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Lousy investment advice sank my savings

Gail pinned her hopes on stocks that were overhyped on the Internet.

"Travel!" said Gail, when her friends asked her what she planned to do in retirement. But, she didn’t have quite enough set aside in her stocks and savings to visit every place she wanted to see. Gail began looking for ways to increase her investments, and she began researching inexpensive stocks that might grow quickly.

In her research, Gail signed up for a few online newsletters claiming to offer the best stock advice, one of which talked a lot about new bio-tech companies on the cutting edge. Gail put a thousand dollars in one of the stocks touted by the newsletter. A few weeks later, she invested more money in a different company that the newsletter recommended. At first, the prices of her new stocks rose. But before Gail thought to sell the stocks for profit, these prices fell dramatically, leaving her with a little under half the money she had invested.

Later, Gail attended an investment workshop where she learned about “pump-and-dump” scams. She realized she had been a victim to this type of scam, where newsletter writers are paid to promote a stock, inflating its worth, for the profit of only a handful of dishonest investors. Now, Gail continues to grow her travel savings, but she is cautious to research a new company on her own before investing. “I’m still going to trade stocks,” she says. “But I’m going to be a lot more careful about where I get advice.”

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