E-mail this page Print this page Most E-mailed/Most printed    Type size

Clark Howard's Tips

Blank check investing all the rage despite dangers

April 22, 2008

Blind risk pools (also known as blank check investing) are the newest thing going in investing. Clark wants you to be diligent in avoiding these options.

How will you know if you're being pitched? You may get a circular touting a new investment brain trust comprised of some of the top minds in finance. The talent is impressive, but there's no disclosure as to what your money will be invested in! That's because it hasn't been determined yet.

CLARK'S TIP TOPICS Consumer Tips Managing Money Banks & Credit Cards Technology Health & Healthcare Car Costs Homes Phones & Utilities Small Business Travel & Leisure Find more consumer advice in Clark Howard's book, "Get Clark Smart"

People are pouring billions of dollars into this stuff right now. But blind risk pools violate the first rule of investing: Understand the investment. Clark jokes that he'd rather you go to Vegas, take in a few shows, enjoy the Strip and then put on a blindfold and plunk your money down on the roulette wheel. You might get just about the same yield.

So be smart about this. Your country club buddies or colleagues at the chamber of commerce may be getting into blank check investing. But you don't have to fall for it.

More Clark Howard Money Management Tips Beware of impostor money market fund investments  Clark's 529 Plan Guide has been updated!  Investigate charities thoroughly before giving them money  Mandatory private accounts may solve SS dilemma  Free budgeting tools online!  Avoid the full-commission stock broker trap  Avoid the full-commission stock broker trap  Scams heat up when economy cools down  The dangers of purchasing employer stock  Free budgeting tools online!  Full list

Return to Top