| Online brokerages have revolutionised the investing | | | | Manipulations of stock price can be achieved in subtle |
| industry. This has enticed many people to give | | | | ways. Money managers have the ability to start |
| investing a try even if they have no idea what theyre | | | | rumors about stocks that they would like to move |
| doing. The process requires a lot of research and a | | | | without paying a large price. The rumor works to lower |
| little luck. A quick search online can bring an individual | | | | the price of the stock and create liquidity in that |
| investor all the information they need in order to make | | | | company™s stock. The rumors run unchecked |
| a few simple decisions. Unfortunately, there is a lot of | | | | and spread through the market like wildfire. |
| misinformation out there regarding investing in the | | | | For example, if a money manager wants to purchase |
| stock market and in reference to specific stocks. The | | | | some stock in Company A, they can start a rumor |
| process of manipulating potential investors to scam | | | | that the company is on the verge of bankruptcy. This |
| them out of their money has followed the stock | | | | lowers the price of the stock and allows the manager |
| market into the 21st century and online. Dont be | | | | to purchase it at the desired rate. This works in the |
| scammed out of your money read this article and | | | | opposite way as well. If the manager wants to sell |
| avoid the pitfalls. | | | | stock for Company B, a rumor can be started about |
| 1. Pump And Dump | | | | an emerging invention from that company in order to |
| In this scam, you are misled about the projected | | | | inflate the stock price. These subtle attempts at |
| earnings and growth of a company. Uninformed | | | | manipulation can be the hardest for investors to spot, |
| investors purchase the stock. The price tends to rise, | | | | and therefore the most difficult to avoid. Since rumors |
| and as it does, the original scammers sell the stock off | | | | are part of the business of the stock market it is hard |
| to new uninformed investors and take the profits. | | | | to track down where the rumors started. |
| Once all the hype drives up the price high enough and | | | | Additionally, there is no paper trail to track down the |
| the accumulation pressure disappears, the stock | | | | money managers who practice this sort of |
| crashes and the investors lose money. | | | | manipulation. Fortunately, these inflations or devaluing of |
| 2. Avoid Penny Stocks | | | | stocks are very short lived. Within a short period of |
| Penny stocks are stocks less than $5. 00 in value. The | | | | time the rumors are proved untrue and the stocks |
| reason they are so low is because the company is | | | | bounce back to their true value. These schemes |
| probably going bankrupt. To avoid the majority of | | | | fortunately never have any long term impact on the |
| these scams, avoid investing in penny stocks. The | | | | market. Maintaining a long term investment focus of |
| hype associated with pump and dump scams is similar | | | | owning good companies for long periods of time will |
| between scams. The fake press releases and | | | | offset any of these manipulative rumors. |
| research reports always tout the given company as | | | | 4. Manipulation |
| being on the verge of a world changing technology, | | | | If you want to play with the big boys, you have to be |
| cure for a disease or fantastic new product. The | | | | able to take a little bit of risk when you invest. |
| focus is always on the glorious future of the company, | | | | Cheaters and manipulators exist in every industry, and |
| but very little information is given about the current | | | | are especially concentrated in an industry that is full of |
| status of the company in question. | | | | money like the stock market. Having a diverse portfolio |
| 3. Rumors | | | | of stocks can surely save you from losses that would |
| The second type of stock market scam is | | | | otherwise hurt you financially. |
| characterized by rumors and traders tricks. | | | | |