We’ve all heard about really bad investments. You’ve told yourself that you would never get into one of those crazy schemes. However, do you know exactly what some of the really bad investment moves people tend to make are?
Don’t Spend Time or Money on Timeshares
If you want to get into an investment that you will never be able to dig your way out of, go ahead and buy into a timeshare. However, if you want to avoid the pitfalls of investing, you will stay as far away from timeshares as humanely possible. If you buy into a timeshare, you will put more money into the property than it is possibly worth. On top of that, when you decide you are done with it, you won’t be able to find someone as gullible as you to sell it to.
Surrender Charges Keep You Hostage
When you make an investment, be careful about the fees and charges. Life happens, and if your investment has surrender charges, it is going to limit you severely. If you aren’t able to pull out of the investment without a surrender charge, it can cost you a significant amount of money. Think about it – there are a lot of reasons you may need to pull out of the investment; bad health, divorce, death in the family, and moving are all legitimate reasons you may need to pull the investment.
Penny Stocks are Called That for a Reason
There are a variety of stocks out there that are sold for under $1. However, there is generally a reason for this. Though it’s not a bad idea to buy some of these, don’t get caught up in only buying penny stocks, thinking that you will get rich on them. It’s kind of like the lottery; sure, one of these penny stocks could make it big someday, but putting all your money into that possibility probably isn’t the smartest idea. The people promoting the penny stocks are the ones that are making all the money. For the best information on the stocks, check out Fisher Investments MarketMinder.
Putting all Your Money in One Investment Type is Not Smart
Make sure you have at least a little diversity in your investment portfolio. It’s really not smart to have all of your money in one type of investment. Anyone who tells you to put all of your money in one specific investment or one specific company is leading you astray. The more diversified your portfolio, the more likely you are to come back with a good return on investment. Putting all of your investment with one investment company or financial advisor is generally ok, but make sure that they are divvying up the funds to different investments for you.
There are a lot of ways you can get in trouble with investing. However, when you work with a good financial advisor, you are less likely to lose a large sum of money. Stay away from the biggest pitfalls of investing, and investing becomes a much safer place.