How to spot a lousy investment

Oh, Yeah!  There are some great hints in this article:

There’s a terrible investment being sold right now — a real dog. Let’s not get into names.

As an editor once warned me, no matter how critical you are, you’ll end up generating new customers. That’s because crummy investments often have eye-popping short-term numbers, and once you mention a 25% gain or a 7% yield, some people stop reading. Besides, Wall Street is always peddling bad stuff.

1. So instead I’m going to give you five signs of a stinker, whether the market is up, down, or sideways. Spot one, and you should be skeptical. Spot two or more, and you should run away.

1. It’s supposed to be the teeniest bit riskier than the competition, but much more profitable.

Investment banks and pension funds were suckers for this line when they bought toxic mortgages that carried AAA credit ratings. But individuals get pulled in too.

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via How to spot a lousy investment – Feb. 23, 2011