Thursday, November 8, 2007

How to Avoid Stock Market Scams

Stock Market
As the prices increase fast nowadays, people would instantly like to grasp any opportunity that will make them money. This is a chance for deceitful people to take advantage of them.

There are many uncontrolled scams today that make people become so alert of them. Even when they realize that there is a constrain to be scammed out there, they still could not differentiate what is a scam and how they can avoid it.

Now, one of the proliferating scams is the stock market scams. A lot of people are getting tempted to join these, simply because their offer seems so hard to resist.

Why? Because who would refuse to accept a “get rich quick” strategy? These are just little things but are actually bigger problems than what you thought they are.

Here is a list of the common stock market scam lurking mostly in the internet today:
This is important for people to know what stock market scams are and how can they avoid them.

1. The “Pump and Dump” stock market scam

This type of stock market scam is mostly spread in the Internet. Here, people usually get to see messages posted in the Internet advocating them to purchase a stock at once. This type of scam also urges those who have stocks already to sell their stocks immediately before the value depreciates.

These misleading scammers claim that they have reliable sources about a bullying development. They even claim that they utilize a foolproof combination of the stock market and the trade and industry data so as to get some stocks.

The bottom line is that this type of stock market scam is harmful especially to those who are starting small. In reality, people behind this scam would want to manipulate the stock market through small businesses because small businesses are easier for them to manipulate.

2. Pyramid scam

Just like its motherboard, this pyramid scam in the Net tries to accumulate money from the consumers by letting them invest their little amount of money and grow it really big, provided that they recruit more people into the company.

These two are the most common stock market scams lurking in the Internet today, and the only way to avoid them is information. It’s a must that people should be aware of them, know their styles, and how they recruit people. If in case, they cannot determine if it is a scam or not, they should verify the claims from the right people. That’s the simplest thing to do to avoid getting trapped.