Ponzi Pointers

July 2nd, 2009 - No Comments

In an article on the Research/Penn State Web site, Smeal’s Edward Ketz explains how Ponzi schemes work and offers this advice for avoiding them:

A lack of clarity about the workings of an investment plan should be an immediate red flag. Investors should be skeptical if fund managers say things like “you wouldn’t understand” or “that’s private information.” Those types of claims are attempts to deceive.

Warren Buffet is one of the world’s most successful investors, and he has often said that he does not invest in anything he does not fully understand.  Those who follow his advice will not fall prey to a Ponzi scheme.

Tags: Finance, Ketz

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