Shady operator - Caveat emptor

in #investment5 years ago

Most people who make the effort to invest for the future understand the potential benefits of doing so. They look at the benefits, rates of return, residual benefits like company discounts for holding shares, weigh up potential gains in one area over another and generally research thoroughly. Most investors have other things to do with their money so if it's getting locked away into an investment it has to show a good return and be, if not risk-free, then as risk-mitigated as possible. Why then do many people lose their money through bad investment?

That's a big question of course and there's many, many answers to it however a lot of the time loss occurs when people go into something with eyes wide shut!

It's always easy to focus on the potential benefits of an investment and forget that bad things happen and some investments simply don't work out. Bad people also happen and that can bring just as much heartache, pain and loss as a natural disaster can when it comes to investment. Imaging investing in a company that grows tomato's only to find out that that years' crop is destroyed in a flood! Doesn't happen? Oh yes it does.

A little while ago in Australia a disgruntled worker at a strawberry farm decided it would be funny to insert needles into strawberries before they were packed. Obviously they made it to the market and were found by consumers whilst biting into them. The government shut the industry down and millions of dollars of stock was destroyed. It crippled the industry and many farms closed down. Imagine investing right before that!

As investors we can only research so much and eventually must make a decision to proceed or look elsewhere. We could never determine every possible risk or threat prior to investing however research is certainly better than no research.

No investment is ever a sure thing I think. If you know of one please let me know...But I'd still research it regardless. There's many shady operators out there who prey on those who fail to research, are naive or are simply stupid. Scam investments are everywhere and even the investments that are legitimate, superannuation funds and the like, can have a shady character involved who runs off with investors money. That's happened here too!

The term caveat emptor certainly applies to investments however a "let the buyer beware" ethos doesn't always mean a secure and safe investment. I am always amazed at how easily some people are duped into shady investments however consumers are also partly to blame for lack of research and caution. I often find if something looks too good to be tru, it often is. Not always, but mostly.

Caveat emptor.

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