10 Things Where You Should Not Invest
If you are a beginner or a newbie investor then you would surely want to invest in the things which give you a guaranteed return. There are many types of investments that exist out there that can easily dupe you out of your money. Starting from fraudulent scams to risky investment options, you must be able to steer clear of them all. In this article, we are going to discuss 10 things where you should not invest. Let’s get started.
This particular form of investment is very risky and therefore you must try to avoid it at all costs if you are a newbie investor. Options happen to place time requirements on the purchase or sale of securities which makes it very volatile. Even professional investors often tend to discourage the practice of timing the market.
IPOs or Initial Public Offerings
You have surely heard how some people, by investing early into the IPOs of Facebook, Apple, and other popular companies, have ended up making millions. The flip side of the story however is not so bright. IPOs happen to be extremely risky because there always remains a high degree of uncertainty when it comes to a company’s ability to move forward steadily and grow sustainably over time.
Venture Capital investors always need to do a lot of additional research to securely assess the viability of a completely new company. If they fail to do so, then the money doesn’t recover at all. Therefore, as an investor, if you are considering putting your money into a venture capital fund or investment then do so knowing that you might never be able to make a single penny out of it if things go haywire with the new companies.
Foreign Emerging Markets
This is again a very risky investment type for beginners or newbies. When it comes to emerging markets the biggest risk is the fact that the period of extreme growth may happen to last for a shorter period than what was expected by investors. This ends up leading to very discouraging performance. Thus, you are better off investing your hard-earned money into other safer options.
Real Estate Investment Trusts
REITs or Real Estate Investment Trusts are very prone to swings based on the health of the overall economy, interest rate levels, and much more. These moving factors can always flourish or experience a lot of depression at any given time. Thus, because of this highly fluctuating nature, REITs are very risky investments.
High Yield Bonds
New investors should always be aware of the fact that a high yield bond that offers 15 to 20% may be junk. Also, the potential for a total loss of investment dollars is huge when compared against the benefits of investing in this. That is why you must try to look towards investment opportunities that can give you a modest or standard return on your principal amount, unlike high yield bonds.
Currency trading is something that is always best left to the professionals as it is not at all simple to understand. It comprises many quick-paced changes in exchange rates, which tends to offer a high-risk environment to all sentimental traders and investors. Therefore, this is something you should consider skipping out on if you are just getting started.
Cryptocurrencies tend to be very volatile and fluctuating. Also, investing in them doesn’t come cheap. Therefore, this is something better left untouched as cryptocurrencies are a long way from evolving into a stable investment opportunity for all.
Get Rich Quick and Other Fraudulent Schemes
There are many get-rich-quick and fraudulent schemes out there that are not at all legit in any way. Thus you need to be wary of these things by keeping yourself constantly updated so that you don’t get tempted when these offers pop up in front of you.
Anything that is Beyond Your Comprehension
If you follow Warren Buffet who is nothing short of being the godfather of how to do investments correctly, then you are aware of this rule. He always keeps reiterating that he doesn’t invest in anything that he doesn’t understand. Simply put, never put your money into something that you don’t know will be able to give you any returns. Many newbie investors act blindfolded on the advice of others who supposedly have more experience. Doing this will ensure that you lose your money in the quickest way possible. So beware.
This brings us to the end of our discussion on 10 things where one shouldn’t invest. Now, do let us know some of your thoughts on the same.