Yesterday, I got a call from a gentleman I had not heard from in a while. He started off pleasantly enough, asking when I left CMA and how business was. I almost laughed when he proceeded to tell me about how his boss a Tullow Oil wanted to send him to Germany to buy some expensive spare parts, but he knew someone in Industrial Area who had them (but he couldn't approach him because they had been competing for the same job). He was therefore giving me the opportunity to make $20,000 per part by investing some of my money (USD 5,000). I was telling a friend about how ridiculous and unimaginative these people were, when he told me that he had fallen for the same confidence scam.
Emerging markets are the destination of choice for investment because their growth potential and investment return expectations are much better than most of the returns in Europe. Also, because our issuers are not highly leveraged by securitization, most of the companies are recession-proof. Uganda is one such country, as evidenced by the over-subscription of IPOs and additional issues in our market. Unfortunately, while this market is a great destination for investors, it has also attracted a number of fraudsters. The investor is the first line of defence against such fraud
There is an old saying "Investors have the hearts of lambs, the feet of cheetas and the memories of elephants". This could be interpreted to mean many investors do not take time to study the market or get equipped to take calculated risks. Instead, they are driven by the emotions of greed and fear, fall prey to unscrupulous characters who steal their money and destroy their confidence even in legitimate investment vehicles.
Before you invest, seek professional advice. Make sure you read everything that is given to you and don't be rushed into a get-rich-quick scheme that requires you to put money up without any guarantees. remember, if it seems too good to be true, it most probably is.
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