Investors

Risks to avoid

If it looks too good to be true, it probably is!

We’ve all heard this saying, and this is a common rule in the world of investments.

Not only this, these days fake investment schemes and scams are becoming all too common and can often look like the real deal. This is why it’s so incredibly important to be careful, to do your research and to obtain advice from only your most trusted advisers.

Let's take a look at some of the classic scam warning signs

Unrealistic Returns

As much as we’d all like to get rich fast, in most cases, it is something that happens slowly and steadily and the higher the return, the greater risk of losing some or even all, of your investment.

So, if you are promised extremely high returns and fast, you may want to be aware.

Generous Tax Breaks

Paying tax isn’t fun, particularly on investments, but it’s something we all have to do.

Therefore, any investment opportunities which have a focus surrounding tax savings, should be questioned carefully.

Under Pressure

If claims such as limited time only or exclusive offer are leaving you feeling pressured to invest, chances are that you should run for the hills.

In the majority of cases, high quality investments don’t require high pressure sales tactics to entice potential investors.

Cold Contact

Receiving calls or emails out of the blue from companies or people you’ve never heard of about an investment?

You most definitely should handle all of these types of calls and emails with a high level of scepticism and ensure you don’t give out any of your personal or financial information.

The Truth about Investments

When it comes to investments, there is fact and there is fiction and whether you’re a long-time investor, or a first-timer, there are some truths about investments, which you should always keep in mind.

The sooner the better

Despite what some may think, it's never too early to start investing. It makes sense if you think about it, because the sooner you start, the more time you have increase your chances of higher returns.

Have an end goal in mind

Even at the very beginning, it's important to set a goal. How much will you need at retirement? How much will you need for your dream home? Think about your retirement or lifestyle goals and how long you will be an investor for, and then set your personal strategy towards achieving them.

No risk - No reward

Like most things, you generally don't see a reward when there aren't any risks involved. The same applies to investments. Growth assets such as shares carry a much higher risk than some other investments, but they have the potential to deliver much higher returns in the long term.

Diversity

You've heard the saying, Don't put all your eggs in one basket - This applies to investing too. If you invest in a range of asset classes, your overall risk is likely to be lower than when it's only invested in one.

Time

If you're feeling stressed and worried about the fluctuating market, remember to stay calm. Over time, fluctuations often smooth out, thus delivering more consistent and long-term results.