Imagine if someone comes up to you and proposes an investment plan that is 100%-guaranteed return, with no risk. What would your response be?
Some others are masked as low-risk, high returns investments, offering weekly returns on very little or even no effort. There are many such investments in the past , just type the buzzword "Ponzi Scheme" on your favourite search engine and a whole list of investments, in the history and in the recent days would emerge. On the global front, we could not forget the face of Bernard Madoff and his biggest Ponzi scheme. Read more here.
In Malaysia, we have the Genneva Gold Scheme with similar outcomes; fraud victims lost their hard earned savings while the frauders ended up in the jail. But this is probably just cases which are at the tip of the ice-berg. Investigations into such scams take a very long time, in Genneva's case it took 3 years for investigators to finally raid the perpetrators. At that point, too many victims have fallen into the trap and it was only the early "investors" who were probably luckier because they have received at least some returns on their initial "investment" at the expense of those who joined the bandwagon late.
Often times, the intelligent investor thinks about the risks when she balances her investment with the returns that may come with it. What's your risk profile like?
No comments:
Post a Comment