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<h4 class="dechead">On One Hand: No Investment is Safe
Of course, no investment is safe. Any time you hand over your money to someone else on a promise of getting it back along with a return, there is a risk that you will not only not profit, but may actually lose money. Your investment provider should inform you beforehand about the risks involved.
On the Other: They Have Been Known to Stretch the Truth
The Charles Schwab YieldPlus Fund was targeted for lawsuits in 2008 and 2009 charging that their representatives misrepresented the level of risk involved in the funds to their clients. In December 2009 one of the clients was awarded damages by the Financial Industry Regulatory Authority (FINRA).
Bottom Line
The Financial meltsdown of 2007 to 2009 revealed to everyone how tenuous and fragile the entire financial system of Western world really is. To find fund managers misrepresenting the level of risk in their investments should not surprise us at all. Buyer beware.
Source:
"Saiontz & Kirk, P.A.: Charles Schwab YieldPlus Fund Lawsuits"
"Marketwire: Charles Schwab Found Liable in FINRA Arbitration"; 2009
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