|People often ask me what is HYIP investing and why is it so popular? HYIP investing is called High Yield Investment Program and is an investment in high yield return opportunities, whether it is the Forex market or a bigger investment program. It is so popular because you have the potential of making a very good rate of return on your capital; much better than a bank or mutual fund investment.
Although these programs can be very profitable they are also very risky: the higher the risk the higher the profit. You always need to understand that you could lose your capital at anytime. Investments bust or companies go under, anything can happen in the world of HYIP investment, including scams.
In any industry there are always people trying to usurp the system and make an easy buck. It is a little more prevalent in the HYIP arena because of the easy use of the Internet. Just be careful about whom you invest with, if it sounds too good to be true then it probably is.
Always do your due diligence on any program that you plan to invest with. It does not take long to do backgrounds on these sites, talk to others who are using them and check out HYIP monitoring sites for information. If in your gut you have a good feeling after doing all your due diligence , then you probably have a good program.
What is the best strategy to use when investing in programs ? My personal preference is to use diversity. Spread your capital around to several programs instead of just one. That way if one fails you do not lose all your capital investment. A lot of small profit when added together equals a big profit.
Do not get over anxious in your investing. Some programs rate of return will do really well and your first instinct is to put more money into the program. Do not do it. Stick with your game plan and it will all work out in the end.
Never reinvest your earnings until after you have taken out your initial capital that you first put in. That way, if the program does ever go bad then at least you were investing with profits and not your cash. Always take your initial capital out first then you can reinvest for bigger profits.
The introduction of e-currencies has made it possible for HYIPs to operate on the internet and cross international boundaries, and to accept large numbers of small investments. HYIPs usually accept deposits by either e-currency, like e-gold, e-bullion and INTGold, or use specialist third party payment processors like AlertPay, SolidTrustPay, CEPTrust, TriStarMoneyChangers and StormPay. HYIPs typically offer a significant incentive commission for members to attract and refer new investors.
A High Yield Investment Program, or HYIP, is a type of investment scheme normally offered via the Internet. HYIPs typically accept deposits as low as $1 while promising astoundingly high returns. Online HYIP schemes rarely last for the long term. Many HYIPs operate as Ponzi schemes, a Ponzi scheme is an investment operation that involves paying abnormally high returns profits to investors out of the money paid in by subsequent investors.
Most HYIPs disclose little or no detail about the underlying management, location, or other aspects of how money is to be invested, and relatively little information other than asserting that they do various types of trading on various stock and forex exchanges; Claims that investors funds can be placed in a bank account, and then used, without risk, to trade bank debentures, or other financial instruments; Claims that invested funds can be used to lease or rent U.S. Treasury Obligations and then use these same leased securities as collateral for further trading programs; Claims that trading Medium Term Notes (MTN's), Prime Bank Notes, or any other bank instruments, on a riskless basis, will yield above market average returns; Claims that Letters of Credit or Standby Letters of Credit can be traded for profits. They are sometimes presented with some form of an emotional appeal, and promises that they will help investors achieve financial freedom.
As a result of online forums and monitoring sites which have made HYIP investors more aware of their nature, a different sort of "honest" HYIP began springing up in the early months of 2006. Basically, the HYIP owner calls his or her program a "ponzi-structured game" where one should "not invest money one cannot afford to lose", and where there is "never a guarantee of earnings or refunds". They promise to pay out up to (for example) 95% of deposits, the rest going to hosting or other fees and the owner's profit.
In such "games", the first participants ("investors") may make a good profit and are encouraged to refer other people to the program because of referral commission, the fact that they have already made back their principal and are playing with profit, and that the more people who deposit money, the more money can be paid out to participants. In theory, strategies can be developed to maximize profit using these games (but, of course, since this is a zero-sum game, such strategies work by taking advantage of ignorance or errors by others). Some forum users may gain a reputation whereby others will trust their word that they have been able to withdraw their profits, encouraging others to invest in the hopes that more will invest after them and that they can therefore make a profit. As these games are by definition Ponzi schemes, it is inevitable that the vast majority of investors who are not at the top of the pyramid will lose their money.
These "games" might be considered as lotteries. However, the odds of winning cannot be determined, as one cannot know whether one is playing early enough to win money (that is, whether a sufficient number of new participants will follow). Thus, these activities are unlike a lottery or other forms of gambling, where a player has an equal chance of winning no matter when a ticket is bought, or where the odds of the game are known.