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Investments to Steer Clear Of

by Thomas

Although stock-picking like earning returns is important, not every creation has the same investment value. Here are some investments to avoid due to their high risk or dubious nature:Here are some investments to avoid due to their high risk or dubious nature:

  1. Cryptocurrency Scams: One should not forget the risks involved in the cryptocurrency market, though it has cryptocurrencies like Bitcoin and Ethereum that have become popular. At the same time, there are also scams and frauds in the market which promise unrealistic returns. Note that bogus deals may come in the limelight and may have a catch. Therefore, always make sure you do your research on whichever cryptocurrency you want to invest in.
  2. Penny Stocks: Penny stocks are in fact low valued, and are rated as speculative stocks which trade rather over-the-counter (OTC) or on smaller stock exchanges. Their lack of liquidity and susceptibility to manipulation oftentimes make them unreliable and highly volatile instruments which ones can be used in hedging and general portfolio diversification. Making the trades of penny stocks is the newbie investor’s grater attention and care ought to be.
  3. Pyramid Schemes: Schemes like pyramids leave no doubt that they guarantee great income for a simple work and by only bringing new elements there in the scheme. However, these schemes are just a unhealthy ruse for recruiting new members to pay out to the old ones. The pyramid schemes are declared a criminal offense in many countries and it should not be considered a subject of choice.
  4. High-Yield Investment Programs (HYIPs): HYIPS offer impossibly large spendings with their so-called sophisticated trading methods or even tricks. In a nutshell, most HYIPs are Ponzi schemes that reuse the capital of newcomers to compensate earlier participants. Investment into the HYIPs needs to be done with caution and real credibility and attempts to make it transparent should be created.
  5. Binary Options Trading: A binary option is a form of a trade in which traders bet on the direction of the price of the assets within a predefined and short time. Such investment is highly speculative and akin to a gambling, usually. The unclear features of binary options and its impose the favor of loss for the newer traders what makes it a place of risk to invest in.

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