Background
Several years ago, my financial advisor called me with an investment idea that had the opportunity for "huge" profits in the natural gas arena. Shortly after our conversation, he sent me information on a group called Ridgewood Energy based out of Ridgewood, NJ.
The pitch was simple. Natural gas prices were sky rocketing due to a number of issues and this company Ridgewood had significant opportunities for exploration in the Gulf of Mexico. The company had created a series of funds they call the alphabet funds. Named the alphabet funds because they started with the B fund and by the time they had contacted me they were on the L fund.
My financial advisor who for many years was a very stable and steady as she goes advisor was somehow hot to trot on these Ridgewood Funds. I would later come to learn why he was so excited. With a 7.5% commission on each unit of $150,000, that works out to be a heck of a lot better than pushing index mutual funds that probably pay a fraction of one percent on each dollar invested.
If you are considering an investment in Ridgewood Energy funds, please give thoughtful consideration and perhaps push back on your advisor to ask the questions that perhaps I should have asked some two and a half years ago.
My next entry will outline some of the questions you should ask your advisor and some of the issues you should consider before investing in this "scheme."
Subscribe to:
Post Comments (Atom)
6 comments:
Hey There Weary Investor,
I got into this crazy stuff called Ridgewood as well. My advisor said they were showing huge returns and talked about the early funds. Needless to say I would have had more money if I just buried it in mason jars in the backyard.
At some point I am waiting for the letter from Swanson or my broker telling me that Swanson and company have all moved to Bermuda with out money. Everytime I get a letter from Ridgewood Energy it makes me ill.
Oh help us all. Let's all meet and drink our sorrows away. We should have plenty of time.
Does anyone know if these guys have been checked out by the SEC. The big promises they make would sure seem like a stretch!
Yes, after many difficult years earning it, after one big payday, like some drunken sailor, I handed over $150k for a share of the "U" fund. Is there any regulatory body that looks at these things? Do we have any clue if Ridgewood is even legit?
Hey Weary investor,
My husband invested $350,000 of his 401k in Ridgewood back in the mid 1990s. My husband is now dead and I was told by Ridgewood recently that all distributions over the last 20 plus years returned approx. 80% of the principle. How is that for a sound investment!
I am amazed there has not been an uproar over this.
No wonder bob wrote the book on tax shelters
Post a Comment