Harry Gross: Veteran should investigate before investing
DEAR HARRY: I'm a retired Vietnam veteran who belongs to a group of vets that has a monthly meeting. At the last meeting, there was speaker who was presented as a financial guru. He told us of a little-known bond fund that has produced an annual yield of
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EAR HARRY:
I'm a retired Vietnam veteran who belongs to a group of vets that has a monthly meeting. At the last meeting, there was speaker who was presented as a financial guru. He told us of a little-known bond fund that has produced an annual yield of more than 7 percent in the last three years. There were a few guys there who confirmed this, saying that they have been with him for years. No one would name the fund, so I am a little leery of the claims, but a few people signed up to invest. They all gave the reason for the secrecy as "he would lose commissions if the name got better known." One vet that I spoke with said he feels safe because the fund's annual report lists its investments by categories such as "Domestic Manufacturers" and "Asian Banks." I am thinking of running a test with him for his minimum of $10,000 to see if he can actually do what he claims. What's your opinion?
WHAT HARRY SAYS: I don't like the smell of this. It's a blind investment with a person you don't know. Giving a money manager of any kind both the ability to invest and custody of the investments is an invitation to get scammed. This is particularly dangerous because of the secrecy. Why not check some of the no-load bond funds offered by companies such as Fidelity and Vanguard?