Forrest’s Wealthwise offered 42% a year gains?
I see in the Tribune this morning that disgraced investment advisor Jeff Forrest has been charged with fraud by the Securities and Exchange Commission. Locals here know the story, some too intimately, but there is something that really stood out in the article I had not seen before. It’s this:
Forrest told WealthWise clients that APEX would protect their principal while at the same time generate for them monthly interest of 3 percent — a total of 36 percent in annual interest — through a purportedly innovative options-trading method.
I should first note that the author of the article is wrong on the annualized interest. It’s not 36%, but over 42%, due to compounding interest.
But the point is that anyone who expects to earn 42% a year on an investment is an absolute fool. Anything over a CD rate, more or less, comes with risk. In fact, just getting returns up to the upper single digits if full of risk.
Yes, Mr. Forrest needs to be harshly punished for his offenses. But his former clients need to read a good, basic book on investing, specifically the chapter on risk/reward.