I have a short and sweet rule for investing for you today. If you ever hear the words "hot" and "stock" and "tip" together in a whispered sentence. Walk away. You get bonus points if the come-on contains the word "inside".

These don't come my way as frequently as they used to. Probably because those who always seem to have these prime bits of information know I'm never in the market for hot stock tips. When they do, I always just smile, say thank you and walk away.

Never buy anything just because you heard about it from a friend or relative. And that certainly rules out buying something recommended by someone you don't even know or someone you just met. Ninety-nine percent of the time you hear any kind of hot stock come-on, you've encountered a pump-and-dump scheme.

Want to know how a pump-and-dump scheme works? Read the Penny Stocks section of my Six Things I would not Invest In article.