Physical Precious Metals
CRA is not the only agency that sends out refund checks. The FTC or Federal Trade Commission sent some checks totaling more than $2.4M to over a hundred of customers who’d fallen victim of scheme on precious metals. The fraud has conned consumers into purchasing precious metals on credit without disclosing any significant risks and costs, including the likelihood that purchasers would have to pay a lot of money or lose investments.
This might sound good news and with fraud standards where majority of victims do not get any money back at all, well it is. However, such refund checks represent only seventy percent of the total amount that investors have lost.
Precious metals may play a beneficial role in establishing a diversified portfolio, yet several investments are better than some. Follow these rules in order for you to avoid some issues in terms of physical precious metals investing:
Check the Background of the Salesperson Before You Consider Investing
Even if the firms providing the precious metals to retail customers don’t need to be registered with private or federal sector securities regulator once the metal is delivered within twenty-eight days, the number of the sales experts involved in the enforcement actions was registered previously with NFA or National Futures Association. To know whether the individual or firm is registered with CFTC or a member of NFA and whether the individual or firm was the subject of disciplinary actions. It is also a great idea to check the background of the investment professional with the use of the FINRA BrokerCheck and to do online search.
Always Say No to Salespeople Who Are Pushy
There should be no reliable investment professionals that must push you into making an immediate investment decision or would tell you to act today. Although no fraud will take place, this kind of pressure is not appropriate. Be wary of the unsolicited calls. Some persuasion tactics like dangling the prospect of big profits are frequently used.
Get Full Accounting of the Fees
There’s often a fee on account opening with physical precious metals investment that can be lots of dollars. There are also commissions that can be fifteen percent or more of your own investment including leveraged portion. Add in the management fees, storage fees, as well as ongoing interest on a loan for a leveraged portion of precious metals purchase. You might find that you’d have to earn high ROI just to break even. This could be hard to make money on the direct investments in the physical precious metals.
Investors must be aware that the direct investments in the precious metals aren’t covered by some organizations like SIPC or Securities Investor Protection Corporation, which offers limited coverage to the investors on their accounts on brokerage if the firm becomes insolvent. While investing in precious metals could give you more opportunities, always be aware of the different risks that could come with it and be ready to do your own homework in order for you to understand more and learn about this kind of investment.