Types of Investment

The Investment Loss Recovery Group understands the investment industry. As former licensed securities brokers and former defense attorneys for Wall Street broker dealer firms, we have handled investments and we understand how they are structured. With almost 40 years of experience, we have recovered losses and managed fraud claims across all investment types. We have recovered millions of dollars on behalf of our clients.

We offer the experience and resources of a big firm, with specialized knowledge and attention of a small one. Whether you are a new investor with stocks and bonds, or a sophisticated investor with more advanced investments; we know how to help you recover. Always be on the alert for investment scams, and if you need help to recover losses, we are ready to help.

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Common Types of Investments

There are a bewildering number of ways to invest. Where an investor chooses to invest depends upon the investor’s prior knowledge, risk tolerance, desired returns, and many other characteristics. Below are some of the most common types of investment vehicles:

  • Stocks give investors an interest in a business and may entitle them to dividends. Stocks may also allow shareholders to participate in the management of a business via shareholder meetings. Stock scams may issue stocks in shell companies or stocks that are worth far less than they appear.
  • Bonds can be thought of as a type of loan. The bond issuer must pay interest on the loan over time and the amount of the bond when it is due. Business and government organizations often issue bonds. Many investors think of bonds as a safer class of investment since investment-grade bonds are typically issued by large and stable organizations.
  • Junk bonds are a class of bonds with higher risk and rewards. Junk bonds are issued by organizations with lower and less stable credit ratings. Junk bonds frequently depreciate in value and cost their investor money. Junk bond scams lure investors in with promises of high returns but will drain investors dry.
  • Options are a speculative class of investment. Options give an investor the right to buy something in the future at a particular price. They do not require that the investor do so.
  • Mutual funds are a vehicle for investors to combine their resources. The mutual fund is managed by professionals and focuses on particular investment objectives. Mutual funds vary in size and objectives, but are generally seen as safer investments since they rely on professionals and diversified interests.
  • Exchange Traded Funds (ETF) are a type of investment fund that is bought and sold like a stock. ETFs gather a broad range of securities and then sell shares of the ETF on the market. ETFs may have tax structures that are different from mutual funds and other investments.
  • Structured products are a type of investment vehicle designed to meet a particular objective. For example, if an investor wants to achieve a certain rate of return, a structured product may be available that is built around a specific rate of return with a specific amount of risk. Structured products, in theory, allow investors to manage their risk more efficiently.
  • Private placement programs are a type of investment offered to a curated group of investors. These are not sold on the open market, but are instead offered to investors with specific interests and objectives. Private placements may be faster to complete than traditional public offerings since private placements are not subject to many SEC rules. However, the lack of regulation can easily lead to private placement program fraud.
  • Real Estate Investment Trusts (REIT) are a type of investment vehicle that generates income from investments in real estate. For example, a REIT may hold interests in commercial real estate that is rented to other businesses. Non-traded real estate investment trusts are a type of REIT that is not traded on the open market and may lead to investors funds being illiquid for long periods of time.
  • Hedge funds are a type of sophisticated investment that typically requires a large investment of funds or assets. They are less regulated than some other investment vehicles and less open to new investors. Since they are less regulated, hedge fund fraud commonly occurs.
  • Annuities are a type of investment where investors pay a lump sum or they pay premiums over time for a guaranteed payout in the future. Annuities can be attractive to investors due to the stability that they can provide. However, it’s important to understand how the annuity is structured before you invest.

What Are Common Types of Frauds?

There are many ways to invest, and there are just as many ways to be defrauded. Investment scams are everywhere. If you are looking to invest, don’t be afraid to ask questions and get the information you need so you can invest wisely. Be wary of investments that promise high returns with minimal risk.

A few common types of investment fraud are:

  • Ponzi schemes. These schemes rely on bringing in new investors. The first investors are paid with funds from later investors, generating the illusion that the scheme is a legitimate business. The problem is that eventually it is certain that there won’t be enough money to go around. The scheme will collapse, and investors will lose money.
  • Pump and dump schemes. In this type of scheme, fraudsters own a security then artificially inflate the price through marketing and disinformation. Once the security reaches a certain value, the fraudsters sell their holdings leading to a collapse in the value of the security, thus harming investors.
  • Pyramid schemes are a top-down fraud where fraudsters focus on recruiting investors. Investors pay into the scheme and are pushed to recruit new investors who buy in. Since they don’t actually have an underlying business, they will collapse, and fraudsters will attempt to flee with the money and assets they have collected.

We Focus on Investment Loss Recovery

The Investment Loss Recovery Group knows the investment industry and its challenges. As former licensed brokers and former defense attorneys, we understand each investment and its unique risks. If you have lost your investment and you need help, you can turn to us.

Our experienced investment fraud attorneys will move quickly to protect you and your investments. With nearly 40 years of experience handling investment fraud and similar cases, we work tirelessly to help protect investors and their assets.

Contact us today for a free consultation and learn more about your best legal options for recovery.

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