People who are successful stock traders are no strangers to the educated guess. They analyze the risk associated with a companys stock and then make a decision. When they are correct in their decision they earn a gain. If they are incorrect in their decision they will lose money. Investors that continue to lose money will sell their stock to recap their investment. This ultimately means they stop investing in that company and move on to the next one that looks promising.
Believe it or not stocks are not the only way the investor can use this same strategy to make money. People who make money with HYIP (high yield investments) operate on this principle.
HYIPs are investment programs that offer high returns quickly. Like stock trading the more you invest the more gain you receive. Unlike stocks, however, HYIPs offer more of a return for a smaller investment. The reason why HYIPs can do this is because some of the money is funded from new membership.
There are two types of HYIPs that are popular online: those that require a person to do nothing but simply invest and those that require a person to view advertisements. The latter has gained more popularity through a concept known as the autosurf. Autosurfs that are HYIP-based operate on the same principle as television does: offering members something free for viewing advertisements. In this case the freebie is money. If the autosurf is not HYIP-based, it will offer advertising credits for its members. The more credits a member receives, the more they can advertise their sites.
How can you distinguish between a legitimate HYIP from the typical HYIP which is a scam?
Below are some factors which are common to the legitimate HYIP.
1) Legitimate HYIP sites will generate revenue from a variety of sources
Member signups alone are not enough to keep a legitimate HYIP running. This is because when new members stop signing up (which is inevitable even for established membership-based businesses), the HYIPs revenue source is gone. So if an HYIP is legitimate it must sell a service or product or invest in stable trades FOR REAL.
2) Legitimate HYIP business owners can be contacted
HYIP business owners who are serious about their business will treat it as such. This means they will establish a company just like any other entrepreneur and reveal their contact information. If an HYIP webmaster can give no verifiable information about their company including telephone numbers, they are scams.
3) Legitimate HYIPs receive positive feedback
HYIP monitors are sites which evaluate HYIPs. If they pay then they receive a positive rating. If not, they receive a negative rating. Legitimate HYIPs tend to get mostly positive rating through HYIP monitors.
Legitimate HYIPs also receive positive feedback on virtually any place on the web, even those not related to investing. 12 Daily Pro, for example, has received thousands and thousands of testimonials from people on a variety of websites and message boards.
Once investors find HYIPs that are legitimate, they try to recover their initial investment as quickly as possible. After this, they invest using their profits so the risk of losing is minimized. If something does happen to the HYIP it doesnt matter as much because they were playing around with just their profit anyway.
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