Annual Fraud PSA (Part 3)

As a PSA on the existence of shady tactics in the financial industry, I have been dissecting credentials originally tied to a bogus article/advertisement on riskless collars. Today I continue the journey by analyzing content from GetFolio.com.

     > Two things GetFolio.com does better than anyone else, and I
     > guarantee it…

Guarantees of performance are prohibited by the SEC. For that reason, the mere presence of the g-word in any promotional material for financially-related products is a red flag to me. Unless pertaining to a bond,* the word “guarantee” is not necessary and does not belong in financial marketing. Ever.

     > Ask yourself a simple question: Is investing a hobby, or is it a
     > serious business that you believe can make you real money? If it’s
     > a serious business, then what is it worth to ensure that you don’t
     > waste thousands of dollars, struggling to get ahead with risky and
     > ineffective techniques?

If it’s a serious business then you will be relying on yourself to learn/develop strategy as opposed to potential shysters selling trade ideas. I wrote about this here.

     > Try it now!
     > It really works

Any verbiage that seems too cheesy, aggressive, superficial, or pushy is a red flag. I believe people with true investing skill are humble, respectful, and will let the numbers (if there are any) speak for themselves.

Another theme I have seen in the newsletter/advisory industry is a tendency for charlatans to step on the backs of crooks. In navigating to the “guarantee” tab:

     > A healthy dose of skepticism about web-based businesses, much less
     > those that provide investment strategies, is a good idea…

Encouraging skepticism—even about a category [web-based businesses] to which he belongs—makes him appear more credible. Several times I have read/heard such content from people later named in SEC Complaints.

While believing myself to be authentic, I have encouraged skepticism many times in the blog so I do not consider it a deal breaker. I am also not selling anything here. If I were then I might avoid these optionScam.com posts altogether. I simply want to acknowledge the presence of hypocrisy in the financial industry along with the fact that recommending skepticism for personal protection is sometimes a sales tactic. Don’t forget to apply that scrutiny to whoever/whatever is offering the advice.

     > The GetFolio.com performance guarantee is offered to new
     > subscribers only… To qualify for the guarantee, you must
     > maintain a log of all trades taken throughout your subscription
     > period, documented via legitimate proofs of purchases.

That seems too loose for me. Do I need to hold positions until the service finally recommends closing at huge losses? How much money could I lose across all positions before seeking refund for a few hundred bucks? Would I be willing to send actual brokerage statements to a stranger to get my money back? Aside from security issues, the time and effort required to collate all this might not be worthwhile.

I will continue next time.

* A non-cancellable indemnity bond whose principal and interest payments are backed by an insurer is “guaranteed.”