- October 16, 2019
- Bob Quinn
In the past I’ve written about expensive investment propositions (those with high fees and charges) and about propositions which appear to have no fees.
To make it easy, I’ve drawn up a handy checklist: 7 reasons to walk away from an investment opportunity.
- If the risks in an investment are not clear to you, don’t sign up.
- Investments with a requirement of currency conversion should be hedged back to your base currency.
- If the fees and charges are not clear, don’t sign on the dotted line.
- If the investment purports to be at ‘no cost to you’, don’t be fooled. You are paying for it somehow, how else do you think it works?
- If you are tied into an investment for a specific term, be careful. When are you likely to need to turn your assets into cash? There can be stringent penalties for early encashment.
- If the proposition seems complex, be careful. Extra complexity is likely to add extra cost and/or extra risk.
- If the seller is earning a commission from this investment, be sure to get an objective second opinion.
On this last point, it’s a good idea to ask the seller/proposer to tell you how much he or she is making from the investment – initially and on an ongoing basis. That way you’ll know the extent of the seller’s vested interest.
This checklist should give you the confidence to be able to assess investment opportunities that may be put in front of you. Believe me, there are ways to invest which will pass the seven tests above. Look for low-fee, globally diversified investments.