BRENTHURST WEALTH MANAGEMENT INVESTMENT REPORT · 2018-05-24 · Other investment scams, popular on...
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HARDLY a week goes by without the news of yet another investment scam. Some, like the Madoff and Tannebaum-schemes, run into the billions of rands, while other schemes involve losses running into the tens and hundreds of millions of rands. One of the most important functions at Brenthurst Wealth is to investigate the many investments products on the market before they are offered to our clients. Many of the now familiar scams, such as Ovation, Fidentia and even Madoff’s scheme were presented to Brenthurst, but after a due diligence, turned down. We continue to remain extremely vigilant in this regard and will only offer investments to our clients which offer the highest standards of safety and security. The downturn in financial markets have exposed the fault-lines of many dubious investment schemes, many related to property. A Sunday newspaper, Rapport, calculated the other day that more than R5 billion has been lost so far this year in a range of failed investment schemes in South Africa alone. The sharp drop in interest rates has also created a fertile breeding ground for many other potentially dangerous investment schemes, offering above market interest-rates to desperate investors. A year ago investors were earning up to 13% on solid fixed investments with banks. Now the best rates vary between 7% for money market rates to 9,75% on RSA Retail Savings Bonds. Newspapers are full of adverts offering substantially higher interest rates. One hotel- building scheme in the Cape, which I have personally investigated, is offering rates up to 18% per annum, more than double the going rate elsewhere in the market place. This alone should serve as a warning to potential investors that there is enormous risk. Ask yourself the question: if this scheme is offering such high interest rates, why is the development not funded by commercial banking operations? The reason, most probably is that SA’s banks have looked at the investment merits of the development and have turned it down. What then should potential investors look for when they are offered an investment op- portunity which at first blush looks to good to be true? ISSUE EIGHTY ONE INVESTMENT REPORT By Magnus Heystek—Investment Strategist JULY 2009 BRENTHURST WEALTH MANAGEMENT HOW TO AVOID INVESTMENT SCAMS www.brenthurstwealth.co.za DATE: WED, 5th AUG 2009 TIME: 09H00 TO 13H00 VENUE: BRENTHURST AUDITORIUM , BLD 2 CNR WILLIAM NICOL & FOURWAYS BOULEVARD, FOURWAYS RSVP: ANTJE +27 11 799- 8100 [email protected] Please book in advance as seating is limited!
Transcript of BRENTHURST WEALTH MANAGEMENT INVESTMENT REPORT · 2018-05-24 · Other investment scams, popular on...
HARDLY a week goes by without the news of yet another investment scam. Some, like the Madoff and Tannebaum-schemes, run into the billions of rands, while other schemes involve losses running into the tens and hundreds of millions of rands. One of the most important functions at Brenthurst Wealth is to investigate the many investments products on the market before they are offered to our clients. Many of the now familiar scams, such as Ovation, Fidentia and even Madoff’s scheme were presented to Brenthurst, but after a due diligence, turned down. We continue to remain extremely vigilant in this regard and will only offer investments to our clients which offer the highest standards of safety and security. The downturn in financial markets have exposed the fault-lines of many dubious investment schemes, many related to property. A Sunday newspaper, Rapport, calculated the other day that more than R5 billion has been lost so far this year in a range of failed investment schemes in South Africa alone. The sharp drop in interest rates has also created a fertile breeding ground for many other potentially dangerous investment schemes, offering above market interest-rates to desperate investors. A year ago investors were earning up to 13% on solid fixed investments with banks. Now the best rates vary between 7% for money market rates to 9,75% on RSA Retail Savings Bonds. Newspapers are full of adverts offering substantially higher interest rates. One hotel-building scheme in the Cape, which I have personally investigated, is offering rates up to 18% per annum, more than double the going rate elsewhere in the market place. This alone should serve as a warning to potential investors that there is enormous risk. Ask yourself the question: if this scheme is offering such high interest rates, why is the development not funded by commercial banking operations? The reason, most probably is that SA’s banks have looked at the investment merits of the development and have turned it down. What then should potential investors look for when they are offered an investment op-portunity which at first blush looks to good to be true?
ISSUE EIGHTY ONE
INVESTMENT REPORT
By Magnus Heystek—Investment Strategist
JULY 2009
BRENTHURST WEALTH MANAGEMENT
HOW TO AVOID INVESTMENT SCAMS
www.brenthurstwealth.co.za
DATE: WED, 5th AUG 2009
TIME: 09H00 TO 13H00
VENUE: BRENTHURST AUDITORIUM , BLD 2 CNR WILLIAM NICOL & FOURWAYS BOULEVARD, FOURWAYS
RSVP: ANTJE +27 11 799- 8100 [email protected]
Please book in advance as seating is limited!
