In season 4 of Brothers and Sisters, fictional character Holly Harper, who was a shrewd businesswoman, fell for a Ponzi scheme and lost her entire investment. Ponzi Scheme is named for Charles Ponzi a real life person, who in the 1920’s promised investors huge investment returns. He took money from one investor to pay huge returns to an earlier investor. Many investors lost enormous amounts of money. Eventually he was caught.
When I teach Investment classes I talk about Diversification. Many people advise diversification among types of investments. Example – Susie Sincerety invested $25,000 to buy shares of Apple 2 years ago. Her investment doubled and then she sold her shares. 3 months later she invested $50,000 into Apple again not thinking that in a month she needed the money to give her daughter for a deposit on the home she purchased. The home purchase date approached, Apple went down and Susie sold at a loss.*
Diversification – even investments that have once done very well, extremely well can go down when you need the money. Invest in different companies or in different mutual funds. You might have some investments in
Advertising
Food and Beverage
Construction
Consumer Products.
Financial Companies
Pharmaceuticals
Precious Metals
Shipping
Technology
There are MANY other investing categories.
Not everything goes up or down at the same time.
In addition to investing in different types of industries I recommend people divide up the money have invest through different advisors. It takes some time to do this. The first time you invest you will invest through one advisor. Make some money and then invest some of the gains with a different investment company. I talk about diversification and how to choose a financial advisor in much more detail in my upcoming book.
*Please note since 2004 Apple has been one of the most successful stocks in history.
When I teach Investment classes I talk about Diversification. Many people advise diversification among types of investments. Example – Susie Sincerety invested $25,000 to buy shares of Apple 2 years ago. Her investment doubled and then she sold her shares. 3 months later she invested $50,000 into Apple again not thinking that in a month she needed the money to give her daughter for a deposit on the home she purchased. The home purchase date approached, Apple went down and Susie sold at a loss.*
Diversification – even investments that have once done very well, extremely well can go down when you need the money. Invest in different companies or in different mutual funds. You might have some investments in
Advertising
Food and Beverage
Construction
Consumer Products.
Financial Companies
Pharmaceuticals
Precious Metals
Shipping
Technology
There are MANY other investing categories.
Not everything goes up or down at the same time.
In addition to investing in different types of industries I recommend people divide up the money have invest through different advisors. It takes some time to do this. The first time you invest you will invest through one advisor. Make some money and then invest some of the gains with a different investment company. I talk about diversification and how to choose a financial advisor in much more detail in my upcoming book.
*Please note since 2004 Apple has been one of the most successful stocks in history.
No comments:
Post a Comment