A WEALTH OF KNOWLEDGE ARCHIVES

Investigate Before You Invest

July 14th, 2011, byMichelle Singletary

Q: How can I buy Scandinavian Income Certificates?

Thomas, Baltic, CT

A: I honestly have never heard of such an investment. So, I did what any good investor should do. I did some research.

I didn’t find any legitimate source of information about what is involved in investing in such certificates, if they even exist. I found some ambiguous blog postings about the certificates, but nothing I would rely on to make an investment decision. One posting said the certificates were backed by the wealth created by Norway’s offshore oil and gas exploration.

Personally, I would not invest in something so obscure. Such investments, with little oversight or independent information, are, at the very least, highly risky and, at the worst, come from scam promoters.

I would suggest you do your own research, and start by going to the North American Securities Administrators Association’s (NASAA) Web site. NASAA is the oldest international organization devoted to investor protection. Its membership consists of the securities administrators in the 50 states, the District of Columbia, Puerto Rico, the U.S. Virgin Islands, Canada and Mexico.

In particular, read this posting: “NASAA Reminds Investors to Investigate Before They Invest.”

“The first step toward becoming an informed investor is to contact your state securities regulator,” said NASAA president and North Carolina Deputy Securities Administrator David Massey. “State securities regulators can help you check out the licensing and background of anyone offering investment advice or selling investments and help you verify that an investment is properly registered for sale in your state.”

The NASAA site also provides links to each state securities regulator. Before investing, check with your state securities regulator.

“An excellent rule of thumb is, if you do not know what it is, nor understand it, do not put your money in the investment,” said Ken McDonnell, director of the American Savings Education Council.

McDonnell says he encourages an individual who needs to investigate an investment option to go to the SEC’s Office of Investor Education and Advocacy Web site or the Financial Industry Regulatory Authority (FINRA) Web site. Both also offer you the option to submit an inquiry to their office.

Last modified: July 14, 2011 at 2:35 pm