4 bad investments to avoid at all costs

Fsp Invest, 05 Nov. 2013

Tags: investing, bad investments, how to get started investing checklist, investing checklist, where not to invest,

When it comes to finding a place to invest your hard-earned cash, there are huge varieties of things you can do with it. This includes investing in shares. But there are definitely places that you shouldn’t risk putting your money. Read on to discover four bad investments you should avoid at all costs…

You no doubt have heard the phrase, “if it seems too good to be true, it generally is,” Dr Steve Sjuggerud in Investment U explains.

It can be easy to find yourself lured with the promise of fantastic returns. But you should make sure that you avoid the following investments…

Bad investment #1: Private placements
In general, these are incredibly risky. If you’re throwing R50,000 into a telecom start-up, you should be prepared to just mentally write that money off.

If it happens to turn into millions, be thankful. But don’t buy that yacht just yet…

Bad investment #2: Thinly traded shares
These are generally bad investments. The share price may go up as you’re buying, but you’ll never get out when it’s falling.

If you do invest, you should again mentally write off that investment. If it turns into a big winner, be thankful.

Bad investment #3: Secretive investments
There have been tons of frauds here – offshore prime bank debentures, promissory notes, offshore investing club programmes – all promising things like 10% a month or more. Folks, it’s just not possible.

All their secretive stuff, saying that “this is what the big banks really do with their money” is rubbish. R10,000 compounded at 10% a month for 10 years would turn into a billion rand. Even Warren Buffett can’t touch that.

Bad investment #4: Wiring money offshore
Generally, these secretive investments require you to wire money to strange lands. But think about it, who do you go after when your money disappears?

If you know the people you are doing business with are reputable and have been doing business for a long time, you’re probably fine. But make sure you do your homework before you commit.

To keep yourself on the right investing track, make sure you follow this list…

How to get started investing ‘common sense’ checklist
  1. Is the source of this recommendation trustworthy? (Do I know this for sure?)
  2. Have I taken the necessary steps (such as trailing stop losses, etc.) to prevent a major loss in this investment?
  3. Is this share widely traded enough that I will be able to sell when I need to?
  4. Have I verified the claims made about this share’s performance? (Do NOT rely on what a broker’s research department tells you!)
  5. Am I sending my money offshore to people I do not know to be reputable?
  6. Have I done enough of my own research to know all I need to about this company?
So there you have it, four bad investments you should avoid at all costs.

Related QA

kavesh.maharaj.73 asked:
Hi Josh Quantum wants to buy back shares from shall investors at what I think is a low price of around R3.86. You tipped the share in February [read more]
Published at 14 Mar. 2018 in: Investing Real wealth 5 answers
elizastrydom asked:
Hi Timon I am interested in registering for your Red Hot Storm Trader service. I am already a Red Hot Penny Shares investor. My question is [read more]
Published at 28 Feb. 2018 in: Investing Trading platform and broker 1 Answer
ManuE asked:
I have an interest in investing in Bitcoin, I just don't know how. If I buy Bitcoin with R15 000, how much can make (Return On Investment)? [read more]
Published at 25 Feb. 2018 in: Investing Investment 1 Answer
rickey101ter asked:
Good day gentlemen I am a subscriber of various of your products e.g. the above mentioned two and TWS, but I am not happy with the services I [read more]
Published at 07 Feb. 2018 in: Investing Investing 2 answers
bongani.zwane.127 asked:
Hi Francois, I want to invest in ETF for my kids educational funds. I would like to find out which ETF securities can I invest into for a period [read more]
Published at 01 Feb. 2018 in: Investing 1 Answer

Related articles:




Youtube Twitter Facebook

Connect with us:    

  • Accelerated Investor
  • Accessories
  • Accountancy