For the average investor faced with the bewildering array of choices of investment programs, it can be difficult to distinguish legitimate investments from scams. While it’s impossible to say that every HYIP is actually a fraud, the Securities and Exchange Commission warns consumers that many of the promises made by hyip programs are often warning signs of scams.
Some investors choose to knowingly invest in Ponzi schemes. They hope to invest early and then cash out of the scheme with a tidy profit before it collapses. Like other high-risk strategies, this method relies on timing. Some of these investors use “tracker” sites to time their exit from these investments before they collapse, but there’s good evidence that these sites are often inaccurate or are run by the scammers themselves.
At the end of the day, even a perfectly legitimate hyip program that is not a Ponzi scheme will still carry significant risks. The best choice for investors is to be on the lookout for the warning signs of scams and to always seriously assess the risks of any investment.