While most of us have seen or felt the effects of Alberta’s weak economy in one way or another, thousands of Albertans have been financially impacted through job losses and cutbacks.
During tough economic times, scam artists will use their skills to tempt those who are unemployed or have experienced a loss in income with investment opportunities that will help them “get rich quick” or make lost income back.
Before you hand over your savings, be aware of some common investing mistakes, some of which even experienced investors can make if facing financial pressures.
Following “hot” stock tips: Building wealth takes time, patience, and discipline. “Hot” tips are often from uninformed sources and could be based on rumors or misinformation. By the time you get a tip, it’s often too late and the opportunity has passed. NEVER buy a stock based solely on a tip.
Focusing on short-term success: Investing is a long-term process and you can’t expect instant results (or returns) from an investment. Getting frustrated and selling an investment too quickly could end up costing you a lot of money. Long-term strategies may not make you a millionaire overnight, but they won’t bankrupt you either.
Buy first, learn later:Investing first, then learning about your investment is putting the cart before the horse. It’s important to protect your money by making informed investing decisions. Check First - there are many sources of information to help you learn about the investing process and specific investment vehicles.
There’s nothing to it!: If it were possible to consistently beat the market, analysts and brokers would all be millionaires (they aren’t). Don’t overestimate your abilities or those of your adviser. And, if an opportunity sounds too good to be true, it probably is.
Too much or too little of everything: Trying to eliminate risk by choosing too many investments can eliminate opportunities for good returns. Conversely, having too few investments or focusing on one industry sector can increase your risk, especially during economic downturns.
Before considering any investment opportunity, always take the time to do your own research to you understand what you are getting into and if the investment is legitimate and suitable for you.
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