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Its very obvious that when JF was not released for the public yet, Arnaud(the owner) generated some very nice returns with a +71% profit peek in february 2006. Then he decided to open his program to the public around april of that same year.
At first profits were very decent but after a month or 2 they started to drop very quickly, as soon as the first serious investors gave Arnaud their hard earned $$$. Add the very expensive withdrawal fees to it, and we have an investment site that gives us no profits at all.
What followed was a serie of some very disappointing months. A profit in one month was completely cancelled by a loss in another month and at the start of 2007 a lot of investors finally got sick of the bad returns and tried to pull out of the game.
It was at that time that Arnaud quickly decided to post a -40% loss. He then also changed the TOS so that open positions on the commodities market that were at a loss would be passed on to those that withdrew money from the system. Due to this, people who withdrew even BEFORE the -40% loss was announced, will now probably recieve less than 25% back of their initial investment and a possible -75% loss or more will be passed on to them!!
Its now 2 months further and people who withdrew still didnt see a dime of their money. Imw Arnaud posted a 10% profit and another -29% loss. I wouldnt be surprized that those that are waiting for their withdrawals for 2 long months, will only see back a penny on the dollar. That is IF Arnaud pays at all. Because even that is uncertain at this point.
For those that enjoyed JF in the past, they should really consider changing its name into JokeFund. Another drama in Hyip Land. Another lesson learned.
Popularity: 3% [?]
Was invested in them via FF. Pulled out of JF inside FF, but it was to no avail…
Teehee, double joke on me.
The biggest positive that you can take away from this is the experience. That’s about it. Once bitten twice shy!
I’m curious Makila,
What lesson do you feel you have learned from this?
In my opinion JoyFund was a legitimate trading program run by a person with a very risky trading model.
It should be no surprise that he might blow out the trading account. Some one earning the type of returns he was earning had to be using high risk strategies. You can’t earn those type or returns any other way.
As far as changing rules “mid stream”, Unfortunately, a lot of these programs, although put together with the best of intentions, are put together by traders or people who really have not experience running a pooled investment program.
In my opinion, a trader should not be managing a program by himself unless he has an automated trading system developed.
Also traders generally don’t understand the money management of running an investment program for the hyip community.
The logistics of managing cash flow is a nightmare. I am dealing with it right now with my own program.
hyipers tend to want unlimited access to their funds at all times. This complicates things very much when you are doing real trading. At the very least it decreases the returns possible.
A program manager now has to keep a certain amount of money in their account to cover withdrawals. This money is no earning interest.
In the real world investors are much more forgiving and not nearly as demanding in regards to performance.
Program managers don’t have to worry about cash flow as much as there are not nearly the volume of funds moving in and out of the program.
I feel this high volume of funds moving in and out of accounts was the major down fall of FXIG. If you are trader you understand how difficult it is to manage cash flow when a person can take their money at any time.
JMHO
Paul
I’m sorry for those who lost money in JoyFund. It’s to bad it didn’t perform better.
Paul
No, these programs were scams. Because they are hiding behind the anonymity of the internet. Don’t be fooled to believe they only fall.
Hi Kat,
Joyfund wasn’t anonymous. There were a number of people who verified the owner ’s identity as well seeing proof of trading.
People throw the word “scam” around quite a bit.
In my opinion a “scammer” is a program owner who’s primary intention was to defraud the investors.
I suspect at least half the failed programs out there were due to program managers who did not know what they were doing.
Best wishes
Paul
Anyone can trade or proof they are trading. But trading well is a whole different story. Verifying the owners identity is useless as well. If the owner truly trades but is incompetent and looses all your money, you cannot go to court to claim it back. You lost it *legally* that is… IF you are lucky. If you are unlucky you simply lost money illegally.
Hi Makila,
That’s my point exactly.
The key is to understand what you are investing in and learn to evaluate the risk.
ALL INVESTMENTS CARRY SOME SORT OF RISK.
Getting a person’s or company’s ID is a good first step but only gets rid of the obvious scammers.
Once you know you are dealing with a legitimate company, you then have to discern if they have a workable business model.
This is where the majority of internet investors “fall down” They don’t know how to determine if a trader is good or not.
There is no sure fire way of picking only good traders, but an experience person can get a pretty good idea about how well the trader will do long term.
Best wishes
Paul
Paul,
I agree with your pitch. The only problem I see is regulation. It seems even if you are an honest Joe you’ll fall foul of the powers that be who want to control the purse strings.
It just won’t do for average Joe to make a quick buck without having to grind away unlike the powers that be that leverage away with what is mostly inside info.
Hi Bill,
It defiantly is more difficult to set up a legitimate program than it is to set up a scam.
Legitimate programs tend to be unattractive because of the lower more realistic returns and the the added paperwork that goes with participating in a legitimate project.
Add on top of that the general “lotto” mindset of the hyip community and it is easy to see why legitimate programs die out while scams flourish.
Best wishes
Paul
Indeed Paul,
In the threads of legit programs I very often see stuff like :
No return, weak return, a loss?(*mentality of hyipers: how dare they post a loss!!!)–> Conclusion : its not worth it to give this site a single cent. I can earn much more elsewhere and much safer.
If you invest in the right scams, you can earn 1% daily easily for the next 200 days. People prefer being paid 200% in 200 days and move on to the next scheme than to invest in a honest opportunity that gives them the same 200% return in mmm 2 years time? And really, how many honest opportunities DO not fail and indeed run for 2 years or longer??? Not many right?
Paul,
I can see the rational here. It’s the market saying well this is largely a lotto full of dishonesty so lets play the game and if we’re in early we win. A bit like a bubble mentality in markets. The clue becomes timing. You can’t beat the market so go with the flow.
Even so an honest program still fulls foul of financial market regulation be it the SEC, FSA, SC, blah, blah, blah. Without license you can’t even trade forex (or something else) for Average Joe and distribute the profits in a HYIP.
Hi Mikila,
There are those programs that run long term. Usually they tend to drop out of sight and run as a private club.
Personally, I have a lot of hope for the future in internet investing. More and more competent traders are coming online looking to raise money. Many of them are willing to give investors the information they need to make good investment decisions.
On the other hand …
I haven’t done any official polls or anything but I would suspect that 70% or more of the participants in this industry have been involved for less than a year. All of them buy into the hype fed to them by program owners and list owners telling them they will get rich if they only find that one “special” program. In the meantime promoter continue to make referral fees and advertisers continue to earn ad dollars.
Consequently, the “term “a sucker born every minute” is very true in hyip land. Most people lose their money and leave the arena, but there are always more coming in.
At this point there is no reason for the industry as a whole to change. Luckily, there is a small but growing subsection which allows the serious players the opportunity to earn a better than average return.
Best wishes
Paul
Hi Bill,
Actually you can trade the Forex market without a license. Forex in general is not regulated. But, a person is limited when it comes to trading for others.
You have to have a license to be a money manager. Some people have opened up an investment club but there are rules and regs that govern them as well.
I suspect this year you will see a proliferation of managed forex accounts. Technology is allowing descent traders to trade under a LPOA with little more effort then if they were trading just their own account.
They opportunities will be legitimate, but not all will be profitable. A person will still need to be able to figure out if a trader is good or not. There will also be plenty of traders that will lie about their records in order to get more money under managment.
Best wishes
Paul