The following article is a guest post. If interested in submitting a guest post, please read my guest posting policy and then contact me.
Most investors are afraid of losing money on a bad investment. This fear is rational and even practical, and while every investor accepts that there is a level of risk inherent in investing, there is a difference between a good investment that went south, and a deliberately dodgy one – and it isn’t always easy to spot the latter. Financial experts like My Wealth Solutions offer a few guidelines on how to see those red flags flying. Check out their website for advice, but first – read on to learn about spotting a dodgy investment.
The Sure Thing
Fact: there is no such thing as the sure thing in investing. If an investment is presented to you with a, you can’t lose message, walk away. Maybe run – and look elsewhere.
Have All Your Questions Been Answered?
When you’re considering an investment opportunity, ask any and all devil’s advocate questions you can think of – and pay careful attention to how the promoter or seller of the investment responds. Do they answer your specific queries with specific replies? Or do they change the subject and talk about last year’s yield? If their responses to your questions about appreciation or resale value are vague, you should be hearing alarm bells. At the very least, you should be asking more questions.
The Endless Sell
If the promoter or seller of the investment keeps pitching, and pitching . . . and pitching, it may be time to question whether the investment promoter is selling anything but hype. In fact, once they stop for breath, start asking those questions and see how you go. Any investment that needs to be sold so hard may not be worth buying.
Do Your Homework
Make sure you cover the basics; look up any company information with relevant business registers and check out the major company players. Is the CEO mentioned anywhere on the internet? What for? Who is in charge of the books? What’s their reputation? Don’t be afraid to get your own experts to go over any numbers and legals. Make a few calls and check a few things out yourself. Time spent now will save you thousands later; after all, it’s your money and you have to be comfortable with where it’s going.
No Time To Think
This is a classic move by purveyors of everything from moon rocks to title deeds on land that isn’t really there. By claiming this opportunity won’t last and that they have lots of other interest, the operator endeavours to get your signature on the dotted line without giving you any time to think. Don’t fall for it; take that time to think. Take as much as you need – and contact your accountant, financial advisor, solicitor, or whoever your trusted team may be – and get their advice. If the investment really does close off or sell out (nowhere near as likely to occur as the promoter would have you to believe) then it wasn’t meant to be. There are always more ways to make money and you’ll find another one that suits you – it may just be that you dodged a (dodgy) bullet too.
Dodgy investments aren’t going anywhere. There will always be some new way for some new shark to try and part you from your hard earned. The best thing you can do is take your time and ask your questions. Due diligence and sound research never lost anyone any money.
What’s the dodgiest investment you never bought? Share your wisdom in the Comments box below.
Track All Your Accounts With Personal Capital
Personal Capital lets you see all of your accounts in one convenient place. Sign up now for free.The information provided in this article has been provided as general advice only. We have not
considered your financial circumstances, needs or objectives and you should seek the assistance of your GPS Wealth Limited (GPS) Adviser before you make any decision regarding any products mentioned in this communication. Whilst all care has been taken in the preparation of this material, no warranty is given in respect of the information provided and accordingly neither GPS nor its related entities, employees or agents shall be liable on any ground whatsoever with respect to decisions or actions taken as a result of you acting upon such information.
Leave a Reply