Duck Walking

Sometimes, there’s no question what something is.

Global Market Update - Douglas Tengdin - Mallard
Source: Wikipedia

If it looks like a duck, walks like a duck, and quacks like a duck, then it’s probably a duck. There’s no ambiguity. Yesterday several news outlets reported that a popular foreign exchange trade site had vanished, along with over $1 billion in account balances.

Investors around the world had been assured by video testimonials and consistent returns. The site ( showed a Panama address and listed toll-free numbers in Australia, Canada, Hong Kong, the UK, and the US. They were responsive via email. But they promised low-risk returns of half a percent to one percent per day. One investor saw his money seem to grow four-fold in only 10 months—a 170% annualized return.

Of course you know where this is going. When he sought to withdraw some of these gains, he experienced delays and excuses ranging from tax-law compliance to web-site maintenance. Eventually, the site went offline and never returned, taking his account and more than a billion dollars with it, based on data posted before the site went down.

We can sympathize with people trying to earn more than the fraction of a percent that bank deposits pay today, but there’s no free lunch. Absurd returns that would eat the world in a few years can’t continue. This applies to scams like this and Madoff as well as the internet and housing bubbles and even some legitimate hedge funds. Past performance isn’t just not a predictor of future results—it can actually indicate the opposite is coming.

The best defense against these kinds of scams is a little common sense: if it looks too good to be true, it probably is.

Douglas R. Tengdin, CFA
Chief Investment Officer
Phone: 603-224-1350
Leave a comment if you have any questions—I read them all!

Follow me on Twitter @GlobalMarketUpd •
By |2017-07-17T12:23:13+00:00November 14th, 2014|Global Market Update|0 Comments

About the Author:

Mr. Tengdin is the Chief Investment Officer at Charter Trust Company and author of “The Global Market Update”. The audio version of each post can be heard on radio stations throughout New England every weekday. Mr. Tengdin graduated from Dartmouth College, Magna Cum Laude. He received his Master of Arts from Trinity Divinity School, Magna Cum Laude and received his Chartered Financial Analyst (CFA) designation in 1992. Mr. Tengdin has been managing investment portfolios for over 30 years, working for Bank of Boston, State Street Global Advisors, Citibank – Tunisia, and Banknorth Group. Throughout his career, Mr. Tengdin has emphasized helping clients manage their financial risks in difficult environments where they can profit from investing in diverse assets in diverse settings. - Leave a comment if you have any questions—I read them all! - And Follow me on Twitter @GlobalMarketUpd

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