The difference between marketing publications and investment advice:
Unsolicited investment newsletters are commonly sent out by fax and e-mail by firms that are paid to promote investments. Before you act on the material, consider that it may not give you a balanced picture.
Headings such as "Hot Tip" and "Special Alert" will attract your attention to information that seems authoritative and professional, but may not provide the whole story.
Statements like "the potential to make our readers wealthier than they ever imagined"- potential is not a guarantee.
Claims that other smart investors are already following this advice in the hopes that you will follow the crowd.
What you should watch out for:
Fine print that contradicts what's promised in the newsletter: Look for statements like "The reader assumes all risk as to the accuracy and the use of this document."
Free stock research that you didn't ask for. Chances are that someone who doesn't know anything about you or your investment objectives doesn't have your best interests in mind.
Promotions for companies that are not listed on a stock exchange:
These companies may be subject to less regulation and have fewer disclosure requirements – which mean higher risk.
References to current events like commodity shortages and global terrorism to create a sense of urgency:
These are high-pressure sales tactics.