There are many different types of investments out there, but not all of them are created equal explains Brian Colombana. Just because something is considered an “investment” doesn’t mean that it’s a smart move for you.
In this article, we’ll discuss 13 types of investments you should avoid.
1. Penny stocks:
Penny stocks are stocks that trade for less than $5 per share. They’re often very risky and not worth your time or money.
2. Investment schemes:
Investment schemes are anything but a sure thing. These “opportunities” usually turn out to be scams, so stay away!
3. Too much debt:
Taking on too much debt can be a very risky move, especially in today’s economy. If you’re unable to repay your debts, you could lose everything you’ve worked for.
4. High-fee mutual funds:
Many mutual funds charge high fees, which can eat away at your returns. Avoid these funds and opt for low-fee alternatives instead.
5. Precious metals:
Precious metals such as gold and silver can be volatile investments. In other words, their prices can go up and down a lot, so they may not be the best choice for you.
6. Futures contracts:
Futures contracts are agreements to buy or sell a certain asset at a specific price in the future. They’re often used by traders, but may not be appropriate for casual investors says Brian Colombana.
7. Options:
Options are contracts that give you the right, but not the obligation, to buy or sell an asset at a certain price. They can be very risky, so only invest in them if you understand the risks involved.
8. Illiquid investments:
Illiquid investments are those that can’t be sold quickly or easily. This can make them difficult to sell in a hurry, which can lead to losses.
9. High-yield bonds:
High-yield bonds are bonds that offer a higher yield than other bonds. However, they’re also more risky, so you should only invest in them if you’re comfortable with the risk.
10. Junk bonds:
Junk bonds are high-risk, high-yield bonds. They’re issued by companies that are considered to be high risk, so they may not be appropriate for all investors.
11. Emerging market stocks:
Emerging market stocks are stocks from countries that are still developing. They can be very risky, so you should only invest in them if you’re comfortable with the risk.
12. Cryptocurrencies:
Cryptocurrencies are digital currencies that aren’t backed by any government or central bank. They’re extremely volatile and may not be a wise investment for you explains Brian Colombana.
13. Gambling:
Gambling is never a wise investment strategy. If you gamble your money away, you’ll lose everything you’ve worked for.
Avoid these 13 types of investments if you want to protect your hard-earned money. There are many smart investment options out there, so find one that’s right for you and stick with it.
FAQs:
Q: What is a penny stock?
A: Penny stocks are stocks that trade for less than $5 per share. They’re often very risky and not worth your time or money.
Q: What is an investment scheme?
A: An investment scheme is anything but a sure thing. These “opportunities” usually turn out to be scams, so stay away!
Q: What is too much debt?
A: Taking on too much debt can be a very risky move, especially in today’s economy. If you’re unable to repay your debts, you could lose everything you’ve worked for.
Q: What are high-fee mutual funds?
A: Many mutual funds charge high fees, which can eat away at your returns. Avoid these funds and opt for low-fee alternatives instead.
Q: What are precious metals?
A: Precious metals such as gold and silver can be volatile investments. In other words, their prices can go up and down a lot, so they may not be the best choice for you.
Q: What is a futures contract?
A: Futures contracts are agreements to buy or sell a certain asset at a specific price in the future. They’re often used by traders, but may not be appropriate for casual investors.
Conclusion:
These are 13 types of investments you should avoid if you want to protect your money says Brian Colombana. There are many smart investment options out there, so find one that’s right for you and stick with it.
