The Madoff Mistake

by M.E. Simpson in Crime, April 25, 2009

Taking personal responsibility for finanical investment and making wise decisions.

Which brings us to the third point about investing: if you do not see any serious institutional investments or endowments, and the broker is evasive about answering questions like consistent returns and in-depth strategies – details that a legitimate institution demands to know, and the broker should be answering for his or her client – these are two very big warning signs. According to several Madoff victims, he also implied it was something of a secret club – that only 100 or so members were involved, when in actuality, thousands were duped. The secrecy no doubt, made the investors feel as though they had stumbled on a goldmine hidden from the rest of the financial investment world, when in fact, it should have been big yellow traffic light to them.

It is a shame that so many had to lose so much in order to warn the rest of us about how to invest what little we may have right now, and it would be nice to see the Madoff fund that has been started give a little something back to the indivduals that have lost everything.

However, it is a blazing florescent green dollar marquis for the rest of us to avoid. 1. Do not invest all of your money into any one capital, no matter how lucrative it may seem, or how well it has done – let Enron and now Madoff be an example of that. 2. Be aware about investing your money with anyone or any company that is evasive about answering questions about their strategy, or how they receive such consistent returns (if that is the enticement), and other matters that should be readily made known to you as an investor. 3. Be wary of investing your money with “secret clubs,” especially when they don’t seem to have any backings by institutional firms or endowments. If any company has all three of these factors going on, it may be a wise idea to back off and take your money elsewhere.