[TheGodfather]

I recently stumbled on online investment plans, and at first glance they seem great. You can start with a very low investment, sit back let it grow at 3-4 % and withdraw as quickly as you like.

Am I missing something here? Does any one have any experience with online investment plans?


I was checking out different companies on this site http://www.hyip.com/

[The Stealthy One]

Most (if not all) HYIP programs are scams, and are open only about a month at most, before they take off with your money.

HYIP.com looks a little more legitimate than that, but I'd still stay away. It's not worth the risk. You can make 3% to 4% with an online savings account from emigrantdirect.

[akula]

Originally Posted by TheGodfather

Am I missing something here?

Yes. You are evaluating an investment based on expected return (i.e "high", "2% - 4% daily earnings"). This is wrong. In evaluating an investment you gotta look at the underlying securities you're being offered (i.e. debt or equity) and the quality (i.e. S&P rating, beta) of the security.

That's the correct way to analyze investments. With HYIP, the stuff being sold is designed for illiterate, lay people. The promoter will pitch something like "Stable 2% - 4% daily earnings" without disclosing what it that the promoter will actually do with your money. Most often, he will use it to pay off the suckers who got recruited before you did, and for his mistress / gambling habit rather than make legitimate asset allocation decisions (i.e. buying up a portfolio of preference stock in a bunch of IT startups or something..)

Originally Posted by TheGodfather

Does any one have any experience with online investment plans?

Yes, I do. As a financial planner I've had to research how these funds get started and as a lawyer, I've had to report on how the promoters get prosecuted.

[NeeJam]

Moved to the correct section

[TheGodfather]

Well, i will be sure to stay away.

Thanks