Who is a vigilant investor?
The vigilant investor:
> understands that all healthy humans are vulnerable to investor fraud
> is aware of his cognitive biases and compensates for them
> understands that scam artists target accomplished people not just because they have money, but also because it is easier to manipulate their pride
> does not count on the investment cops to keep her safe
> investigates the people behind the proposed investment, using regulatory websites etc
> insists on seeing evidence of profitable trading and avoids anyone who is unwilling to be transparent
> does not invest if he does not understand the investment
> avoids investments that encourage investors to recruit their friends and family
> understands that the most dangerous scams look perfectly legitimate and never sound too good to be true [investments that sound too good to be true and offered by amateur scamsters]
> confirms the identity of those who vouch for an investment
> talks to people at the business from which the money flows to confirm the salesperson's representations
> remembers that scam artists love the headlines and is suspicious of any investments that seems especially timely
> checks on claims of patents for new technology through the US Patent and Trademark Office
> confirms the use and profitability of new technology by talking to the end users
> is never blinded by celebrity or power and avoids investments offered by name-droppers
> remembers that savvy scamsters rent the credibility of those whose others trust
> questions trusted advisers about commissions that they receive from any investment that they recommend
> says "NO" to a test-drive of an uncommonly profitable investment
> never accepts a salesperson's offer to serve as the investor's protector and stays alert to the effects of the loss aversion bias
> remembers that citing the law does not indicate compliance with the law
> accepts her public duty to help expose investment crime
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