Bulletin Boards and Newsgroups

I've never understood the fascination some people have for reading online bulletin boards, and in the case of investing, I think it's a terrible idea to believe anything you read in such a place. You aren't going to find unbiased, scientific research from an expert in an online bulletin board. Experts write books and charge us money to buy and read them. Experts hold seminars and appear briefly on Oprah. You're not going to find investment researchers on a bulletin board, so don't even bother reading them. Bulletin boards are run by people who are being paid to create interest in a product, any product, regardless of its worth. Regardless, in fact, of whether a product actually exists.

Another way to make sure you don't wind up being cheated by an investment scam is to only invest in larger, known companies. Many scams target would-be investors by email that claims to let them in on an "insider secret" about a small company that no one has ever heard of. Although you wouldn't think it worthwhile to run a scam that most people would flee from, because fraudulent companies can use bulk emailing programs to send out millions of emails at a time, it's a numbers game. In the same way most of us invest knowing that diversification means that some stocks will do well while others (preferably fewer) will lose money at any given time, specialist in Internet fraud are secure in the knowledge that, out of millions of potential victims, some hundreds will fall for the scam.

Larger companies file reports with the Securities and Exchange Commission: they are listed on the New York Stock Exchange (NYSE), the American Stock Exchange (ASE) or other well-known exchanges. One way to stay safe from Internet investing fraud is to only deal with companies you know.

There are occasional exceptions. If you really believe you've found a company that's new and young, has a great product and is about to make it big, it's going to be tough to hold onto your money. You may find your way to a company that's being run by people who've successfully led other companies to wealth, which is one indicator (but by no means the only one) of a potential winner. But the truth is that without specialized knowledge in the markets, in business and in researching companies from a financial perspective, you could get taken.

Experts evaluate new offerings by making sure the companies truly exist, which can be done by checking out their manufacturing facilities, business partners and recent contracts on which there is public information. They analyze companies' financial statements, and check out the truth about new developments or cutting-edge products. And they look at the CEO, CFO and members of the Board of Directors to see if the people running the company have a record of success. There's a lot to this type of research: it takes someone with the right education to make a good evaluation of the stock offerings of new companies.

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How to stick to a household budget
and have extra
money for investing

1. Customize your budget with your current needs, wants and future goals in mind.

2. Try to think if your budgeting plan as a "spending" plan rather than penny pitching.

3. Sit down and rationally discuss budget goals and spending limits with your spouse. You are bound to disagree somethere, but it important to take the time to find common ground.

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