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MONEY MATTERS

Six common investment frauds

These are six of the most common investment frauds and how you could fall prey to them:

Microcap fraud. Put your money in stock of tiny new companies, based on hot tips from callers in high-pressure "boiler rooms."

Prime bank fraud. Invest in a "prime bank" that allegedly makes huge profits overseas.

Promissory note fraud. Make a loan in exchange for an IOU from a fraudulent company or from people who fraudulently claim to represent a legitimate company.

Affinity fraud. Unwittingly buy into a pyramid scheme by following investment advice from someone in a social or religious group you belong to, without checking its merits for yourself.

Spam fraud. Fall for unsolicited e-mails that promise quick profits if you act immediately on a "risk-free" and "guaranteed" investment.

Telemarketing fraud. Invest in a scheme proposed in a cold call from a telemarketer -- and give that unknown person the numbers of your credit card and bank account. (A National Consumers League survey found that 92 percent of adults said they had received fraudulent investment calls.)

For more information visit the U.S. Securities and Exchange Commission's Web site at www.sec.gov. For SEC pamphlets about fraud, call (800) SEC-0330.

Knight Ridder/Tribune

Renew magazines carefully

When you get magazine renewal notices in the mail, read them closely, because some are scams.

Fake subscription renewal outfits take the money and run.

Renewals are almost always handled by the magazine, not by an agent. Many magazines, however, do use agents, like school groups or Publisher's Clearing House, to start new subscriptions.

Many magazines are warning against two companies: Publishers Services Exchange out of Medford, Ore., and United Publishers Network out of Brentwood, Mo.

Knight Ridder/Tribune

Netfolio calls it quits

Netfolio, which offers do-it-yourself stock portfolios designed to compete with mutual funds, has shut down because funding has evaporated.

The New York-based company, which had used the slogan "Goodbye Mutual Funds, Hello Netfolio," discontinued its service Friday, six months after it was launched.

Netfolio was a high-profile purveyor of a new investment product called the folio, which essentially allow investors to assemble a basket of stocks that acts like a mutual fund portfolio.

Netfolio charged $200 a year for its basic service. It helped individuals choose from more than 200 portfolios based on investment goals and risk tolerance, and offered guidance on managing them for tax-efficiency.

Los Angeles Times

High savings, higher hopes

American parents are being aggressive -- but unrealistic -- about saving for their children's college educations, a new survey finds.

Two thirds have opened accounts for their kids -- and half of those started before the child turned two. The average amount socked away per year: $2,500.

But parents are being very conservative in approach. Some 54 percent are using savings accounts; 46 percent, mutual funds; 38 percent, savings bonds; 26 percent, individual stocks; 26 percent, CDs, and 21 percent, money market accounts. (The total far exceeds 100 percent because many parents use more than one savings vehicle.)

Somehow, they're expecting an annual average return of 24 percent on that mix.

The survey of 510 parents was taken in April and May for Ageon Institutional Markets of Louisville, Ky., and has a margin of error of 4.3 percent.

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