What is a high -yield investment program?

"High -yield investment program" is a term that can be used as promotional phrases as criticism. From a promotion point of view, it can easily refer to an investment strategy that prefers high risks in the hope of reaching high yields. More often, however, a "high -yield investment program" is a negative way to describe investment schemes that are best designed and unsustainable and in the worst case fraudulent. This type of investment always brings a higher risk. Such a strategy would therefore not only require a lot of money to invest, which would allow more opportunities to choose a successful investment while absorbing losses, but also willingness to accept losses if they occur.

In practice, he is an unreasonable professors, fund managers and other retailers with financial services to use the term "high -yield investment program". This is because the term is so strongly associated with fraud that it carries negative connotations itself. Those whoThe ears are trying to recover this term for use in a legitimate context, probably facing a losing battle.

Negative use of high yield investment programs includes a wide range of fraud, most of which are the Ponzi scheme variants. Such schemes say they invest customers' money and guarantee a high return. In fact, what is paid to the return on investment, but rather from the money gathered from new investors for paying existing investors - with the operators of the scheme, of course, reduce money. As with any pyramid scheme, this has inherent restrictions. At some point, the new recruits will dry out, which means that the scheme collapses astonishing investors from the pocket.

Generally, the name “High -Return Investment Program” is used for schemes that claim to provide a return that is dramatically higher than the success and successful ProEnspects of legitimate investments. The quoted numbers are therefore figuratively and literally too good to make it true. Not all Ponzi or Pyramid schemes are classified as high -yield investment programs, because some offer revenues that are at least credible, although the estimated return level of return is false.