Many of you might be frustrated with topsy-turvy of equity markets.
Share markets have moved nowhere since 2007, although they made a new
high last year (2013).
Returns generated by equities &
equity oriented mutual funds might have been lacklustre for many
investors.
Returns on fixed deposits have barely managed to beat inflation which has
been persistently high for last few years.
Taking advantage of this, some companies have promoted ponzi schemes
promising super normal returns.
Such schemes have proliferated in the recent past.
What are Ponzi Schemes..?
In simple words ponzi schemes are fraudulent investment schemes which
promise to generate unbelievably high returns like doubling your money in quick
time.
Initially these schemes might yield good returns. But, eventually,
investors do not only lose money. But, are left high and dry since ponzi
schemes are not strictly regulated and investors bear the risks associated with
investment.
Why people get lured to Ponzi Schemes..?
It is often greed of generating higher returns entices people to invest
in ponzi schemes.
These schemes, on many occasions, provide high returns till they get
popular to become big enough for promoters to run away with monies.
Src: www.personalfn.com
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