Anytime an investor is considering Wall Street investing, there may be some people around that are only looking out for their own wallets – looking for an easy way to make money. Investors should be on the lookout for these folks so they don’t get caught up in a situation where they lose money, lose credibility and lose confidence. These unfortunate events occur on Wall Street more often than you may realize, but you can avoid it by knowing how to spot a Wall Street Bully.
First, let’s take a look at The Con Man, who you might be able to relate to by thinking of Bernie Madoff. This type of bully is sneaky and sly because they try to lure investors with promises of market-topping returns with little or no downsides. – Just remember, if the offer sounds too good to be true, it usually is. Madoff, himself admitted that he was operating a Ponzi scheme. He ultimately stole billions of dollars from thousands of investors. Madoff pled guilty to 11 federal felonies and admitted to using his wealth management business as a huge Ponzi scheme. Be sure you know who you are dealing with so you don’t fall victim to the next Madoff.
The second bully to be aware of is The Prognosticator who can be compared to a bad fortuneteller. This bully tried to attract investors with fancy and sophisticated graphs and charts, which they try to convince investors that they can predict where the markets are heading to next. The fact of the matter is, nobody knows what the future holds. If they tell you otherwise, walk away. It’s almost like trying to figure out what the weather is going to be like five weekends from now. You can guess, but the weather changes and is unpredictable.
And finally, the last Wall Street bully you want to look out for is The Guru which you could compare to many money managers who tout their 5 Star ratings. These types of bullies boast about past performance and how well their picks have fared over certain time periods. These so-called geniuses may try to tell you they have unique insights into undervalued companies and if you buy now, you are going to be able to capitalize when they take off. Think about the many price fluctuations and predictions made about companies like Facebook. No one can accurately determine the next successful sector or company. Be very wary of hype and buzz surrounding certain stock picks.