Wednesday, August 10, 2011

WARNING: Be careful of hypesters managing your money

I know I've said it before, but PLEASE do your due diligence before sending any money to hypesters and CRIMINALS who have started or are starting hedge funds, managed money programs, and commodity pools.

Here's the thing, I know you want to believe them when they tell you they are trying to do "right by their members" or whatever lie they make up, but they are super hypocrites and want nothing more than to pick your pockets.

After all, they are the biggest screamers about "brokers being bad people", although they endorse the worst ones because they pay the best and how you should "learn to fish" but yet take your money to manage at ridiculously high rates.

Here is a quick due diligence checklist, but not an all inclusive one:

1)Find out how much money the person running the fund has in. Ask why that amount? If it's only a fraction of their net worth, ask them why so little? If they believe it enough to sell you on loan shark like management fees, shouldn't they be all in themselves? If there is more than 1 person running the money, find out how much EVERYONE has in the fund. If someone doesn't have any money in the fund they are pushing, ask why? Are they using you to fund their lifestyle and pay their bills? Really?

2) Ask any and all people running your money if they ever ran money before and what their performance was. You Will be surprised at the results (because they would never admit it on their blogs, facebook pages or websites) and will likely run the other way!

3) Ask what their rules for handling risk are. These scam artists take ENORMOUS draw downs in their personal accounts, having dozens of margin calls fire off over the years. What will happen when they take a wicked draw down with YOUR money?

4) Why are they starting to manage money now? Don't buy the whole "our clients asked for it" scam. They are playing another angle because their previous scams have dried up due to the fact that everyone is on to them.

Make sure there is transparency, and no lock up so you can get your money out when you start seeing the shenanigans going on, like un returned phone calls and emails. I'm sure there will be an excuse meant to tug at your heartstrings, but these people could care less about you, they just want your money.

I'll keep good thoughts for those that drank the Kool Aid.


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