One of my goals for the future of HYIPBlogger is to have high reader-participation. I hope as we grow, readers will guest post their own walkthrough articles and reviews, giving multiple points-of-view while increasing the knowledge available to everyone visiting. This walkthrough article is being written at the request of a reader (well, he didn’t explicitly request the article, but I believe this is the best way to answer his question). MyInvestBook.com is a new Facebook-esque site where investors can share knowledge on HYIP programs. A member on this site, GC asked me the following question:

“What are your methods of testing a HYIP for diligence, stability and legitimacy?”

It’s my goal to be as transparent with HYIPBlogger.com as possible, so I have no problem going through an example of how I test a HYIP to determine if I feel it is worth reviewing and listing on HYIPBlogger.com. Since most of the reviews you will see here are positive ones (because most of the reviews I write will be on programs I feel could be potentially good investments), my examples in this article will be on a program that I would NOT recommend.

1.) Investigate the program’s website.

The first step in researching an investment program should be to take a close look at their website. Is there anything that seems out of place? Does the site say something on one page, then list something different on another page? Small discrepancies, poor grammar and spelling mistakes are all things that should be looked for in this investigation.

We’re going to be taking a look at Proxima Investment Club today. Going through the website there are many positive aspects. Proxima has a page with Investor Testimonials listed along with a Investor Payout page, showing they have been paying investors since April 22nd of 2010. Going through the website, the program looks to be pretty good. The site, while not extremely impressive, looks professional. The content is unique if not a bit generic and for the most part everything looks good.

Now, there are a few small things that peak my curiosity. First, Proxima accepts PayPal as a payment processor. Historically, PayPal isn’t used by HYIP programs due to the ability for payments to be reversed. This isn’t necessarily a red-flag, but something interesting I noted. Also, the site offers a 20% referral bonus, this is extremely high as historically the highest is a 10% bonus, with most referral bonuses being around 4% or 5%.

The first red flag I found can be seen on the main page on their investment plan listing. The text for the Basic Plan lists 200% + principal back after a term of 10 days, yet on the side of the image 200% after 72h is listed:

This is a pretty big red-flag, however for the sake of this article we’re going to continue and fully research Proxima. If we were interested in investing in this program, we’d definitely have to contact the program admin to verify the correct information before investing.

2.) Perform a Whois Search

Next, I always check out the website’s Whois information. This search usually doesn’t give us much information, but it’s worth taking a look to see what is available. The Whois lists getpaidsolutions.com as their domain host and their domain is listed as expiring 04/15/2011. Not a lot of information but we’ll take a closer look at their hosting after we:

3.) Perform an IP Search

The next thing I do when researching a company is I ping the website and receive their IP number, in this case 174.132.219.90. Using the IP2Location™ tool, I found the following information:

Now, I went ahead and checked out Theplanet.com Internet Services as well as getpaidsolutions.com which we found from the Whois search. I am not familiar with either company, and have not seen them used by many other HYIP programs in the industry. This alone is not a red-flag, but since neither company claims they give DDoS protection on their websites, it’s important to do a bit of further investigation. After contacting The Planet, they confirmed to me that they do indeed provide DDoS protection for the sites they host.

Since we’re looking at the security of Proxima, we should mention they have listed in the Features overview on the main page: “SSL Encrypted Website.” Unfortunately there is no https:// url and no SSL certificate. This is a HUGE red-flag as the website is claiming they have security features they do not possess.

4.) Perform a Traffic Analysis

The next bit of research I do on a potential program is a Traffic Analysis. This is one of the more subjective parts of my research, as it is may be possible to manipulate the information displayed on an Alexa Graph, and Alexa only looks at a part of website traffic. Despite its shortcomings, the Alexa Graph is a useful tool to watch trends and determine site traffic. Also if site information is available on Compete.com I will use their traffic analysis charts to determine and look at traffic trends.

The site lists investor payouts on their main page. The investor payouts date back to April, which matches around when the Alexa information starts. The biggest problem with Proxima is there is no growth in their Alexa Graph.

With the low traffic and no growth over the past few months, it is impossible for Proxima to  sustain 200% and 500% returns. I can only come to the conclusion that they are not paying investors.

5.) Do a Forum Popularity Analysis

Another research tool I have begun to utilize is what I call a Forum Popularity Analysis. At this time I will say that Proxima only has a thread on one of the four (4) major HYIP Forums. The thread only has a couple of posts, and several of them are negative. This is an obviously poor result.

As you can see, before I recommend a program I take an extensive look at it to determine if I feel it is a potential investment opportunity. This example, Proxima Investment Club, is NOT a program that would be recommended by HYIPBlogger.com, and is in our opinion a blatant scam.

The original question I was asked,

“What are your methods of testing a HYIP for diligence, stability and legitimacy?”

specifically asked about diligence, stability and legitimacy. The entire research is being diligent, determining the security, and truth behind the program. Stability is specifically addressed using the Alexa Graph Analysis along with the Forum Popularity Analysis, both methods give us a picture of the life and stability of a program.

That leaves legitimacy. The truth is, we do what we can. We double-check all information given to us in the above research, but does that make a program legitimate? The answer is no. I ask you refer to my article: What is a HYIP?, specifically the following statement:

“it is impossible to know which investment programs are Ponzi schemes, which are scams, and which are legitimate programs.”

I attempt to give the most information possible about any programs I list on this site. I do not promote these programs or tell you that you should invest in them. All I do is provide a service, I let you know which programs I feel could potentially be profitable for investors that are interested in risking their money for high reward.

I am always looking for ways to improve my research, tools to use and more knowledge on how things work. Over time my methods will probably change and I hope my research will be even more thorough. If you are interested in contributing in any way feel free to Write for HYIPBlogger. I hope this article helped you all see how I research HYIPs.