Investors make investments with the anticipation that it will be profitable either in the short run or in the long-term. However, in many cases, investors lose money from the investments, especially during their first attempts.
Investment in Programs With High Financial Returns
The main reason why investors lose money is making investments in programs with high financial returns whose returns are realized in a short term. Such investment programs with high returns are always at a risk of shutting down quickly. These programs include High-Yield Investment Programs (HYIPs), Ponzi schemes, and well-masked pyramid schemes. They purport to offer very high profits ranging from 5% to 250% monthly on investments.
HYIPs have monitors that work globally to accept different investment types. The most basic feature of these monitors is that interest is paid daily, weekly, or even monthly with interest rates of 0.5% to 3% per day. The minimum deposit of the monitors ranges from $10 to $50. After the monitors have accumulated the capital of common investors via the internet, the investors are paid interest according to their total deposits and their chosen investment plans.
Fraudulent HYIP monitors operate like Ponzi schemes. Ponzi schemes are investment programs with very high-interest returns ranging from 3% to 10% daily. The returns are not paid from the business’ income but from the money invested by new investors. This enables the fraudsters to continue defrauding investors who are not aware of their tricks.
Scam Investment Programs
Currently, 89% of the total monitors available are based on financial pyramids and are very difficult to differentiate from genuine HYIP monitors as the pyramids continue to pay its investors as long as there deposits as being made. Depending on how well thought the investment program is and its advertisement campaigns, some HYIPs will work for one year to five years before they actually become a scam. Other fraudulent programs work for as little as one week to several months. Regardless of the period of existence, unsuspecting investors are likely to lose money in such programs.
The risk of losing money is relatively equal between the HYIP pyramid and the real HYIP monitor. The success of HYIP pyramids depends on how popular the project is the number of deposits being made while that of genuine HYIP monitor depends on the how successful the company is in trading. Despite all the risk involved in the HYIP industry, it is growing and becoming more popular each year. However, these high return investments can be very profitable to risk-taking investors due to high amount of money they may generate to the investors.
How to Avoid Making Investment Loses
Attending safe investment seminars
By attending safe investment seminars, aspiring investors can be able to know how to choose a reliable investment fund, how to increase their assets, and ways in which they could invest in stocks or real estate. They will also be able to learn to how to safely participate in cryptocurrency trade.
Reliable companies offer investment seminars or webinars and investors can register for it on the relevant websites to book participation. Such seminars or webinars provide potential investors with information such as how they can choose safe investment foundations, how to distinguish investment opportunities, how to invest in stock and terminated fund. Besides, they provide information on financial services and brokerage. The programs also touch on the subject of why investors may lose money on their first investments. In the end, the knowledge acquired from the programs could help individual investors and traders choose investment projects that will provide them with a stable income.
Investing Through a Reliable Third Party
Apart from the seminars, reliable companies also offer investment opportunities for individuals who would like to invest. Some organizations have their operations limited by lack of funds, they don’t have enough confidence in themselves, or even that they simply prefer to entrust professionals with their capital or money and many other reasons.
They offer investment products that ensure a stable income for investors. Some of the products offered include trading in foreign exchange markets, transactions with the commercial real estate, and investments in promoting environmental and renewable energy. Reliable companies also manage funds like the Global Fund, shares, bonds and many other profitable funds. The investment offers are for a range of different investors who have different knowledge and funds level.
Testing the waters of investment could be tricky, especially for first-time investors. It is advisable to involve a financial expert to hold your hand through expert guidance. The tips outlined in this piece could also serve as a steppingstone.
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Tony is a writer for the crypto space. He presents cryptocurrency and blockchain topics to the public in a way that he only can. While carefully researched, this article should not be taken as an express investment guide. Do your own research and consult a financial advisor before you invest in cryptocurrency.