We recently wrote an article that’ll teach you 17 Ways to Invest with $100 or less, so it’s only right to inform you of 6 bad investments that you should totally avoid. As always, you should do a lot of research before putting your money in someone else’s pocket, especially if it seems like a sneaky or dangerous scheme. The following 6 investments have a high probability of losing all your hard-earned money or yielding very little in return.
1. Penny Stocks
Penny stocks or over-the-counter stocks might seem cheap and less risky. But, that’s not actually true, in fact, they are pretty dangerous. The biggest problem with Penny stocks is that, for example, if you decide to buy them when they are priced at $0.80 each, the price can hike before your order is placed and you won’t know about it until it’s too late.
If it sounds too good to be true, it probably is. Be wary of anyone who tells you that there is a “secret” way to get rich. Be careful around salesmen who preach ridiculously high returns. Generally, it comes down to research, and these days a Google search is enough to know if something is legitimate or not.
3. Anything from a Late-Night Infomercial
Infomercials are ridiculously long commercials that will convince you to buy something that you 100% don’t need. And sometimes, they include investments. These people are trained to sell and are very effective at pulling you in. But don’t be fooled, it’s the power of advertising that’s got your attention, not the product.
A one-time trip to Vegas is great fun. But, you should never use your savings for betting. If you like the risk factor, get your financial advisor to recommend some riskier stocks rather than losing it all at the table.
5. Investment You Don’t Understand
Don’t throw your money at something you don’t understand. If you don’t properly understand the investment you are making it might not align with your beliefs, or worse, there might be some dodgy fine print that you didn’t read. Chances are, you’ve not done enough research.
6. Keepsake “Investments”
We’re talking Baseball cards and Beanie Babies. There is absolutely zero guarantees that these kinds of collections are going to be worth a fortune in the future. Yes, the most expensive Barbie is worth $302,500 – but, frankly, you’ve got more chance of winning the lottery.