SEC cautions investors on ‘get rich quick’ schemes

The Director­ General of the Securities and Exchange Commission, Reverend Daniel Ogbarmey Tetteh, has cautioned investors and the general public on the repercussions of investing in ‘get rich quick’ or Ponzi schemes and investments which promise high returns.

 “Anytime anybody tells you that this return is high, sure banker, low risk, it’s likely to be a scam. Just look for the exit and run as fast as you can,” he warned.

 According to him, high returns in investing comes with very high risks that may run into the loss of huge sums of money stressing the need to understand the tradeoffs between risks and returns before making financial decisions.

 Ogbarmey Tetteh stated a culture where people ask, “What is the best investment? Which one gives me the highest returns? Anytime there’s high return, it also means that there is high risk.

Anytime anybody proposes an investment solution and they say that the risk is low but the return is high, please look for the exit door and run as fast as you can.”

 Speaking on Accra based JoyFM radio station monitored by the Ghanaian Times in Accra Mr Ogbarmey Tetteh also stated lovers of high returns should be ready for the outcome of their investments because they come with very high risks.

 Mr Ogbarmey Tetteh also advised that it is important one assesses his or her risk tolerance levels before making any investment.

“Unfortunately, what many people do is a mistake. They just ask, what is the highest return I can get? And then they go without understanding that there is that a trade off”, he said.

According to him, risk must be compensated for. If you are not taking a lot of risks, then you don’t really have to be compensated.

 “Anytime there is high compensation, there’s high return, they may not be explicit about it but there is a lot of risks,” he stressed.

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