Fraudulent High-Yield Investments

All of the categories of investments discussed to this point are legitimate investments that hold the possibility of higher return—and, as an investor, you need to weigh the possibility of earning a higher return against the higher risk and costs often associated with them. However, investors looking for higher returning investments may also come across fraudulent investments, including high-yield investment programs (HYIPs).

HYIPs are unregistered investments created and touted by unlicensed individuals, and they, typically, dangle the contradictory promises of safety coupled with very high, unsustainable rates of return. For more information about High-Yield Investment Programs and how to avoid falling prey to them, check out FINRA's Investor Alert entitled HYIPs—High Yield Investment Programs Are Hazardous to Your Investment Portfolio.