Investor Do's & Dont's

  • Be cautious when strangers offering get-rich-quick schemes contact you with “cold” phone calls, e-mails or unannounced visits to your home.

  • The phone calls could be “boiler room” scams, featuring operators who rent offices with impressive addresses.  They hire unlicensed salespeople to work banks of phones, calling individuals from lists the promoters buy.  The promises of fast profits usually don’t come true.
  • Question fantastic promises of extraordinary returns on your investments.

  • Shy away from high-pressure sales techniques requiring hurried money commitments.

  • Some fraudulent schemes have used messengers to pick up investors’ checks almost as soon as they ended a phone call.


  • Avoid investments in which the seller has little or no written information about the company or its past performance.

    Then again, even  printed materials can be fakes.  Read all materials carefully, ask questions and check with experts.


  • Be wary of investments that are sold on the basis of rumors, tips or supposedly inside information.

  • Ask the seller to give you written information about the investment, including the prospectus (also called an offering circular) and financial statement.

    Such information is required for many types of investments, including stock and franchise offerings, limited partnerships and mutual funds.  Read this information before you sign a purchase order to pay for an investment.


  • Consult with your registered stockbroker, banker, lawyer, accountant or real estate agent.

    Check with the Better Business Bureau, the Vermont Securities Division (802-828-3420) or a knowledgeable friend or family member.


  • Contact government agencies to find out if a company or individual is licensed to do business or has any history of violating the law.

    Failure to register or a history of trouble with authorities should raise a red-flag warning to prospective investors.


  • Deal with established businesses with reputations that are known in the community.

  • When in doubt, wait.
    Even legitimate investments carry the risk of losing money.