VERNON

I am not recommending that you speculate with any portion of your portfolio. However, recognizing that some investors like to speculate with a small portion of their assets, set out below are thoughts on how to better avoid the unnecessary and uncompensated risks embedded in many speculative investments.

As a starting point, regulators such as the SEC have checklists on their websites you should review. These checklists instruct you to make sure the salesperson is licensed, stay away from investment pitches that promise high and consistent returns with low risks, avoid investing in secret strategies, and be wary of sales pitches that create a sense of urgency or exclusivity.

Additionally, from my perspective, your decision to invest in a high risk “flyer” should NOT be based on a recommendation from a friend or professional. Suspect investments are often sold by promoters that spend significant time cultivating relationships with credible…

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