Follow These Investment Protection Strategies

Physician's Money DigestDecember 2005
Volume 12
Issue 16

The Individual Investor's Guide to

Recovering Losses

It's a gloomy fact that physicians, who have thereputation for being busy and wealthy, are primetargets for high-pressure stock sales tactics.According to Robert Bertsch (866-362-8000;, a New York attorney andco-author of (Columbia Publishing Co; 1998),salespeople in search of hefty profits simply go wherethe money is, meaning they target potential physician-investors with sizable portfolios. "Many peoplewho are savvy about investments think they can't befooled, and that attitude makes them just as vulnerableas anyone else,"Bertsch says. To protect yourself,Bertsch offers up the following simple rules:

•If you receive a letter from the firm asking youto sign a form indicating you approve of the activityand level of risk in the account, consider it a large redflag indicating that you may have a big problem. Donot sign the letter and contact a professional withexperience in securities fraud.

•Brokerage firms are not allowed to promise youperks such as IPO shares to induce you to investmore money or become a preferred customer. If thisoffer is made to you, there may be trouble ahead.

•Unless you are an experienced day trader, whena broker says something like you need to move nowon a stock or you'll miss the boat, you are hearing ahard sell that has no connection to the averageinvestors'investment style. Avoid these brokers, asthey may not have your best interests in mind.

•Once you agree to make a trade (unless youare following your account online), ask the firm tocall you back with the price immediately upon execution.A legitimate firm will not have a problemwith this request.

•Take notes of all phone calls with your broker.Make sure to record the time and date of each calland any important details.

•Read carefully all documents presented to youfor signature. Very often these documents containimportant risk disclosure information concerningyour investments.

•Read monthly statements carefully. If you don'tunderstand them, have a trusted financial advisorreview them until you do understand.

•Save all buy and sell confirmations and keep aneye on the trades being made on your account. Is thevolume of trades more than you expected? Are theredifferent kinds of financial transactions than whatyou had told the broker you wanted? If it doesn't feelright, don't hesitate to investigate.

•If you think that a brokerage firm or a brokerhas harmed you, gather all trade confirmations andaccount statements concerning the account in questionand contact an attorney who specializes ininvestor arbitrations.

•Visit the National Association of SecuritiesDealers Web site ( to check on thebroker or brokerage firm. You will be able to checkon your broker's history, including past complaintsor disciplinary proceedings.

•If you are unhappy with your commissionrate, transfer your securities to another firm or adiscount firm that will not charge a large commission.Start this process by faxing the brokeragehouse a letter clearly instructing them to stop tradingon your account and immediately transferfunds to the new accounts.

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