It’s been a lot better since they put that new regulation that telemarketers could not call you when you enter your phone number with a “Do NOT Disturb” sign on it, but a few calls still come through.
Dinner time is still dinner time and I don’t care to be called out of the blue by some no-name broker who wants to make me rich provided I buy shares in this great new issue or some stock that is just about to "take off".
Usually they start off with do I remember he called me 6 months ago and recommended so-and-so issue that is currently in the news because it has gone up 100 or 200%. Google has been a favorite, but he has a better one. He did not make that call and if he had I am sure I would not remember it. Also the name of his firm is one I never heard of, but it sounds very legitimate and he might even say they are affiliated with Wells Fargo Bank or some other big bank. They might have their checking account with that institution, but otherwise they have no connection. Now he has another recommendation that is going to do even better than that one. Yes, and pigs can fly!
If you haven't done so yet don't let him go any further. Hang up. Oh, I know you can't because your mother taught you it is rude to hang up on people. Please, this time DON'T listen to your mother. He will try to get you into a conversation by asking simple questions that must be answered with a "Yes". Stop listening. If you can't bring yourself to hang up then put the phone down and walk away. In 10 minutes he will be gone to call another sucker.
There really are boiler rooms out there selling worthless securities and everything they do is 100% within the law and 100% immoral. How do I know this? I used to own a brokerage firm and I received monthly reports from the regulatory agencies outlining charges against these shady dealers. Fortunately, I did not have those problems as I would not allow hype to open accounts.
Before opening an account with any type of company it is necessary to do due diligence. Check them out completely. Get references from current customers. Call their regulatory agency (SEC or NASD) to see if there are complaints against the company or the salesman to whom you are speaking. Make the salesman prove in writing his story of where and when he bought.
The things being told on the phone are usually too good to be true and that is a fact. Not all brokerage firms are like this, but remember the basic rule.