Recommendations of Van Eck International Investors Gold Fund (Van Eck Fund) by broker-dealers and investment advisors may be unsuitable, depending on the individual characteristics of investors and whether the broker had a reasonable basis for the recommendation.
The Van Eck Fund is a type of mutual fund, meaning the portfolio is funded by investors; the holdings are diversified and are professionally managed. The risks faced by this type of investment are tied to the securities in the investment portfolio. The Van Eck Fund invests in common stocks of gold-mining companies. According to the Van Eck Fund website “[The] Fund seeks long term capital appreciation…income is a secondary consideration.” The fund has returned -34.45% over the past year, -32.38% over the past three years and -21.83% over the past five years.
When a broker recommends that a client purchase or sell a security, the broker must have a reasonable basis for believing that the recommendation is suitable for the investor. In making this assessment, a broker must consider the investors income and net worth, investment objectives, risk tolerance, and other security holdings.
Furthermore, a recommendation may be unsuitable if it results in an inappropriate over-concentration of risk in a single security or sector relative to the investor’s overall portfolio. If a broker or advisor made a recommendation resulting in a loss of a substantial portion of an investor’s portfolio, the investor may wish to investigate whether the recommendation had a reasonable basis at the time it was made.
If you believe you have been the victim of stockbroker misconduct, you may wish to consult an attorney to find out more about your legal rights and options. Investors may contact a securities arbitration attorney at Law Office of Christopher J. Gray, P.C. at (866) 966-9598 or newcases@investorlawyers.net for a no-cost, confidential consultation.