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HERE IS A CHECKLIST YOU SHOULD USE TO MAKE THAT DECISION 1. UNDERSTAND THE INVESTMENT STRATEGY. Some investment opportunities appear alluringly simple because they are described in impressive, complicated terms. Investment strategies should be clear & understandable. The nature of risks involved can vary widely and should be well understood. Even legendary investors such as Warren Buffett and Peter Lynch advise people only to invest in something that they understand. If you don’t understand it—stay away. 2. MATCH INVESTMENT STRATEGY TO REPORTED PERFORMANCE. One of the red flags in the Madoff affair was that reported performance was too consistently good. This did not match the performance of other, similar types of investments. Other investment scams, popular on the internet purport to use ultra safe “prime bank” financial instruments from the world’s largest banks. Emails that promise double digit returns are incongruent with they safe investment strategies they seem to offer. Also, find out if the firm has its reported numbers audited independently. If not, that should be a source of concern. 3. WATCH FOR EMAIL SOLICITATIONS AND INTERNET FRAUD. Anyone who uses the internet regularly will have been approached some or other wonderful investment offering, ranging from the infamous 417-scams emanating from Nigeria, to purported Lotto winnings. The internet is a safe and low-cost way to reach millions of people. I read somewhere that email-scammers have a success rate of 1 in 12 million emails that they end out. Online bulletin boards and electronic newsletters are also fer-tile ground to disseminate false information on thinly traded stock or for pump-and-dump schemes. They send out won-derful information on a small stock or share, only to be selling when unsuspecting investors start buying the same shares on their recommendations. 4. BE WARY OF “SURE THINGS”, QUICK RETURNS AND SPECIAL ACCESS. Legitimate investment professionals do not promise sure bets and make outrageous claims about future returns. They know how dangerous and difficult investment markets can be. The Madoff-scheme was also based on the “by invitation only”-principle. In some cases he rebuffed people several times before they were “invited” to invest their money with him. Also, understand clearly the terms by which you can redeem your investment and the cost thereof. Often this is one of the most important considerations but is one that people rarely consider. 5. UNDERSTAND WHAT, IF ANY, REGULATORY OVERSIGHT EXISTS. Try and stick to investments that fall under some kind of regulatory board, such as the Financial Services Board, the Reserve Bank or are listed on a formal stock exchange, such as the Johannesburg Stock Exchange. These formal types of investments offer a wide range of investments for virtually any kind of investment need and are highly regulated and controlled. Why go and look for an investment which might offer a slightly higher return but risks all of your capital? 6. ASSESS THE OPERATIONAL RISK AND INFRASTRUCTURE. Any investment management operation should have a physical infrastructure for trading and administration. Ask to see them and inquire about the firm’s process and controls. It is important that a firm have separate, independ-ent operations for asset management, trading and custody to provide checks and balances against fraud.
7. ASK ABOUT INDEPENDENT AUDITS AND WHO PERFORMS THEM. An auditor should be independent, reputable and congruent with the size and the scope of the investment operation. 8. ASSESS THE PERSONNEL. Ultimately, the reliability of any operation is predicated on the integrity and competence of its people. So find out who make the investment decisions, on what basis and who implements the investment strategy. They should be separate people with relevant experience, education and training. Credible investment professionals will speak comfortably and knowledgeably about their professional standards.
HOW TO AVOID INVESTMENT SCAMS
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9. PERFORM A BACKGROUND CHECK. Since 2004 all investment advisors or advisory firms need to be listed with the Financial Services Board. Check their credentials on the FSB’s website (www.fsb.co.za) and make sure that their record is clear. However, it often happens that people who are registered with the FSB use this veneer of respectability to sell other, unregulated and highly dangerous investments. Make sure the product is also regulated. 10. LIMIT YOUR EXPOSURE. It always amazes when I read or hear about people who have lost “all their money” with a failed investment scheme. One understands that investments sometimes entail risk: all investment professionals know this. But when people break the rules of diversification and put all their eggs in one, shaky basket, then it is hard to feel sorry for such foolish be-haviour.
KNOW YOUR RIGHTS WHEN BEING ARRESTED ON OUTSTANDING FINES
THE Jhb Metro Police, Cape Town Metro Police and other traffic cops have re-cently developed the nasty habit of locking people up for unpaid fines. These road blocks are typically only happening in and around more affluent areas where their "hit rate" will be higher on traceable entities, with more "fixed" abodes when, as we all know, primary daily offenders in their mini busses literally get away with murder because the cops are too scared to root them out of the townships, or the justice system has no means of putting them over a barrel like the majority of "soft" citizens.
