WHY LEVERAGED ETFS ARE DANGEROUS

      Exchange Traded Funds (ETFs) were created to create a more liquid market in sector funds. However, leveraged ETFs are designed to be tactical trading instruments, specifically not for “buy and hold” investors. Because of strict leverage requirements, even if you are correct about the direction of a market sector or the underlying investment, the […]

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PONZI SCHEME MADOFF RECOVERY MAZE

The lower interest rate environment is revealing a soft underbelly of Investment Scams and Ponzi Schemes.  What many of these schemes have in common is the breach of trust, and victims “holding the bag”.  In some cases, a partial recovery of the investment may be possible against a licensed investment professional.  In others, a small […]

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PONZI SCHEME ROUND-UP: 3 STORIES OF FAMOUS PONZI SCHEMES

Ponzi Scheme: What Is It? – We hear the term “Ponzi Scheme” a lot in the news, but do you understand what it means? A Ponzi Scheme is a type of investment fraud that promises investors a substantial profit with little risk. New investors generate returns for older investors, and so on, and so on […]

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PONZI SCHEME ROUND-UP: 3 STORIES OF FAMOUS PONZI SCHEMES

Ponzi Scheme: What Is It? – We hear the term “Ponzi Scheme” a lot in the news, but do you understand what it means? A Ponzi Scheme is a type of investment fraud that promises investors a substantial profit with little risk. New investors generate returns for older investors, and so on, and so on […]

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SHIP OF FOOLS

A recent article called “Ship of Fools” describes the Madoff scandal and its many facets. The article indicates that the scams are avoidable if one asks the following questions. 1. Who is the auditor? Have you ever heard of them? Do they have other reputable clients? Are they independent of the hedge fund? 2. Who […]

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SYSTEMIC RISK AND BLACK SWANS

“Black Swan” events such as Bernard Madoff Ponzi Schemes, earthquakes, tsunamis, have seemingly conspired to compel us to take our eyes off the “ball”. The ball, in this context, may be Financial Services Regulatory Reform, and Health Care Reform, that all agreed were so necessary. Under normal market, negative events generally occur randomly and most […]

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