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If it seems too good to be true …

Recently I’ve read about some get-rich-quick investments targeting people’s retirement savings. Unfortunately, these schemes are generally way too risky for a retirement nest egg.

If an investment sounds too good to be true, it probably is. Check out this SmartMoney article about structured products: 

The democratization of all things money has its drawbacks. Yes, Wall Street is once again packaging and selling structured products and other investments primarily designed for the very rich to average, and perhaps unwitting, investors …

Given that, both the Securities and Exchange Commission and the Financial Industry Regulatory Authority, or Finra, have issued a warning to investors: “While these products often have reassuring names that include some variant of ‘principal protection,’ ‘capital guarantee,’ ‘absolute return,’ ‘minimum return’ or similar terms, they are not risk-free.”

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In the search to become wealthy or comfortable or just get out of debt, people are tempted to jump on risky investments – hoping to be part of the small percentage who benefits. From structured investment products to collectable cars to high-dollar artwork to gold bars to lottery tickets, there are opportunities to risk your retirement savings.

In some instances, an investment is not merely too good to be true; sometimes it’s just plain fraudulent.

Several years ago, an acquaintance of mine learned about a “can’t lose,” fast-money real-estate scheme. He flew to a different city to witness his potential investment. He got a helicopter ride around the large development site. Things sounded good and looked good, so he went all-in.

The return on his first investment was great, so he re-invested – this time convincing his wife to participate. The second round of investing didn’t go so well. The developer stopped returning his calls, and instead he heard from the FBI. He’d been unknowingly investing in a Ponzi scheme.

If you’re wondering what to look for to avoid a scam, check out this piece, How Investment Scams Work.

Even if you’re not tempted by scams, we can all use a periodic reminder that our retirement savings make up our nest egg. Eggs are breakable, and we’ve all heard it’s best not to keep them all in one basket.

The retirement investing strategy most suitable for most investors is a diversified, long-term approach.

Our adviser team is available to help you develop a long-term retirement investing strategy. You can reach them at 877.627.8401.

Carolyn Humpherson

Financial Communication Specialist