Investor 101

Investing may be done in a variety of ways. Your options will be influenced by your objectives, timeframe, and risk tolerance. A strong starting point is to review some of the basics. A wise investor always takes the time to learn the fundamentals of investing and makes well-informed investment decisions.

Investing allows you to put your money to work for you. It entails making an informed decision, which includes conducting research and analysis of the investment opportunities before making the decision to invest. Individuals can invest in a wide range of investment products, but they must be aware that each one comes with its own set of risks

When making an investment, you should be conscious of your investment objectives as well as your risk tolerance so that you can weigh the predicted returns against the risks of investing in any specific product.

Investment frauds are frequently well-organized and difficult to distinguish from legitimate investment opportunities. It is critical to thoroughly analyze each investment opportunity and to resist the urge to rush into a deal or investment opportunity without first conducting thorough research.

ON THE LOOKOUT FOR INVESTMENT FRAUDS

Investment fraud presents itself in a number of ways. Whether you are a first-time investor or have been investing for many years, here are some fundamental facts concerning various types of fraud you should be aware of.

Some red flags to look out for:

  • Returns that are unrealistically high
    • Such as those that can be completed in a short amount of time or with the promise of zero/low risk.
  • Reluctance on the part of the organizer
    • This includes a refusal to supply you with extensive information about the company or its directors and shareholders, as well as financials to back up whatever claims they are making.
  • Companies that are unknown
    • A fraud run by a company you have never heard of and cannot verify. Frauds often involve unregistered companies.
  • Hard Sell
    • You are pressured to make a fast decision, or you will miss out on the opportunity, or you are told that the opportunity is no longer available.

Types of Frauds

An investment scam often presents an investment opportunity that appears too good to be true usually is. It is critical to thoroughly analyze any trade or investment opportunity and to avoid the urge to jump into them.

PUBLIC ADVISORY: INVESTING

The Securities Industry Act 1998 defines “security” as ‘any document or record evidencing ownership or any interest in the capital or debt, property, profits, earning or royalties of any enterprise or proposed enterprise and, without limiting the generality of the foregoing…”

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Before investing, or making a commitment, whether private or public, consult with the following persons to assist you in reviewing the terms and conditions of your investment : an Attorney-at-Law, Certified Accountant or competent financial professional, including reviewing the structure of the company, the directors and any related companies, the incorporation documents, by-laws, financial statements, license/ registration or similar documentation, and any agreements with directors and any related companies. Ensure you thoroughly understand the terms of investment, risks and your rights and privileges BEFORE committing to any investment.

Perform adequate due diligence on the company or investment vehicle, and related individuals. Contact the relevant authority(ies) to determine whether there is any known criminal or civil proceeding or judgment against those parties, or whether they have been previously involved or charged in any investment or securities related claims, scams or schemes.

Ensure you know your interests, rights, privileges, restrictions, and conditions attaching to each class of share as contained in the Companies Act, Cap. 89:01 of 1991, AND the By-laws of the company.

Be wary of ‘investment opportunities’ that emphasize recruitment of members to receive commissions and ‘higher returns on your investment.’

Be wary of local and foreign individuals or companies soliciting investments from members of the public trading in Foreign Exchange (FOREX) or the Cryptocurrency Exchange. Check with relevant authorities to ensure these entities and/or individuals are licensed or registered to do so.

ALWAYS request official receipts for any payments made, in the name of the entity, individual or company you are engaging.

Persons are deemed ,‘sophisticated purchasers’ if falling within the definition as set out in Section 59(2)(d) of the Securities Industry Act 1998, of investments no less than G$500,000.00 (five hundred thousand Guyana dollars), and are urged to be prudent and consult with an Independent Attorney-at-Law, Certified Accountant or competent financial professional before investing.

The Guyana Securities Council urges members of the public to be cautious when considering any investment venture, and to take all necessary precautions, including conducting sufficient due diligence before investing.

DISCLAIMER

This is for information purposes only. This information should not be construed as legal advice, financial advice, tax advice, or subsititue for competent legal advice, financial advice, tax advice, or consultation.