Investments that are too good to be true

[cyclone]

Investments that are too good to be true
Ad drive shows would-be investors drawn to tempting opportunities but many also demonstrated a good dose of common sense, scepticism

by Lorna Tan
PUBLISHED 30 April 2017

Investors who recently responded to advertisements enticing them with attractive, guaranteed returns if they co-own a Caribbean resort or invest in a gold scheme have been surprised to find they were part of an anti-scam campaign.

The two schemes, touted as opportunities of a lifetime, are part of a "Beware! Investment Scams" programme organised by the financial education programme MoneySense and the Securities Investors Association Singapore (Sias).

The innovative campaign from April to July aims to caution consumers to be alert to investment scams. It wants to raise awareness on how these scams typically operate, including how to identify them through red flags, as well as educate the public on resources to refer to before committing to an investment.

The SantaQuay Resorts advertisement stated that for as little as $10,000, you can reap guaranteed annual returns of 24 per cent plus get your capital back after two years by investing in a luxury freehold resort in the Caribbean.

The other advertisement, for the gold scheme, offered a "golden opportunity" to invest in limited-edition coins so as to "benefit from the price momentum of gold, which has been rising in recent months".

More details in http://www.straitstimes.com/business/inv...to-be-true

[Temperament]

i think the G or MAS would be more effective if there is a market monitoring system set up

But Caveat Emptor is still the main policy, i suppose.

On the other hand, there are a lot of gullible people or too obliging people that can not say "NO" to "friends" and relatives.

Some even to strangers (scamers)!

i personally have some relatives and friends who are like that.

Anyway if someone (scamer) targeted you(me ), (like in the past Sunshine Empire), it is not so easy for you(me) to see through them.

Don't think so?

Caveat Emptor lol!

[Big Toe]

Good job on their part to warn people of scams but not sure if it will save people from the greed monster.

The opposite is true nowadays in business, especially in retail.
After studying the supermarket(s) in greater detail including what constitutes their 20+% gross margin, I have come to the conclusion that losing some money is part of the strategy. Some products are priced below cost(spoke to some of their suppliers and verified to be true) in order to draw in the crowds and usually some money can be made as people tend to buy more then just a few items when supermarket shopping.(Nett spend per receipt is usually quite high).

So when a business has some parts which is money losing, it may turn out to be a great business.
The money losing portions will also discourage new entrants.
When a business promises big money in short time frame, don't bother.

[d.o.g.]

Better late than never I suppose. I was warning everyone I knew 10+ years ago about OilPods, Profitable Plots and the gold buyback schemes. By the time MAS decided to do something about these hundreds of people had already lost millions of dollars. The next ones up are probably P2P lending and Kickstarter projects. Too easy to defraud people and explain it away with defaults and failed projects.

[weijian]

The opposite is true nowadays in business, especially in retail.
After studying the supermarket(s) in greater detail including what constitutes their 20+% gross margin, I have come to the conclusion that losing some money is part of the strategy. Some products are priced below cost(spoke to some of their suppliers and verified to be true) in order to draw in the crowds and usually some money can be made as people tend to buy more then just a few items when supermarket shopping.(Nett spend per receipt is usually quite high).

Not just for retailers. For a long time, semiconductor equipment manufacturers (eg. AMAT, LAM, ASML) have been mostly selling their equipment at breakeven costs (after accounting for depreciation) at best. They make it up via expected future service contracts and also selling software/hardware upgrades to boast uniformity, product throughput, expected tool uptime and defectivity reduction processes. They know they have a captive audience once they are successful in getting you to buy their tools. In the SIAEC thread discussion some time back, it was discussed that aircraft/engine/component manufacturers were also starting to sell at costs by binding service contracts with buyers. So in some ways, the service contract is in the icing on the cake.

That brings me to the question of those fastfood peel-off coupons that we find them in our mailbox or distributed together with a newspaper. What's their catch?

P.S. This "anti compartmentalization" tactic of supermarket retailers apparently never managed to get past my mum. She would always make a special trip to the supermarket to get only that "on sale item". I would lament at that inefficiency only to realize her wisdom (and my own foolishness) years later.