Disclaimer: This article provides knowledge to readers which does not provide any advices to readers. The writer and the company of this article take no legal responsibilities for any usage of these methods. The readers should consult their financial adviser first before implementing any financial decisions.
In the era of globalisation, we obtain almost every information from the Internet. It can be from making a decision of buying something to looking for a suitable asset. While we are normalising the usage of the Internet, threats are growing within the Internet, which ranges between obtaining personal information without consent to financial information.
Investing is a part for us to fight against inflation. Undeniably, the more return it is offered, the higher possibilities to attract investors. However, there is no free lunch in the world. Having a higher return usually accompanied by a higher risk on the investments. It is important to be able to secure our investment from the wrong hands as this is our hard-earned money.
1. "No loss will happen on investors," says agents
Under the Securities Commission of Malaysia (SC) guidelines on investments, there is no such investment which can "guarantee" not to lose. Logically, it means all investments are based on the market fluctuation instead.
Unless it is a bank product (which is observed by the Central Bank of Malaysia (BNM) under the purview of Perbadanan Insurans Deposit Malaysia (PIDM)) with their Product Disclosure Sheets available easily, there is no financial institution which can "guarantee" returns in their prospectus.
Mark it as the first red flag if people say the "investment never lose" and you should report it to SC if they could not produce the prospectus, which is a must-have for any investment products marketed in Malaysia.
2. It sounds "too good to be true"
An investment neither guarantee nor promise any returns, even if they have a good previous return record.
For example, when the agent says, "this investment is going to give you 20% in return regardless of market condition," beware of what they say. 20% per annum should accompany by 20% of the chance your investment will get into default (which is quite high compared to a usual investment with 5% to 6% default rate).
Always be skeptical even if an influencer or anyone popular asks you to invest! They might be an AI agent!
3. Chance only appears once
This may happen on a sale, but definitely not in an investment!
For an investment to be marketed, besides being a licensed company under SC, their investment products marketed requires proper approval from SC. At the same time, this is the modus operandi of the scammers to create unnecessary panic to encourage investments to ensure victims have no time to think at all.
Even if the investment is no longer accepting new investors (except private equity from a closed club), the investment prospectus should be always easily available from their website. If not, this is something fishy.
4. Earn a crazy amount of return
The investment return may not deviate much away from the average growth of the country. In Malaysia, the rate is about 3% to 5%. This means the return from an investment can go as high as 9% to 10% per annum.
Of course, people always look for higher returns. As mentioned that higher return implies higher risk, investment which can provide 50% of return is worth worrying. If someone approaches you with a 50% per annum of return and a specified amount as a minimum investment, run as far as you can.
Do not get trapped easily as threats are everywhere.
5. Put all money into a sole investment
You expect a good return from an investment. You invest solely into it but the investment is dull within the same year. The investment return might be just negative. This means you lose out.
If you are investing in other types of investments, you may earn within the same period. We know that we have limited amount of money to invest.
So how? Make a portion of investments into different investment schemes. Besides checking the legitimacy of the investments, making the most out of our money can sometimes be costly. Therefore, split your money among different types of investment schemes. When needed, consult your investment advisor to get the best risk appetite of your investment.
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