What are the red flags for investment scams?

Investment scams are a form of fraud that are common in California and elsewhere. Red flags for investment scams can include promises of no risk, high returns, insider information, guarantees, and unsolicited offers. Promises of no risk or high returns are one of the most common red flags of investment scams. Promises of no risk or extremely high returns with little to no effort required should be viewed with skepticism, as these investments are often too good to be true. Insider information and trading on tips is also a red flag. While there is nothing wrong with getting insider information and using it to make investment decisions, scams often rely on lying about the quality of this information and the potential profits. Guarantees are another red flag. While reputable investments can provide some level of guarantee, investments that are too good to be true often come with guarantees that involve little to no effort. Finally, unsolicited offers should be reviewed with caution. If you receive an offer for a seemingly “too good to be true” investment opportunity from someone you do not know, it is likely a scam. It is important to do your research and be on the lookout for red flags when it comes to investment scams. It is a good idea to watch out for the red flags mentioned above. Be careful and be sure to use reputable financial advisors and financial institutions that are regulated by the government.

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What are the red flags for investment scams?

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