is the highest return I can get? And then they go without understanding that there is a trade-off. Risks must be compensated for. If you’re not taking a lot of risks, then you don’t really have to be compensated. Anytime there is high compensation, there’s high return, they may not be explicit about it but there is a lot of risks.”
Rev. Daniel Ogbarmey Tetteh
Mr Ogbarmey Tetteh advised that “it is important one assess his or her risk tolerance levels before making any investment.”
“Lovers of high returns should be ready for the outcome of their investments, because they come with very high risks.”
Rev. Daniel Ogbarmey Tetteh
What to Do to Avoid Investment Fraud
In the foregoing discussion and the prevalent of investment scams in the country, it is worth knowing some few investment tips to guide every potential investor.
The first thing to do when you are presented with every investment opportunity is to ask questions. Fraudsters are counting on you not to investigate before you invest. Fend them off by doing your own digging. It’s not enough to ask for more information or for references since fraudsters have no incentive to set you straight. Take the time to do your own independent research.
More importantly, research before you invest. Nevertheless, unsolicited emails, board message postings, and company news releases should never be used as the sole basis for your investment decisions. Understand a company’s business and its products or services before investing. Look for the company’s financial statements and other important information to guide you.
Know the salesperson. Spend some time checking out the person touting the investment before you invest. Even if you already know the person socially. Always find out whether the securities salespeople who contact you are licensed to sell securities and whether they or their firms have had run-ins with regulators or other investors.
All in all, Rev. Daniel Ogbarmey urged Investors to assess their risk tolerance levels before investing in any investment scheme.
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