‘All Or Nothing’ Investment Don’t Work In This Way
Beware of scam operators looking to lure your money by offering superb investments without high risk
What’s the rationale for your investment? We all invest with the hope that our returns would be substantive after a long period of time so that we can use the money for our future purposes, including retirement life, building property, buying vehicles and so on. No one would invest with the intention that they don’t want any returns from their investment money.
Yes, there are investors who would like to take risks with their investments with the rationale that the more risks you take in investment, the returns would be equally good. On the other hand, with the risks you take, you have to be ready to face the consequences as well, including the option of seeing your investment money going for a loss-making proposition.
In this article, we are analyzing the various investment options that lure you with ‘All or Nothing’ investment schemes.
All or nothing investments
If you are looking for high yield, low-risk investments, you might have also heard about the ‘binary options.” You might have received personal emails and social media posts, asking you to go through their marketing material. But the most important thing you have to realize here is that majority of such ‘offers’ are frauds. They will come up with big offers, marketing and sales strategies to lure the investors like you and you have to take extra caution for not falling into the traps from these fraud companies. Their offers might sound very attractive but once you after such investments, your money is in trouble.
Many of these investment schemes display same characteristics and associated risk elements. But how would you identify that a particular scheme is a scam? Let’s find out.
Binary option is a classic example of all or nothing types of investments. The returns here depends on the result of the yes or no scenario here. The investor is promised money after the expiry of the option. Let’s take an example to illustrate the point. Suppose that you invested $100 in a binary option contract and the return the company has promised you is 50 percent if it’s share price goes more than $10.
What will happen if the stock price is not going above $10? You will lose your entire investment of $100. That is total loss scenario. So, think twice before investing in such schemes. Yes, there are instances that some investors made money with such schemes, but the majority of people who fell for such traps, invariably lost their money.
When you consider the law aspect also, the binary options operators are not following the federal securities laws here. What they would be offering you could be unregistered securities. That is the significant part in this scam. Many of them are reportedly unregistered broker dealer or securities exchange.
You can identify whether the scheme is a scam by following some simple steps. If it promises a higher return than the normal rate prevalent in the market for your investment without any risk, then you have to suspect the scheme. Such operators will also ask for personal documents like passport copies or other bills from you.
They will keep asking for investments even after you made your initial investment. Acting friendly with you and after gaining your trust, they will ask you to invest more money in the scheme. When you are trying to withdraw the money, the process becomes cumbersome and it will be difficult for you to get back your money. Even after you have completed all the previously agreed terms, they refuse to give back your money.
Why is it unregulated?
You must be wondering why such operators are not being tackled by the authorities, the reason is that many such players have been operating from offshore and are unregulated by US laws. That is the reason if you invested money in such schemes and lost your money, you won’t be in a position to raise a complaint because of the loopholes in the financial system.
So, the only option for you to is to keep away from investing your hard-earned money in such dubious schemes. It is always important to make sure that the investment schemes have registration in the operating country.