Beware of Risky Investment Products

| November 26, 2013

Photo Credits: YoTuT

Everybody wants to get ahead, and doing it financially sometimes means looking for opportunities outside of your regular paycheck. It seems like a fair deal to put some money into a product, let it develop and sell, and reap the benefits of your supposedly sound investment. But not every deal is as squeaky clean as you’d like, but might turn out to be a shady way to throw away your money.

How can you find the right deal for you that’ll earn you a vacation on the beach, and how can you spot the lemons and scams that’ll drain your checking account?  A bad investment can be easy to fall into if you don’t do your research and ignore the telltale signs, but with a little educated foresight you can better spot the money pits and find the gems. Here are some tips on how to avoid a bad investment.

Watch Out for High Costs

Whether it’s a flat out outrageous starting price, or hidden costs and fees that are added on over time, higher costs can be a strong sign that you’ve made a poor investment choice. A lot of fees and and other costs from an investment will be hidden under complex piles of details, and deals that call for a growing cash input but don’t overcome the costs are a red flag.

It’s true that you can’t make something from nothing, or as the old saying goes, “there’s no such thing as a free lunch.,” but you’re still the one footing the bill and your money going in should produce a return. Even if it’s a bad product without promise, someone will sell the investment if someone is willing to pay for it

Be Aware of Bad Timing

For any investment, you want to know not only where it is in market timing, but also where it currently when you put your money in. In stock, short-selling has become popular for swing trading, where investors will buy in at a low and most will sell it off in mass when it hits a around a twenty percent growth, causing the stock to plunge. Everyone wants to buy low and sell high, but it can turn to the opposite and the investor will only experience loss.

The Die Hard Salesman

If a salesman is constantly trying to rope you with a never-say-die attitude and ridiculous enthusiasm that borders on unstable, the desperation should be a red flag for you. They will send invites to invest every week right up to when the business officially tanks, and a deal will be labelled as a can’t-miss opportunity to anyone from whom they hope to get money out of.

Other factors, like the ethics of the company and how well constructed a product is, are good indicators of whether to sign and check or keep walking. A decent marketing idea can still flunk out as concept for investment. What’s important to remember is that any of these factors can turn a good deal into a money pit.

Written by: Heidi Hanker likes lake Tahoe real estate because they have a wide selection of homes to buy. She also really likes to write articles because she knows how much it online content management.

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Category: Investing

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