I sat on my porch one day and looked over at the lights and noticed they were covered in spider webs. I grumbled to myself about those dumb spiders and how I would need to clean those webs off yet again. Then I promptly forgot about it.
A few nights later I was sitting on my porch looking out at the beautiful city and noticed the normal activity of bugs swirling around the porch lights. Suddenly a light went on in my own head, as I came to two realizations. The spiders were certainly not dumb at all. Even though lights are not part of their natural habitat, they had learned that they did a great job of attracting dinner. The second thing I learned was that nature had not been so kind to the insects who, after almost 200 years have still not learned that flying into lightbulbs rarely ends well for them. This brought me to the very unscientific conclusion that spiders are much smarter than insects.
I considered, from an investor point of view, what are some of the lightbulbs out there that might attract investors and that could be used by ill-meaning financial spiders to trap their next victim? Immediately I remembered a comment a client had just made to me. “Dan, we seniors love free food.” And so it is that free food does a great job of attracting retirees. There is nothing inherently wrong with offering food as a legitimate advertising tool, but investors would be wise to be aware of the potential for spiders to be spinning webs in the vicinity of any free meal.
Clubs and other affinity organizations attract a lot of good people, and successful people, but are also known to be places where financial spiders may hang out. They act like a part of the group, appearing to have honorable intentions, while quietly spinning webs to trap unsuspecting victims. It is sad but true that many frauds are perpetrated by those who have worked themselves in to a position of trust.
The next thing that came to mind oddly was church, of all places. Many good people are attracted to church and they view themselves, and others who attend, as being honorable and trustworthy. This natural sense of trust has occasionally also attracted a few spiders. I say this carefully so as not to offend, but it is well known that ill-meaning people sometimes take advantage of the inherent trust that exists among church members.
If you read the regular fraud reports from the State Division of Securities you will find that after all these years of investor education, the financial spiders continue to attract victims to their webs. Let’s learn a lesson from real spiders and always be on the lookout for their creepy financial counterparts. There is nothing wrong with going towards the light, but anything good that attracts people can also be used by unscrupulous spiders who are just looking for their next meal.
Hi, I'm Dan. I'm a CFP® Professional.
Securities and advisory services offered through Commonwealth Financial Network®.
Member www.finra.org / www.sipc.org , a Registered Investment Advisor. Wyson Financial, 375 E Riverside Dr, St. George, UT 84790
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