Financial Tip

Common Forex Scams

Forex scams include creating false customer accounts for the purpose of generating
commissions, selling software that is supposed to garner large profits for the customer, false
claims of customers making huge money, the theft of a customer's account and phony marketing.
Forex scams draw customers in with sophisticated advertisements placed in the newspaper, heard
on the radio, or seen on internet websites.
Tags: forex, forex scams, warnings

The Best Time to Invest

The best time to invest is when you have money. This is because history suggests it is not timing
which matters, it is time.

Lending Money versus Investing Money

In stocks you've got the company's growth on your side. You're a partner in a prosperous and
expanding business. In bonds, you're nothing more than the nearest source of spare change.
When you lend money to somebody, the best you can hope for is to get it back, plus interest.

9 Signs of Potential Creative Accounting Practices

Here are nine things investors should watch for as possible warnings of accounting gimmickry:
1. Overly Aggressive Performance Targets: The company ups the ante by continually
setting revenue and earnings growth targets that are far ahead of its competitors'.
2. Overly Aggressive Management: The company's corporate leaders are known to be harddriving types who have a flair for self-promotion.
3. Big Upward Change in Accounts Receivable: This could be a sign a company is trying to pad
revenue; look for more explanation.
4. Big Downward Change in Reserve Account: It could be the product of
overly optimistic assumptions about things like collection of unpaid debts.
5. Big Upward Change in Inventory Account: A favorite accounting gimmick is to overvalue
inventory or create nonexistent inventory.
6. Changes in Accounting Policies: Companies should provide detailed explanations for any
changes in accounting treatments.
7. Frequent One-Time Charges: These could be a sign the company is trying to disguise some
recurring charges as nonrecurring items.
8. Frequent Related-Party Transactions: These could be a sign of potential conflicts of interest if

they involve loans or other transactions with corporate officers.

9. Premature Revenue Recognition: Booking sales before goods are actually sold, or by
immediately booking all the proceeds of a long-term contract.
6 "Facts" About the Stock Market

To help you determine a reasonable rate of return to expect on your stock investments, it might
be helpful to review some "facts" about the stock market:
- The stock market's historical return can change dramatically depending on
the period considered.
- The market tends to revert to a mean.
- History may not be a good predictor of future returns.
- The pattern of actual returns affects your investment balance.
- Historical returns do not include several items that investors must deal with.
- Investors have a difficult time earning historical returns.
These facts are only supplementary facts and have not yet taken into consideration the risk you
are willing to incur. For that reason, it will be up to you as an individual investor to consider how
much risk you would be willing to take on in your investments.