THEY CAN ONLY ARREST YOU IF: 1. They have the ORIGINAL WARRANT FOR YOUR ARREST with them. A copy isn't good enough, saying it's at the station isn't good enough either. They have to show it to you there. 2. They have to prove that you RECEIVED THE SUMMONS IN PERSON. It either had to be delivered to you in person or you had to collect a registered letter from the post office (if they cannot prove you personally received the relevant summons, the warrant of arrest is not legal either). 3. If you do get stopped and they want to arrest you, demand to SEE THE WARRANT AND PROOF YOU RECEIVED THE SUMMONS (i.e. your own signature on the document when delivered to you). 4. If they don't have it THE ARREST IS ILLEGAL — REFUSE TO GO. If they still arrest you INFORM THEM THAT YOU WILL PRESS CHARGES AGAINST THEM FOR ILLEGAL ARREST (record everything that is said to you, as well as the chronological procedure of events in detail). These details may well stand you in good stead for a strong case. 5. Technically, if your arrest is illegal, the taking possession of your car by the police and its driving thereof while you are in custody MAY ALSO CONSTITUTE THEFT. 6. When you are released, GO TO THE SAPS IMMEDIATELY AND LAY A CHARGE AGAINST THE ARRESTING LAW BODY AND RELEVANT OFFICIAL.
MAKE SURE YOU CARRY YOUR DRIVER'S LICENCE WITH YOU!
HOW TO AVOID INVESTMENT SCAMS
DISCLAIMER: Brenthurst Wealth Management is an authorized financial services provider Reg No 2004/012998/07 FSP No. 7833. This newsletter should not be viewed as investment advice as each individual investor is different and has different investment needs. Please consult any one of our highly qualified investment advisors before acting on the advice and recommenda-tions contained in this newsletter. Kindly contact BWM at (011) 799-8100 for an appointment.
BRENTHURST WEALTH MANAGEMENT (PTY) LTD BUILDING 3 PRISM OFFICE PARK, CORNER FOURWAYS BOULEVARD & WILLIAM NICOL DRIVE, GAUTENG, SOUTH AFRICA Phone: (011) 799- 8100 CT: 0861 799 8000 Fax: (011) 799- 8101 Website: www.brenthurstwealth.co.za
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IN CELEBRATION OF NATIONAL WOMEN’S DAY BRENTHURST WEALTH MANAGEMENT PROUDLY PRESENTS AN INVESTMENT SEMINAR FOR WOMEN BY WOMEN FOCUSING ON “FEMALE FINANCIAL INDEPENDENCE.”
WE HEREBY WOULD LIKE TO INVITE ALL LADIES TO ATTEND OUR VERY FIRST BRENTHURST WOMEN’S SEMINAR
WEDNESDAY, 5TH AUGUST FROM 09H00 TO13H00 @ BRENTHURST AUDITORIUM, FOURWAYS.
Our speakers range from successful businesswomen to retail fund managers from top investment houses.
WOMEN’S INVESTMENT SEMINAR, 5TH AUG 2009
OUR GUEST SPEAKERS ARE:
Michelle Burger: BRENTHURST WEALTH MANAGEMENT Certified Financial Planner, CFP® “General Financial Planning for Women”
Nadine Van Taak: INVESTEC ASSET MANAGEMENT Desire Bekker:
Business woman & owner Of “Girls on the Move” “Starting a Female Empowerment Business”
Bianca Dippenaar: STANLIB DR. Annique Theron:
Business woman, researcher & founder of Annique Rooibos Products. Responsible for the discovery of the anti-allergic properties of Rooibos Tea.
PROGRAMME: 09:00-09:30 Registration & Breakfast 09:30-10:45 Presentations 10:45-11:15 Morning Refreshments 11:15-12h20 Presentations cont. 12:20 -13:00 Discussions & Questions
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INVESTMENT STRATEGIST
MAGNUS HEYSTEK [email protected]
TAX & ACCOUNTING SERVICES :
GAVIN BUTCHART
MARKETING:
SUE HEYSTEK [email protected]
CLIENT SERVICE:
VIRASHA MAHARAJ [email protected]
ESMERIE LOOTS
CELESTE PHAKHATI [email protected]
ALLIE SIKHOSANA
ANTJE MOUTON [email protected]
INVESTMENT ADVISORS:
BRIAN BUTCHART
JOHAN BURGER [email protected]
RENEE EAGAR
MICHELLE BURGER [email protected]
SONIA DU PLESSIS
FOR MORE INFORMATION ON FINANCIAL MATTERS DO NOT HESITATE TO CONTACT ANY OF OUR HIGHLY QUALIFIED FINANCIAL PLANNERS.
A RICH, ABUNDANT FUTURE
CAN BE YOURS WHEN YOU THINK
ABOUT MONEY IN THE RIGHT WAY!
Suze Orman
