On Your Side Alert: Warning about dinar investments
RICHMOND, VA (WWBT) -
If you're looking to invest, experts say be warned about the hype surrounding the Iraqi dinar. Viewers emailed our newsroom after being approached with promises of an easy investment with big returns and low risks.
If you have money to invest, be warned everything that glitters is not gold. Prof. Cory
Bunting with VCU's Capital Marketing Center says hype surrounding Iraqi dinar investments may not live up to expectations. "If I had a thousand dollars to buy a dinar or a thousand dollars to buy lottery tickets, I would probably buy the lottery tickets. I think the payoff might may be better," he says.
While buying foreign currency is a common investment tool, watch out for the implied return on your money. Many people are promised that the dinar, which trades at about 1,000 to one U.S. dollar -- will regain its former value of three U.S. dollars per dinar. With about 35-40 trillion dinars in circulation, Bunting says the math doesn't add up. "That would mean the value of those dinars would be worth $100 trillion. That's enough money to buy every share of stock on every stock exchange in the entire world," Bunting said.
Sterling Currency Group in Atlanta is a reputable currency dealer and labels itself as the number one source for buying and selling the dinar. According to the company, most customers buy the currency speculating that the value will increase. But CEO Frank Bell warns any would-be investors about believing everything they hear. "Do thorough research. Don't count on the word of their neighbor, don't count on the word of a friend. They go and do the research and arm themselves with the facts and then from that make a decision," he said.
Sterling says if you run across currency dealers offering you investment advice, steer clear; that practice is illegal. Also, before you buy, make sure the company is registered with U.S. Department of the Treasury. It's your money, but if you buy the dinar with the hopes of becoming an overnight millionaire, experts say it's not likely. Some red flags to look out for: Promises of large profit but little information, promises of no financial risks and unsolicited offers.
"Some people spend a thousand dollars and they say, what the heck, if I lose it, I lose a thousand dollars. Others have actually mortgage their houses, drawn down on their IRAs and retirement plan to invest in these dinars, with the expectation that they are going to be super rich," Bunting said. Financial experts say no matter the investment, it's a good idea to speak with an independent financial advisor. http://www.nbc12.com/story/26092391/on-your-side-alert-warning-about-dinar-investments