How Not To Invest

Posted on 15/02/2011

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Because it can be quite a complex process to determine an investment strategy, the suitable asset allocation and to select individual investments, it is often therefore very challenging for a writer such as myself to make recommendations without properly understanding the personal circumstances and risk/return appetite of specific readers.  However, it is much easier to give advice on how not to invest.  I include some examples below:
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Isn’t it much better to Trade Carbon Credits for 300%+ Returns?
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Expert Solar Advice & Installation, Earn Upto £2000 Yearly – Contact Us
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20%+ ROI & 100% capital protection. Max 3yr term. UK projects. Proven.
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High Potential Investing In Mining. $10k Min. Invest. Coal & Minerals.
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Trade Binary Options and Turn Your £1K into £1750 in 1hr! Open Account

These are all taken from Google AdSense advertisements that show-up beside my Gmail inbox, so are being marketed to the general public.  While I have not performed detailed due diligence on any of these investments (I do place a certain value on my time), I would recommend that investors be very sceptical of any investment opportunities that appear to promise specific returns (especially if they are high) and/or any form of capital protection.  I would add that these pieces of advice still apply even when the firm making the promotion appears reputable.  Investors with blue-blood private bank Coutts & Co suffered major losses when their funds were invested in a low-risk product backed by AIG, while many of those purchasing guaranteed annuities from Equitable Life lost a large portion of their savings when the company closed to new business and after failing in a legal action to renege on guarantees to policyholders.

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Posted in: My Thoughts