• May 14, 2020

5 Ways to Spot an Investment Scam to Direct Your Funds Responsibly

For anyone who is getting into investing, it can be difficult to discern which potential ventures are legitimate, and which are only concerned with taking your money. These types of investment opportunities have the potential to derail and ruin your finances and could result in something far worse than merely missing out on your financial goals.

So how does one recognise these investment scams so you can avoid them? The naive first-time or DIY investor may not be aware of what to look out for, and this could prove catastrophic. Today, we will cover the signs of potential scams so you do not fall foul to bad actors looking to make a profit off you so you can direct your funds responsibly and ensure total protection.

Unsolicited Approaches

Typically, people looking to invest will carry out research and go to the source themselves. However, there are occasions where someone with an opportunity will approach you personally. For first-time investors, this can come as a surprise. It appears investments are more accessible than you think. But this is not the case.

Legitimate investment opportunities do not fall from the sky. Instead, they require a proper understanding, and that means research into what works best for you. As a DIY investor, scammers may see you as an easy target and want to take advantage. While it is possible the chance is legitimate, it is always best to err on the side of caution if you are unsure.

Pressured Into Decisions

Even if you have searched out and researched an investment opportunity that seems lucrative, it still does not mean it is wholly legitimate. If you feel like you’re being pressured into making a decision immediately through Impulse practices, such as the Fear of Missing Out or Keeping Up With the Joneses, then it is best to walk away.

Being forced to make a quick decision, often on the spot, is never a good sign. As these scammers are looking to make money quickly, they want an immediate answer. If you are not given time to think about it, then do not give it the time of day.

Lack of Online Information

When looking to invest money anywhere, you must do your research to find out the nature of the investment, plus any additional information regarding interest and similar options. If there is a lack of online information about a particular investment, it is usually the sign of it being a scam.

One of the best ways to avoid falling victim to a scam is to check out any online reviews. Whether it’s a Noble Bitcoin review or bond investments, the legitimate opportunities are there, filled with accurate information. Fake investment routes, on the other hand, will have little to zero online presence. If you have connections with experienced investors, you can ask them if they know anything about the offer, too.

Supposed Low Risk but High Return

The very nature of investing means accepting a slight risk that your venture may not pay off, but this is something that all professional and DIY investors understand. It is just part of the process. However, when you are offered something that seems too good to be true, usually with a low initial investment but with a high reward, you should exercise caution.

While some options like this are legitimate, they are few and far between, especially for first-time investors. The best way around it is to focus on low risk but also low reward investments at first, and build your portfolio from there.

No Contact

If a firm does not permit you to call them back for more information or clarity regarding the investment, then it is a scam. They usually prey on those willing to put their money upfront immediately only to abscond with the funds, never to be heard from again.

When working with potential investment opportunities, request the chance to talk over the phone or visit the office for further information. If they seem hesitant or do not allow this, then feel free to reject the opportunity.

Having Faith in Your Judgement

If you are someone who trusts their gut instinct, then you should be able to spot an investment scam from a long way off, but even your gut can make mistakes now and again. Such instincts are an excellent base to start from, but it’s always worth digging a little deeper. Aside from getting the feeling that something doesn’t seem right, you can also lookout for things that seem too good to be true. With faith in your abilities and the guidance that you seek every day, you can guarantee that you will avoid investment scams and see fruitful results from legitimate opportunities with every venture.

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