Trick or Treat? Don’t Get Tricked When It Comes To Investing For Your Future

Trick or Treat

By Lori Schock, Director of the SEC’s Office of Investor Education and Advocacy

Trick or Treat? When it comes to investing for your future, don’t get tricked into turning over your hard-earned money to a fraudster. Instead, treat yourself to some tips that can help you avoid fraud and make better informed investment decisions.

👻 Trick – Fraudsters posing as investment professionals typically aren’t registered and may exaggerate or even lie about their financial experience and credentials.

🎃 Treat – Make sure you’re dealing with a registered investment professional. A great first step toward protecting your hard-earned money is to use the free and simple search tool on to check out an investment professional’s background, registration status, and more.

👻 Trick – Fraudsters can create fake investment opportunities and try to get you to invest in something that doesn’t exist.

🎃 Treat – Get investment information from trusted sources. Do your due diligence and research every investment opportunity before investing. A good place to start is, which provides accurate, trustworthy and unbiased saving and investing information. You can also check investment offerings on the SEC’s EDGAR database where you can look up investment opportunities, like a public company’s financial information and information provided by mutual funds and exchange-traded funds (ETFs). If you don’t fully understand an investment, conduct more research and ask for additional paperwork. If you can’t verify the investment’s legitimacy, don’t invest in it.

👻 Trick – Fraudsters can use high-pressure sales tactics and appeal to your fear of missing out (FOMO) to try to get you to invest right away.

🎃 Treat – Take your time when making investment decisions. If someone is telling you that you might miss out on an investment opportunity if you don’t act right now, stay away. High-pressure sales tactics or FOMO may tempt you to make quick decisions. Don’t let these tactics or FOMO cloud your judgment. You could end up losing all of your money.

👻 Trick – Fraudsters often offer “no risk” or so called “can’t miss” investment opportunities with promises of quick, high guaranteed investment returns and great wealth.

🎃 Treat – Invest for the long term and avoid “can’t miss” opportunities. Keep in mind the old saying, “if it sounds too good to be true, it probably is.” All investments have risk. Generally, the higher returns, the higher the risk. A great way to invest for your future is to set financial goals and create a diversified, long-term, risk appropriate investment plan that helps you achieve your goals.

👻 Trick – Fraudsters often use fake testimonials from their so called “clients” to try to make their investments sound legitimate. These “clients” tout how the investments supposedly made them rich to try to convince you to invest.

🎃 Treat – Make investment decisions based on your own independent research. Never make investment decisions based on testimonials by anyone, including celebrities. Keep in mind that oftentimes celebrities are paid for their endorsements and just because they’re promoting something, it doesn’t mean it’s the right investment opportunity for you.

Trick or Treat? When it comes to investing for your future, keeping these investing “treats” in mind can help you avoid being “tricked” into losing your hard-earned money. For more tips on how to avoid getting tricked, check out our mock HoweyTrade Investment Program video, which shows what real scams can look like, as well as an educational video to learn how to spot and avoid fraud.

Note: Director’s Take articles are written in a short, non-legalese format intended to provide you with tips and information on timely investment topics that are important to you. You can subscribe to receive Director’s Take articles or find our latest article on the Director’s Take spotlight page.

This article is provided in the author’s official capacity as the Commission’s Director of the Office of Investor Education and Advocacy but does not necessarily reflect the views of the Commission, the Commissioners, or other members of the staff.