Why The Biggest Stock Scam Is Sitting In Your Email Now
No matter how much of a fortune you have amassed over the years, it is disturbing to know that almost everyone is just 1 financial mistake away from utter catastrophe.
It doesn’t matter if you have your money in the most stable assets of all, or that you have the best hedge fund gurus minding your money. Just 1 big mistake can send you running for cover. Just look at the many stories of successful people who ran into bankruptcy from failed businesses. Some rise above and grasp life by the scruff of the neck, and some fall into financial oblivion.
Failure-to-success stories are big enough to get into the newspapers. But everyday, someone somewhere in the country with outstanding credit card bills is receiving a threatening letter from debt collectors that oddly resembling one from a lawyer. And in many instances, the debt is enough to financially destroy him.
Then there are the victims of scams who get into legitimate debt to fund shady investments. Those are the hardest to swallow. At least with a failed business or bleeding credit card, you knew exactly where you spent the cash. For scams, you spent the money on… nothing.
You might think that you are very careful with you money. You block anonymous calls from your cell phone, you throw unknown emails into the spam folder, you don’t even feel safe enough to use your credit cards online.
Yet despite all these strategies to make yourself a tough target to con-men, they are usually just an arm-length away, waiting for you to bite the bait they have constantly been dangling in front of you.
And in my opinion, there is nothing more shady than stock investing email newsletters.
Stocks are one of the most convenient assets to park your cash. In fact, the first time I had some excess cash, I thought about which stock to buy into. It’s easy to trade, easy to liquidate, and it sure as hell provides a great topic to boast about with friend at dinner.
Because of this, working adults who have reached the stage of thinking how to make their cash pile grow will always have stocks as one of their options.
The problem is… which stock?
This is when they get online to search for information on market darlings to invest in. It is at this time when shady newsletter publishers buy online advertisements that promise to reveal the “secret undervalued stock” to readers.
The sellers of these advertising space often have the technology to sieve down the demographics of web surfers. This makes targeting specific groups of people very easy.
Jolly web surfers then input their emails addresses on websites in exchange for that “secret”. Thousands of prospects are generated this way. What they don’t know is that the people behind the scenes running these lead generation campaigns are more direct marketers rather than financial experts.
Your email will then be either sold to a more extreme marketer, or be marketed to by the collectors themselves.
This is when the party really begins.
The thousands of emails will next be segmented into 2 or more groups. Difference newsletters written by professional copywriters will then be sent to the different groups to filter out those who are the most trigger happy. This is called split-testing in the world of direct response email marketing.
You pragmatic mind will be no match to the craftiness of expert copywriters who make their living getting readers to take action just from a flick of their magic pens. Be warned.
The final list is then divided into two groups. One stock is picked. One group will receive a tip on why that stock is primed to explode, while another group will receive a tip on why it will crash. Now you don’t need to be a genius to realize that one group will find the tips spot on. This builds trust and enhances the level of expertise of the “financial adviser”. They will then be more receptive to the real sales pitch that is coming up next.
Frauds often work this way. The bad guys will allow the soon-to-be victims to first make a little money. Once trust and authority is built, they go for the finishing move.
So let’s say the first group was sent a bullish article on a stock, and it really went up. They will now be sent another newsletter saying that the current price is still undervalued. Encouraging those who missed the boat the last time to get in now. Those who did take action from the first mailing will now be encouraged to buy more.
Now surely you will be able to tell that the objective is to get prospects to open an account with the marketer. And these accounts usually have a minimum deposit of between $25,000 to $50,000. With such huge amounts of money involved per victim, you can probably see now why going through all this hassle is worth it to the people running these operations.
It not over yet.
Let’s say you did go ahead to open that account fully expecting to become a millionaire by the end of the year. What you will find out next is either:
- the broker is really just someone keying and processing transactions with no real expert market knowledge. This is actually the best case scenario.
- you start receiving sales calls ever so often asking you to deposit more funds to buy more up and coming penny stocks. Seen the boiler room movie? You will find it effortless to deposit more money, but have to jump through hoops after hoops to withdraw them (if ever).
- you never see your money again and realize from a quick check that the company is run from an IP address location at an offshore nation with a name you have never heard of.
It’s hard to stomach when all you wanted to do was to make your money grow but ended up losing a huge chunk of it.
I want to end this by saying that there are many legitimate financial newsletters available online. Some are free while some charge an arm and a leg. Some dangle the carrot in front of you and will not reveal their “secrets” until you agree to subscribe to their costly newsletters.
The problem is that shady operators have learned to mimic themselves to the big names in the industry. So for those who don’t know any better, they could be easily suckered into one of these dealings and find their life turned upside down.
Always be careful with the stock investing emails you are subscribed in your inbox. Because your worst financial nightmare could be just a click away.