We feel that this is an important topic to bring up once in a while. Sadly, the exploitation of older people is increasing so we’d like to discuss it a bit today. Why is it important for you? Chances are you either are a senior, or have parents or grandparents who are getting on in years. You, or they, may be a target for Elder Abuse.

The National Center on Elder Abuse defines financial exploitation as the illegal or improper use of a vulnerable adult’s funds, property or assets. This abuse crosses racial, ethnic and economic lines.

Most cases of exploitation are committed by someone close to the victim and thought to be trustworthy. Often they may be a family member, a caregiver or a professional advisor of the client. Family members are the most common perpetrators, and friends and neighbors are next most common.

Here are some common examples of financial scams that target elder adults:

Lottery Scam – This is one of the most successful scams. Fraudsters call seniors and tell them that they have won a large amount of money, and all they need to do to collect their prize is to pay an upfront processing fee or tax. The caller begins in a friendly manner and over time the calls may become threatening and the collection tactics become aggressive.

The Romance Scam – Does Grandpa really have a new girlfriend? This is an internet–based scam that uses fake profiles on dating sites and in social media to target victims, establish a romantic relationship and then make requests for financial assistance to drain the resources of the victim. When successful, this scam can progress into outright blackmail.

Foreign Letter Scam – The senior receives a letter or an email which gives him the ‘opportunity’ to share in a percentage of the money that the sender is trying to get out of their country.

Grandparent Scam – A senior receives a phonee (a typo but the pun is intended) call from someone who claims to be their grandchild who is in desperate need of money and unable to approach their parents. The scammers often rely on social information found on social media to defraud the seniors and tend to strike during school breaks.

Affinity Scam – A fraudster claims to be a member of the same ethnic, religious, career or community-based group to gain the trust of the senior target.

No one is immune to these tactics. Keep your eyes open, and in the event that you observe behavior that may indicate a member of your family may be a target, speak up.

Market Minute 3/29/2019 – ‘Hot’ Stocks and IPO’s

Today is the long awaited (by some) initial public offering (IPO) of LYFT.  It’s a day when financial reporters will be camped outside of the NASDAQ stock exchange and breathlessly inform us of the price movement of the newly released public stock offering.  We’ve received remarkably FEW questions about this new IPO and its investment merits, but we thought it time to once again raise the caution flag on ANY new IPO.

Let’s take a short walk down memory lane of recent ‘hot’ IPO’s. Snap was the most recent hot IPO and what a disaster that was! The stock opened at $24 and ran straight to $30. Those that bought at $30 watched it slide over the next few months down to $12. That was followed by a short bounce to $20 and then it settled at $5.

Square became a public stock at the end of 2015. After a wild first day of trading (the stock hit its highest price on that day), it went nowhere for 5 months, followed by a bounce.

Alibaba was the largest US IPO ever (!) when it became a public company in September 2014.  People really were lined up to buy that stock out of the gate on the first day. That may have been the most media hype ever for a new IPO. (And I’d bet that most investors never heard of Alibaba until shortly before the offering.)

After a really wild first day the stock dropped back 15%.  Then two months later it soared to its all-time high. That was followed by a drop to half if its price a year after the IPO. 

In summary, we have watched again and again that the potential strength of a new IPO is rarely evident on the day it leaves the starting gate. Accordingly, getting in early has not been a generally rewarding strategy. This is not a prediction, and LYFT — and the soon to be public UBER — may open and soar to highs unimaginable. The odds, however, would suggest that most of us should ignore a new stock- at least until it’s had a chance to ‘season’. 

Ronald P. Denk, CFP®
Investment Advisor
Denk Strategic Wealth Partners
10000 N. 31st Avenue, Suite C-262
Phoenix, AZ 85051
Phone (602) 252-8700
Fax (602) 252-8701
Toll-Free (877) The-Denk
www.denkinvest.com

This weekly article reflects news, commentary, opinions, viewpoints, analyses and other information developed by Denk Strategic Wealth Partners and/or select but unaffiliated third parties. DSWP provides Market Information for illustrative and informational purposes only. If you wish to receive this weekly commentary by email please contact us at 602-252-8700 or by e-mail at lindaw[@]denkinvest.com. If you are receiving this commentary via email and would prefer not to please let us know either by email or phone.

Ronald Denk is an Advisory Representative offering services through Denk Strategic Wealth Partners, A Registered Investment Advisor. He is also a Registered Representative, offering investments through Lincoln Financial Securities Corporation, Member FINRA/SIPC.

Denk Strategic Wealth Partners is not affiliated with Lincoln Financial Securities Corporation. Information in this commentary is the sole opinion of Denk Strategic Wealth Partners. Past performance is no guarantee of future returns. All market related investments involve various types of risk, which include but are not restricted to, credit risk, interest rate risk, volatility, going concern risk, and market risk.

The Update provides information of a general nature regarding legislative or other developments. None of the information contained herein is intended as legal advice or opinions relative to specific matters, facts, situations or issues. Additional facts, information or future developments may affect the subjects addressed in this document. You should consult with an attorney, accountant or DSWP planner about your particular circumstances before acting on any of this information because it may not be applicable to your situation.

Lincoln Financial Securities and Denk Strategic Wealth Partners and their representatives do not offer tax advice. Please see your tax professional regarding your individual needs.

*The indices are representative of domestic markets and include the average performance of groups of widely held common stocks. Individuals cannot invest directly in any index and unlike investments, indices do not incur management fees, charges, or expenses, therefore specific index returns will be higher. Past performance is not indicative of future results.

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