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Due Diligence:

: Doing your homework.

For bankers, it means carefully investigating a loan request.  In the securities market it means the responsibility securities underwriters have to disclose and explain all the relevant issues regarding a new offering.  

For investors it means gathering as much information as possible about an offering before making a purchase.  It is important to understand that all investment purchases are in reality loans to the issuing party.  Whether the investment is into a fund, stock, or the mortgage market, the interest (capital gains) received is the fee paid to the investor for the use of his money.

For anyone thinking about handing money over to someone, especially a complete stranger, it means investigating every reliable source of information  possible before doing so, and it is the wise investor who hires a specialist to do the investigating.  

Remember This: Whenever you hand your hard-earned money over to a complete stranger, you are placing the future of your family, your children, your spouse, your job, your company, and yourself at risk!

: Financial fraudsters use the term 'due diligence' only as it applies to the fellow with the money - how much do they have to invest, are they good for it, is the money readily available, etc. 

They do not mean due diligence on what they are offering - that is forbidden, secret, and wrapped in processes that are simply not feasible in the financial industry.

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